Filed Pursuant to Rule 424(b)(5)
Registration No. 333-265526
PROSPECTUS SUPPLEMENT
(To Prospectus dated July 15, 2022)
1,666,667 Shares of Common Stock
We are offering 1,666,667 shares of our common stock, par value
$0.001 per share (“Common Stock”).Each share of Common Stock
will be sold at a negotiated price of $3.00 and will be issued
pursuant to this prospectus supplement, the accompanying prospectus
and a securities purchase agreement.
In a concurrent private placement, we are also selling to the
purchaser of the shares of Common Stock, warrants to purchase up to
1,666,667 shares of our common stock (the “warrants”) at an
exercise price of $4.64 per share (and the shares of our Common
Stock issuable upon the exercise of the purchase warrants (the
“warrant shares”)). The warrants will be initially exercisable six
months following the issue date and will expire five and one-half
years from the issue date. The warrants and the warrant shares are
not being registered under the Securities Act of 1933, as amended
(the “Securities Act”), pursuant to the registration statement of
which this prospectus supplement and the accompanying base
prospectus form a part and are not being offered pursuant to this
prospectus supplement and the accompanying base prospectus. The
warrants and the warrant shares are being offered pursuant to an
exemption from the registration requirements of the Securities Act
provided in Section 4(a)(2) of the Securities Act and/or Rule
506(b) of Regulation D promulgated thereunder.
Our Common Stock is listed on the Nasdaq Capital Market
(“Nasdaq”) under the symbol “APCX”. On January 27, 2023, the
closing sale price of our Common Stock was $4.90 per share.
Investing in any of our securities involves a high degree of
risk. See the “Risk Factors” section beginning on page S-4 of
this prospectus supplement and page 5 of the accompanying
prospectus, as well as our other filings that are incorporated by
reference into this prospectus supplement and the accompanying
prospectus.
Neither the Securities and Exchange Commission (the
“SEC”) nor any state securities commission has approved or
disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus supplement or the accompanying
prospectus. Any representation to the contrary is a criminal
offense.
We have engaged EF Hutton, division of Benchmark Investments, LLC
to act as our exclusive placement agent (“EF Hutton” or the
“Placement Agent”) in connection with the securities offered
by this prospectus supplement. The Placement Agent has no
obligation to buy any of the securities from us or to arrange for
the purchase or sale of any specific number or dollar amount of
securities but has agreed to use its best efforts to sell the
securities offered by this prospectus supplement. We have agreed to
pay the Placement Agent a fee based on the aggregate proceeds
raised in this offering as set forth in the table below:
| |
|
Per Share |
|
Total |
| Offering
price |
|
$ |
3.00 |
|
|
$ |
5,000,001 |
|
|
Placement
Agent fees(1) |
|
$ |
0.24 |
|
|
$ |
400,000.08 |
|
|
Proceeds, before expenses, to us |
|
$ |
2.76 |
|
|
$ |
4,600,000.92 |
|
|
(1) |
We
have agreed to pay the Placement Agent a cash placement commission
equal to 8.0% of the aggregate proceeds from the sale of the shares
of Common Stock sold in this offering. We have also agreed to
reimburse the Placement Agent for certain expenses incurred in
connection with this offering. See “Plan of Distribution”
beginning on page S-11 for additional information regarding the
compensation to be paid to the Placement Agent. |
Delivery of the securities being offered pursuant to this
prospectus supplement and the accompanying prospectus is expected
to be made on or about February 2, 2023, subject to the
satisfaction of certain closing conditions.
Sole Placement Agent
EF Hutton,
division of Benchmark Investments, LLC
This prospectus supplement is dated January 30, 2023
TABLE OF CONTENTS
ABOUT THIS
PROSPECTUS SUPPLEMENT
This prospectus supplement and the accompanying prospectus are part
of a “shelf” registration statement on Form S-3 that we filed with
the Securities and Exchange Commission (the “SEC”) using a
“shelf” registration process.
This document contains two parts. The first part consists of this
prospectus supplement, which provides you with specific information
about this offering. The second part, the accompanying prospectus,
provides more general information, some of which may not apply to
this offering. Generally, when we refer only to the “prospectus,”
we are referring to both parts, combined. This prospectus
supplement may add, update or change information contained in the
accompanying prospectus. To the extent that any statement we make
in this prospectus supplement is inconsistent with statements made
in the accompanying prospectus or any documents incorporated by
reference herein or therein that we filed with the SEC before the
date of this prospectus supplement, the statements made in this
prospectus supplement will be deemed to modify or supersede those
made in the accompanying prospectus and such documents incorporated
by reference herein and therein. You should read this prospectus
supplement and the accompanying prospectus, including the
information incorporated by reference herein and therein.
You should rely only on the information that we have included or
incorporated by reference in this prospectus supplement, the
accompanying prospectus and in any free writing prospectus we may
authorize to be delivered or made available to you. We have not,
and the Placement Agent has not, authorized anyone to give any
information or to make any representation other than those
contained or incorporated by reference in this prospectus
supplement, the accompanying prospectus or any free writing
prospectus we may authorize to be delivered or made available to
you. You must not rely upon any information or representation not
contained or incorporated by reference in this prospectus
supplement or the accompanying prospectus. This prospectus
supplement and the accompanying prospectus do not constitute an
offer to sell or the solicitation of an offer to buy any securities
other than the registered securities to which they relate, nor does
this prospectus supplement or the accompanying prospectus
constitute an offer to sell or the solicitation of an offer to buy
securities in any jurisdiction to any person to whom it is unlawful
to make such offer or solicitation in such jurisdiction.
You should not assume that the information contained in this
prospectus supplement or the accompanying prospectus is accurate on
any date subsequent to the date set forth on the front of the
document or that any information we have incorporated by reference
herein or therein is correct on any date subsequent to the date of
the document incorporated by reference, even though this prospectus
supplement or accompanying prospectus is delivered, or securities
are sold, on a later date.
This prospectus supplement contains or incorporates by reference
summaries of certain provisions contained in some of the documents
described herein, but reference is made to the actual documents for
complete information. All of the summaries are qualified in their
entirety by the actual documents. Copies of some of the documents
referred to herein have been or will be filed or have been or will
be incorporated by reference as exhibits to the registration
statement of which this prospectus supplement forms apart, and you
may obtain copies of those documents as described in this
prospectus supplement under the heading “Where You Can Find More
Information.”
We further note that the representations, warranties and covenants
made by us in any agreement that is filed as an exhibit to any
document that is incorporated by reference into this prospectus
supplement or the accompanying prospectus were made solely for the
benefit of the parties to such agreement, including, in some cases,
for the purpose of allocating risk among the parties to such
agreements, and should not be deemed to be a representation,
warranty or covenant to you. Moreover, such representations,
warranties or covenants were accurate only as of the date when
made. Accordingly, such representations, warranties and covenants
should not be relied on as accurately representing the current
state of our affairs.
Unless otherwise stated in this prospectus, or the context
otherwise requires, references to the “Company,”
“we,” “us,” “our” or “AppTech” refer
specifically to AppTech Payments Corp. and its consolidated
subsidiaries. When we refer to “you,” we mean the potential
holders of our securities. Capitalized terms used, but not defined,
in this prospectus supplement are defined in the accompanying
prospectus.
PROSPECTUS
SUPPLEMENT SUMMARY
This summary highlights information contained in other parts of
this prospectus supplement. Because it is only a summary, it does
not contain all of the information that you should consider before
investing in shares of our Common Stock, and it is qualified in its
entirety by, and should be read in conjunction with, the more
detailed information appearing elsewhere in this prospectus
supplement, the accompanying prospectus, and the documents
incorporated by reference in this prospectus supplement and the
accompanying prospectus. You should read all such documents
carefully, and you should pay special attention to the information
contained under the caption entitled “Risk Factors” in this
prospectus supplement, the accompanying prospectus, in our most
recent Annual Report on Form 10-K, in any subsequent Quarterly
Reports on Form 10-Q and in our other reports filed from time to
time with the SEC, which are incorporated by reference into this
prospectus supplement and the accompanying prospectus, before
deciding to buy our securities.
Overview
Through our scalable cloud-based platform architecture and
infrastructure coupled with our commerce experiences development
and delivery model, we intend to simplify and streamline digital
financial services for corporations, small and midsized enterprises
(“SMEs”) and consumers. We will accomplish this through innovative
omnichannel payment and digital banking technologies that
complement our core merchant services capabilities. We believe
there is opportunity to generate significant revenue for the
Company the near future by providing innovative commerce solutions
and experiences that resonate with clients, their customers, and
the market as a whole. Further, our soon to be launched modular
platform will equip forward-thinking financial institutions,
technology companies, and SMEs with operational efficiencies, such
as automated financial controls and reconciliation in addition to
manual administration.
Today, our Company’s merchant services solutions provide financial
processing for businesses to accept cashless and/or contactless
payments, such as credit cards, ACH, wireless payments, and more.
Our patented, exclusively licensed, and proprietary merchant
services software will offer, new integrated solutions for
frictionless digital and mobile payment acceptance including
acceptance of alternative payment methods (“APMs”). We are
extending and enhancing these capabilities with software that
solves for multi-use case, multi-channel, API-driven, account-based
issuer processing for card, digital tokens, and payment transfer
transactions. Our scalable business model allows for expansive
white-labeling, SaaS, and embedded solutions that will drive the
digital transformation of financial services and generate diverse
revenue streams for our Company.
The financial services industry is going through a period of
intensive change driven by the advancement of technology, the
adaptation to societal changes resulting from COVID-19, and the
rapid rise of contactless transactions. End-users expect ease of
use and an enhanced user experience in all their daily financial
interactions. In this rapidly evolving digital marketplace, our
prospective clients, such as merchants and independent software
vendors (“ISVs”), have broad and frequently changing requirements
to meet consumer expectations and operational efficiencies to
maintain their competitive edge.
Providing basic payment acceptance and “lowest price” models is no
longer the winning formula to support the market. These entities
recognize that staying competitive in the digital age requires a
partner with a platform and services capable of delivering
flexibility and growth while streamlining operations to continually
deliver increased revenue and profitability opportunities. Our
pricing is extremely competitive, but we believe the value we
create for financial institutions, technology companies, and SMEs
through our technology, deployment model, services and consultative
approach will create true differentiation from our competitors.
Our global financial services platform architecture and
infrastructure is designed to be flexible and configurable to meet
current and future market needs. This will empower our clients to
take advantage of future platform development and new innovative
digital financial solutions by leveraging off-the-shelf experiences
and consuming our APIs. Additionally, by taking a holistic view of
all aspects of our clients’ business, including risk, volume, user
experience, integration capabilities and technical needs, we will
create optimal and extensible financial technology solutions at a
rapid pace.
Through exclusive licensing and partnership agreements to
complement our patented technology capabilities, we believe we will
become leaders in the embedded payment and digital banking sectors
by supporting digital, tokenized, multi-channel, embedded
API-driven transactions. We intend to accelerate this position
through the integration of our merchant services and a secure text
payment solution with extensive digital account-based and
multi-channel issuer payment processing capabilities. We believe
that this will enable us to provide our clients an end-to-end
payment acceptance and digital banking solution powering
straight-through processing and embedded payment opportunities in
the B2B space. We expect to support clients through the development
of custom and off-the-shelf experiences by delivering these
solutions through public APIs and Webhooks.
A key to the Company’s success and market penetration is the
continued development of enterprise-grade, patent protected
software for SMS text payments via a mobile device. Our patented
technology manages text messaging for processing payments,
notification, response, authentication, marketing, advertising,
information queries and reports. Once an account is established
through a multi-currency digital wallet, neither internet
connectivity nor a specific application is required to process
payments between merchants and end-users. These features will be
particularly beneficial for unbanked and under banked individuals
in developing or emerging markets where access to the internet on a
mobile device and modern banking institutions may not be readily
available. In addition, our software platform will extend
merchants’ marketplace capabilities by creating new avenues and
channels to request and receive frictionless, digital payments and
engaging end-users by utilizing a familiar, convenient, and widely
adopted technology.
We believe our technologies will greatly increase the adoption of
mobile payments and alternate banking solutions in sectors that
must quickly adapt and migrate towards new technologies that
facilitate convenient and safe contactless payments. To survive and
succeed in this environment, businesses need to adopt new
technologies to engage, communicate and process payments with their
customers from a supplier that widely supports innovation and
adaptation as the industry evolves. By embracing technological
advancement in the payment and banking industries, we are
well-positioned to meet the growing needs of existing and
prospective clients and intend for our current and future products
to be at the forefront of solving these accelerated market
needs.
Corporate Information
We were originally formed as
a Florida corporation on July 2, 1998 as Health Express USA, Inc.
On August 29, 2005, we changed our name to CSI Business, Inc and
reincorporated as a Nevada corporation. On September 15, 2006, we
changed our name to Natural Nutrition Inc. On October 27, 2009, we
changed our name to AppTech Corp. We filed Articles of
Domestication to change the domicile of the Company from Nevada to
Wyoming on July 18, 2011. We reincorporated in Delaware on December
23, 2021 and changed our name to AppTech Payments Corp. Our
principal executive offices are located at 5876 Owens Avenue, Suite
100, Carlsbad, California 92008. Our phone number is (760)
707-5959. Our website address is www.apptechcorp.com. We do not
incorporate the information on or accessible through our website
into this prospectus. We have included our website address in this
prospectus solely as an inactive textual reference.
The
Offering
| Common Stock offered by us |
|
1,666,667 shares of Common Stock |
| |
|
|
| Common Stock to
be outstanding immediately after this offering |
|
18,363,947 shares of Common Stock |
| |
|
|
| Concurrent
private placement |
|
In a concurrent private placement, we are selling to the
purchaser of Common Stock in this offering warrants to purchase up
to an additional 100% of the number of shares of Common Stock
purchased in this offering. Each warrant will be exercisable for
one share of Common Stock at an exercise price of $4.64 per share.
The warrants are exercisable at six months following the issue date
and will expire five and one-half years from the issue date. The
warrants and the shares of Common Stock issuable upon the exercise
of the warrants, or the warrant shares, are not being registered
under the Securities Act, pursuant to the registration statement of
which this prospectus supplement and the accompanying base
prospectus form a part nor are such warrants and warrant shares
being offered pursuant to such prospectus supplement and base
prospectus. The warrants and warrant shares are being offered
pursuant to an exemption provided in Section 4(a)(2) of the
Securities Act and Rule 506(b) promulgated thereunder. The warrants
are not and will not be listed for trading on any national
securities exchange. Each purchaser will be an “accredited
investor” as such term is defined in Rule 501(a) under the
Securities Act. See “Private Placement Transaction.” |
| |
|
|
| Best Efforts |
|
We have agreed to issue and sell the securities offered hereby
to the investor through the Placement Agent, and the Placement
Agent has agreed to offer and sell such securities on a “best
efforts” basis. The Placement Agent is not required to sell any
specific number or dollar amount of the securities offered hereby,
but will use its best efforts to sell such securities. See the
section entitled “Plan of Distribution” on page S-11 of this
prospectus supplement. |
| |
|
|
| Use of Proceeds |
|
We currently intend to use the net proceeds from the sale of
our securities under this prospectus to repay loan forbearance
agreements, working capital and general corporate purposes. See the
section entitled “Use of Proceeds” on page S-7 of this
prospectus supplement. |
| |
|
|
| Risk Factors |
|
Investing in our Common Stock involves a high degree of risk.
See the “Risk Factors” section on page S-4 of this
prospectus supplement and other information included or
incorporated by reference into this prospectus supplement for a
discussion of factors you should carefully consider before deciding
to invest in our Common Stock. |
| |
|
|
| Nasdaq symbol |
|
Our Common Stock is listed on Nasdaq under the symbol
“APCX.” |
The number of shares of our Common Stock to be outstanding after
this offering is based on 16,697,280 shares of our Common Stock
outstanding as of January 29, 2023, and excludes, as of such
date:
| |
● |
1,089,868 shares of our
Common Stock issuable upon the exercise of options outstanding at a
weighted average exercise price of $7.00 per share; |
| |
|
|
| |
● |
454,545 shares of Common
Stock available for issuance under the Equity Incentive
Plan; |
| |
|
|
| |
● |
4,275,464 shares
of Common Stock issuable upon exercise of the warrants issued in
our IPO; and |
| |
|
|
| |
● |
1,666,667 shares
of Common Stock issuable upon exercise of the warrants sold in the
concurrent private placement with this offering. See “Private
Placement Transaction.” |
RISK
FACTORS
An investment in our securities involves a high degree of risk.
Before deciding whether to invest in our securities, you should
carefully consider the risks and uncertainties described below, in
the accompanying prospectus, and any documents incorporated by
reference herein and therein. You should also consider the risks,
uncertainties and assumptions discussed under the heading “Risk
Factors” included in our most recent Annual Report on Form 10-K, as
revised or supplemented by our most recent Quarterly Report on Form
10-Q, each of which are on file with the SEC and are incorporated
herein by reference, and which may be amended, supplemented or
superseded from time to time by other reports we file with the SEC
in the future. There may be other unknown or unpredictable
economic, business, competitive, regulatory or other factors that
could have material adverse effects on our future results. Our
business, business prospects, financial condition or operating
results could be harmed by any of these risks, as well as other
risks not currently known to us or that we currently consider
immaterial. This could cause the trading price of our Common Stock
to decline, resulting in a loss of all or part of your
investment.
Risks Related to This Offering
You will experience immediate and substantial dilution in the
net tangible book value per share of the Common Stock you purchase.
You may also experience future dilution as a result of future
equity offerings.
The price per share, together with the number of shares of our
Common Stock we propose to issue and ultimately will issue if this
offering is completed, may result in an immediate decrease in the
market price of our Common Stock. Our historical net tangible book
value as of September 30, 2022 was $5,178,000, or approximately
$0.31 per share of our Common Stock. After giving effect to the
1,666,667 shares of our Common Stock to be sold in this offering at
a public offering price of $3.00 per, our as adjusted net tangible
book value as of September 30, 2022 would have been $9,778,000, or
approximately $0.53 per share of our Common Stock. This represents
an immediate increase in the net tangible book value of $4,600,000
per share of our Common Stock to our existing stockholders and an
immediate dilution in net tangible book value of approximately
$2.47 per share of our Common Stock to new investors, representing
the difference between the public offering price and our as
adjusted net tangible book value as of September 30, 2022, after
giving effect to this offering, and the public offering price per
share. In addition, we are issuing warrants to purchase shares of
common stock in a concurrent private placement. Furthermore, if
outstanding options or warrants are exercised, you could experience
further dilution.
In addition, we have a significant number of stock options and
warrants outstanding, and, in order to raise additional capital, we
may in the future offer additional shares of our Common Stock or
other securities convertible into or exchangeable for our Common
Stock at prices that may not be the same as the price per share in
this offering. In the event that the outstanding options or
warrants are exercised or settled, or that we make additional
issuances of Common Stock or other convertible or exchangeable
securities, you could experience additional dilution. We cannot
assure you that we will be able to sell shares or other securities
in any other offering at a price per share that is equal to or
greater than the price per share paid by investors in this
offering, and investors purchasing shares or other securities in
the future could have rights superior to existing stockholders,
including investors who purchase shares of Common Stock in this
offering. The price per share at which we sell additional shares of
our Common Stock or securities convertible into Common Stock in
future transactions, may be higher or lower than the price per
share in this offering. As a result, purchasers of the shares we
sell, as well as our existing stockholders, will experience
significant dilution if we sell at prices significantly below the
price at which they invested. See the section entitled
“Dilution” below for a more detailed illustration of the
dilution you would incur if you participate in this offering.
Resales of our Common Stock in the public market during this
offering by our stockholders may cause the market price of our
Common Stock to fall.
Sales of a substantial number of shares of our Common Stock could
occur at any time. The issuance of new shares of our Common Stock
could result in resales of our Common Stock by our current
stockholders concerned about the potential ownership dilution of
their holdings. In turn, these resales could have the effect of
depressing the market price for our Common Stock.
We will have broad discretion in the use of the net proceeds
from this offering and may not use them effectively.
We currently intend to use the net proceeds from the offering of
securities under this prospectus to repay loan forbearance
agreements, general corporate and working capital purposes, as
described in the section of this prospectus supplement entitled
“Use of Proceeds.” We will have broad discretion in the
application of the net proceeds in the category of general
corporate purposes and investors will be relying on the judgment of
our management regarding the application of the proceeds of this
offering.
The precise amount and timing of the application of these proceeds,
if any, will depend upon a number of factors, such as our funding
requirements and the availability and costs of other funds. As of
the date of this prospectus supplement, we cannot specify with
certainty all of the particular uses for the net proceeds to us
from this offering. Depending on the outcome of our efforts and
other unforeseen events, our plans and priorities may change and we
may apply the net proceeds of this offering in different manners
than we currently anticipate.
The failure by our management to apply these funds effectively
could harm our business, financial condition and results of
operations. Pending their use, we may invest the net proceeds from
this offering in short-term, interest-bearing instruments. These
investments may not yield a favorable return to our
stockholders.
This offering may cause the trading price of our Common Stock
to decrease.
The price per share, together with the number of shares of Common
Stock we propose to issue and ultimately will issue if this
offering is completed, may result in an immediate decrease in the
market price of our Common Stock. This decrease may continue after
the completion of this offering.
This offering is being conducted on a “best efforts”
basis.
The Placement Agent is offering the shares on a “best efforts”
basis, and the Placement Agent is under no obligation to purchase
any shares for its own account. The Placement Agent is not required
to sell any specific number or dollar amount of shares of Common
Stock in this offering but will use its best efforts to sell the
securities offered in this prospectus supplement. As a “best
efforts” offering, there can be no assurance that the offering
contemplated hereby will ultimately be consummated.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement contains “forward-looking statements”
within the meaning of Section 27A of the Securities Act, Section
21E of the Exchange Act of 1934, as amended (the “Exchange Act”),
and the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include, but are not limited to,
statements that express our intentions, beliefs, expectations,
strategies, predictions or any other statements relating to our
future activities or other future events or conditions. These
statements are based on current expectations, estimates and
projections about our business based, in part, on assumptions made
by management. These statements are not guarantees of future
performance and involve risks, uncertainties and assumptions that
are difficult to predict. Therefore, actual outcomes and results
may, and are likely to, differ materially from what is expressed or
forecasted in the forward-looking statements due to numerous
factors discussed from time to time in this prospectus and in other
documents which we file with the SEC. In addition, such statements
could be affected by risks and uncertainties related to:
|
● |
uncertainty associated with anticipated launch of our text
payment platform and other potential advanced payment solutions we
intend to launch in the future; |
|
● |
substantial investment and costs associated with new potential
revenue streams and their corresponding contractual
obligations; |
|
● |
dependence on third-party channel and referral partners, who
comprise a portion of our sales force, for gaining new
clients; |
|
● |
a slowdown or reduction in our sales due to a reduction in
end-user demand, unanticipated competition, regulatory issues, or
other unexpected circumstances |
|
● |
uncertainty regarding our ability to achieve profitability and
positive cash flow through the commercialization of the products we
offer or intend to offer in the future; |
|
● |
our current dependence on third-party payment processors to
facilitate our merchant services capabilities; |
|
● |
delay in or failure to obtain regulatory approval of our text
payment system or any future products in additional countries; |
|
● |
uncertainty associated with our ability to achieve
profitability through the HotHand patents; and |
|
● |
the adverse effects of COVID-19 on processing volumes resulting
from (a) limitations on in-person access to our merchants’
businesses or (b) the unwillingness of customers to visit our
merchants’ businesses. |
You should read this prospectus supplement, the accompanying
prospectus and the documents that we incorporate by reference
herein and therein completely and with the understanding that our
actual future results may be materially different from what we
currently expect. You should assume that the information appearing
in this prospectus supplement, the accompanying prospectus and any
document incorporated by reference herein and therein is accurate
as of its date only. Because the risks referred to above could
cause actual results or outcomes to differ materially from those
expressed in any forward-looking statements made by us or on our
behalf, you should not place undue reliance on any forward-looking
statements. Further, any forward-looking statement speaks only as
of the date on which it is made, and we undertake no obligation to
update any forward-looking statement to reflect events or
circumstances after the date on which the statement is made or to
reflect the occurrence of unanticipated events. New factors emerge
from time to time, and it is not possible for us to predict which
factors may arise. In addition, we cannot assess the impact of each
factor on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.
We qualify all of the information presented in this prospectus
supplement, the accompanying prospectus, any other prospectus
supplement and any document incorporated herein or therein by
reference, and particularly our forward-looking statements, by
these cautionary statements.
USE OF
PROCEEDS
We estimate the net proceeds to us from this offering will be
approximately $4.5 million, after deducting the placement agent fee
and estimated offering expenses payable to us. We intend to use the
net proceeds from the offering of securities under this prospectus
to repay loan forbearance agreements and the remainder of the
proceeds for working capital and general corporate purposes. The
loan forbearance agreements have maturity date of March 31, 2023
and no interest rate.
The timing and amount of our actual expenditures will be based on
many factors, including cash flows from operations and the
anticipated growth of our business. As of the date of this
prospectus, we cannot specify with certainty all of the particular
uses for the net proceeds to us from this offering. As a result,
our management will have broad discretion regarding the timing and
application of the net proceeds from this offering, and investors
will be relying on the judgment of our management regarding the
application of the net proceeds from this offering.
If the warrants that we are offering in the concurrent private
placement are fully exercised for cash, we will receive additional
proceeds of up to approximately $7.7 million. There is no assurance
any of the warrants will be exercised.
dilution
If you purchase our Common Stock (or equivalent) in this offering,
your interest will be diluted to the extent of the difference
between the public offering price per share and the net tangible
book value per share of our Common Stock after this offering. We
calculate net tangible book value per share by dividing our net
tangible assets (tangible assets less total liabilities) by the
number of shares of our Common Stock issued and outstanding as of
September 30, 2022.
Our net tangible book value as of September 30, 2022 was
$5,178,000, or approximately $0.31 per share. After giving effect
to the sale of our Common Stock in this offering at a public
offering price of $3.00 per share, our as adjusted net tangible
book value as of September 30, 2022 would have been $9,778,000, or
approximately $0.53 per share of our Common Stock. This represents
an immediate increase in the net tangible book value of $0.22 per
share of our Common Stock to our existing stockholders and an
immediate dilution in net tangible book value of approximately
$2.47 per share of our Common Stock to new investors. The following
table illustrates this per share dilution:
| Public
offering price per share of our Common Stock |
|
$ |
3.00 |
|
| Net
tangible book value per share as of September 30, 2022 |
|
$ |
0.31 |
|
|
Increase in net tangible book value per share of our Common Stock
attributable to this offering |
|
$ |
0.22 |
|
|
As adjusted net tangible book value per share of our Common Stock
as of September 30, 2022, after giving effect to this offering |
|
$ |
0.53 |
|
|
Dilution per share to new investors purchasing shares of our Common
Stock in this offering |
|
$ |
2.47 |
|
The above discussion and table are
based on 16,633,563 shares of our Common Stock outstanding as of
September 30, 2022. The number of shares outstanding as of
September 30, 2022 excludes, as of such date:
| ● |
1,039,868
shares of our Common Stock issuable upon the exercise of options
outstanding at a weighted average exercise price of $7.29 per
share; |
| |
|
| ● |
509,399
shares of Common Stock available for issuance under the Equity
Incentive Plan; and |
| |
|
| ● |
1,666,667
shares of Common Stock issuable upon the exercise of the warrants
to be issued in the concurrent private placement at an exercise
price of $4.64 per share. See “Private Placement
Transaction.” |
Except as otherwise indicated, all information in this prospectus
supplement assumes no exercise or forfeiture of the outstanding
options or warrants after September 30, 2022, which are assumed
will be exercised for purposes of the above dilution
calculation.
DESCRIPTION OF SECURITIES WE ARE
OFFERING
We are offering 1,666,667 shares of our Common Stock.
Common Stock
The material terms and provisions of
our Common Stock and each other class of our securities that
qualifies or limits our Common Stock are described in the section
entitled “Description of Securities We May Offer” beginning
on page 6 of the accompanying prospectus.
We currently
have authorized 105,263,157 shares of common stock, par value
$0.001 per share. As of January 29, 2023,
there were 16,697,280 shares of common stock outstanding held
of record by 302 stockholders. Holders of our common stock
have no preemptive rights and no right to convert their common
stock into any other securities. There are no redemption or sinking
fund provisions applicable to the common stock. All outstanding
shares of our common stock are fully paid and
nonassessable.
PRIVATE
PLACEMENT TRANSACTIOn
Concurrently with the sale of shares of common stock in this
offering, we will issue and sell to the investors in this offering
warrants in a private placement to purchase up to an aggregate of
1,666,667 shares of Common Stock at an exercise price equal to
$4.64 per share.
The warrants and the shares of Common Stock issuable upon the
exercise of such warrants, or warrant shares, are not being
registered under the Securities Act, are not being offered
pursuant to this prospectus supplement and the accompanying base
prospectus and are being offered pursuant to the exemption provided
in Section 4(a)(2) under the Securities Act and Rule 506(b)
promulgated thereunder. Accordingly, purchasers may only sell
warrant shares pursuant to an effective registration statement
under the Securities Act covering the resale of those
warrant shares, an exemption under Rule 144 under
the Securities Act or another applicable exemption under
the Securities Act.
Exercisability. The warrants are initially
exercisable six months following the issue date and
will expire
five-and-a-half years from the date of issuance, at which time any
unexercised warrants will expire and cease to be
exercisable. The warrants will be exercisable, at the
option of the holder, in whole or in part by delivering to us a
duly executed exercise notice and, by payment in full in
immediately available funds for the number of warrant shares. If a
registration statement registering the issuance of the warrant
shares under the Securities Act is not effective or
available, the holder may, in its sole discretion, elect to
exercise the warrant through a cashless exercise, in which case the
holder would receive upon such exercise the net number of shares of
common stock determined according to the formula set forth in the
warrant.
Exercise Limitation. A holder will not have the right
to exercise any portion of the warrant if the holder (together with
its affiliates) would beneficially own in excess of 4.99% (or, upon
election of the holder, 9.99%) of the number of shares of our
common stock outstanding immediately after giving effect to the
exercise, as such percentage ownership is determined in accordance
with the terms of the warrants. However, any holder may increase or
decrease such percentage, provided that any increase will not be
effective until the 61st day after such election.
Exercise Price Adjustment. The exercise price of the
warrants is subject to appropriate adjustment in the event of
certain stock dividends and distributions, stock splits, stock
combinations, reclassifications or similar events affecting our
Common Stock and also upon any distributions of assets, including
cash, stock or other property to our stockholders.
Exchange Listing. There is no established trading
market for the warrants and we do not expect a market to develop.
In addition, we do not intend to apply for the listing of the
warrants on any national securities exchange or other trading
market.
Fundamental Transactions. If a fundamental
transaction occurs, then the successor entity will succeed to, and
be substituted for us, and may exercise every right and power that
we may exercise and will assume all of our obligations under the
warrants with the same effect as if such successor entity had been
named in the warrant itself. If, at any time while the warrants are
outstanding: (1) we consolidate or merge with or into another
entity, and after giving effect to such transaction, our
stockholders immediately prior to such transaction own less than
fifty percent (50%) of the aggregate voting power of the Company or
the successor entity of such transaction; (2) we sell, lease,
assign, convey or otherwise transfer all or substantially all of
our assets; (3) any tender offer or exchange offer (whether
completed by us or a third party) is completed pursuant to which
holders of common stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been
accepted by the holders of fifty percent (50%) or more of the
outstanding common stock; (4) we effect any reclassification of our
shares of common stock or compulsory share exchange pursuant to
which outstanding shares of common stock are converted or exchanged
for other securities, cash or property, after giving effect to such
transaction, our stockholders immediately prior to such transaction
own less than fifty percent (50%) of the aggregate voting power of
the Company or the successor entity of such transaction; or (5) any
transaction is consummated whereby any person or entity acquires
more than 50% of our outstanding shares of common stock (each, a
“Fundamental Transaction”), then upon any subsequent exercise of a
warrant, the holder thereof will have the right to receive the same
amount and kind of securities, cash or other property as it would
have been entitled to receive upon the occurrence of such
Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction, the holder of the number of shares then
issuable upon exercise of the warrant. If holders of our common
stock are given a choice as to the securities, cash or property to
be received in a fundamental transaction, then the holder shall be
given the same choice as to the consideration it receives upon any
exercise of the private placement warrant following such
fundamental transaction. In addition, in certain circumstances,
upon a Fundamental Transaction, the holder of a warrant will have
the right to require us to repurchase its warrants at the
Black-Scholes value; provided, however, that, if the Fundamental
Transaction is not within our control, including not approved by
our Board, then the holder will only be entitled to receive the
same type or form of consideration (and in the same proportion), at
the Black-Scholes value of the unexercised portion of the warrant
that is being offered and paid to the holders of our common stock
in connection with the Fundamental Transaction.
Rights as a Stockholder. Except as otherwise provided
in the warrants or by virtue of such holder’s ownership of shares
of our common stock, the holder of a warrant will not have the
rights or privileges of a holder of our common stock, including any
voting rights, until the holder exercises the warrant.
PLAN OF DISTRIBUTION
EF Hutton has agreed to act as our
exclusive placement agent in connection with this offering subject
to the terms and conditions of the placement agent agreement dated
January 30, 2023. The Placement Agent is not purchasing or selling
any of the securities offered by this prospectus supplement, nor is
it required to arrange the purchase or sale of any specific number
or dollar amount of securities, but has agreed to use its
reasonable best efforts to arrange for the sale of all of the
securities offered hereby. Therefore, we will enter into a
securities purchase agreement directly with certain investor in
connection with this offering and we may not sell the entire amount
of securities offered pursuant to this prospectus
supplement.
We will deliver the securities being
issued to the investor upon receipt of such investor’s funds for
the purchase of the securities offered pursuant to this prospectus
supplement. We expect to deliver the securities being offered
pursuant to this prospectus supplement, as well as the warrants
offered in the concurrent private placement, on or about January
30, 2023.
We have agreed to indemnify the
Placement Agent against specified liabilities, including
liabilities under the Securities Act, and to contribute to payments
the Placement Agent may be required to make in respect
thereof.
Fees and Expenses
We have engaged EF Hutton as our
exclusive placement agent in connection with this offering. This
offering is being conducted on a “best efforts” basis and the
Placement Agent has no obligation to buy any of the securities from
us or to arrange for the purchase or sale of any specific number or
dollar amount of securities. We have agreed to pay the Placement
Agent a fee based on the aggregate proceeds as set forth in the
table below:
|
|
|
Per Share |
|
Total |
|
Offering price |
|
$ |
3.00 |
|
|
$ |
5,000,001 |
|
|
Placement
Agent fees(1) |
|
$ |
0.24 |
|
|
$ |
400,000.08 |
|
|
Proceeds, before expenses, to us |
|
$ |
2.76 |
|
|
$ |
4,600,000.92 |
|
|
(1) |
We have
agreed to pay the Placement Agent a cash placement commission equal
to 8.0% of the aggregate proceeds from the sale of the shares of
Common Stock sold in this offering. We have also agreed to
reimburse the Placement Agent for certain expenses incurred in
connection with this offering. |
We have also agreed to reimburse the
Placement Agent at closing for legal and other expenses incurred by
them in connection with the offering in an aggregate amount up to
$85,000. We estimate the total expenses payable by us for this
offering, excluding the placement agent fees and expenses, will be
approximately $85,000.
The Placement Agent may be deemed to
be an underwriter within the meaning of Section 2(a)(11) of the
Securities Act, and any commissions received by it and any profit
realized on the resale of the shares sold by it while acting as
principal might be deemed to be underwriting discounts or
commissions under the Securities Act. As an underwriter, the
Placement Agent would be required to comply with the requirements
of the Securities Act and the Exchange Act, including, without
limitation, Rule 415(a)(4) under the Securities Act and Rule 10b-5
and Regulation M under the Exchange Act. These rules and
regulations may limit the timing of purchases and sales of shares
by the Placement Agent acting as principal. Under these rules and
regulations, the Placement Agent:
| |
● |
may not engage in any
stabilization activity in connection with our securities;
and |
| |
|
|
| |
● |
may not bid for or purchase any
of our securities or attempt to induce any person to purchase any
of our securities, other than as permitted under the Exchange Act,
until it has completed its participation in the
distribution. |
Listing
Our Common Stock is listed on the
Nasdaq Capital Market under the trading symbol “APCX.”
Lock-Up Agreements
Our directors and executive officers
have entered into lock-up agreements. Under these agreements, these
individuals have agreed, subject to specified exceptions, not to
sell or transfer any shares of Common Stock or securities
convertible into, or exchangeable or exercisable for, our shares of
Common Stock during a period ending 90 days after the date of this
prospectus supplement, without first obtaining the written consent
of the investor. Specifically, these individuals have agreed, in
part, not to:
| |
● |
sell, offer, contract or grant
any option to sell (including any short sale), pledge, transfer,
establish an open “put equivalent position” within the meaning of
Rule 16a-l(h) under the Securities Exchange Act of 1934, as
amended; |
| |
|
|
| |
● |
enter into any swap or other
arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of our securities, whether
any such transaction is to be settled by delivery of our shares of
Common Stock, in cash or otherwise; |
| |
|
|
| |
● |
make any demand for or exercise
any right with respect to the registration of any of our
securities; |
| |
|
|
| |
● |
publicly disclose the intention
to make any offer, sale, pledge or disposition, or to enter into
any transaction, swap, hedge; |
| |
|
|
| |
● |
or other arrangement relating to
any of our securities. |
Notwithstanding these limitations,
these shares of Common Stock may be transferred under limited
circumstances, including, without limitation, by gift, will or
intestate succession.
Discretionary
Accounts
The Placement Agent does not intend
to confirm sales of the securities offered hereby to any accounts
over which it has discretionary authority.
Other Activities and
Relationships
The Placement Agent and certain of
its affiliates are full service financial institutions engaged in
various activities, which may include securities trading,
commercial and investment banking, financial advisory, investment
management, investment research, principal investment, hedging,
financing and brokerage activities. The Placement Agent and certain
of its affiliates have, from time to time, performed, and may in
the future perform, various commercial and investment banking and
financial advisory services for us and our affiliates, for which
they received or will receive customary fees and
expenses.
In the ordinary course of their
various business activities, the Placement Agent and certain of its
affiliates may make or hold a broad array of investments and
actively trade debt and equity securities (or related derivative
securities) and financial instruments (including bank loans) for
their own account and for the accounts of their customers, and such
investment and securities activities may involve securities and/or
instruments issued by us and our affiliates. If the Placement Agent
or its affiliates have a lending relationship with us, they
routinely hedge their credit exposure to us consistent with their
customary risk management policies. The Placement Agent and its
affiliates may hedge such exposure by entering into transactions
that consist of either the purchase of credit default swaps or the
creation of short positions in our securities or the securities of
our affiliates, including potentially the Common Stock offered
hereby. Any such short positions could adversely affect future
trading prices of the Common Stock offered hereby. The Placement
Agent and certain of its affiliates may also communicate
independent investment recommendations, market color or trading
ideas and/or publish or express independent research views in
respect of such securities or instruments and may at any time hold,
or recommend to clients that they acquire, long and/or short
positions in such securities and instruments.
LEGAL MATTERS
The validity of the securities
offered hereby will be passed upon for us by Nelson Mullins Riley
& Scarborough LLP, Washington, DC. The Placement Agent is being
represented in connection with this offering by Carmel, Milazzo
& Feil LLP, New York, New York.
EXPERTS
The financial statements of AppTech,
Inc. as of December 31, 2021 and 2020 and for each of the two years
in the period ended December 31, 2021, incorporated by reference in
this prospectus supplement and the accompanying prospectus to the
Annual Report on Form 10-K for the year ended December 31, 2021,
have been so incorporated in reliance on the report of
dbbmckennon, an independent registered public accounting
firm, given on the authority of said firm as experts in auditing
and accounting.
WHERE YOU CAN FIND MORE
INFORMATION
We have filed with the SEC a
registration statement on Form S-3 under the Securities Act with
respect to the securities offered by this prospectus. This
prospectus, which is part of the registration statement, omits
certain information, exhibits, schedules and undertakings set forth
in the registration statement. For further information pertaining
to us and the securities offered in this prospectus, reference is
made to that registration statement and the exhibits and schedules
to the registration statement. Statements contained in this
prospectus as to the contents or provisions of any documents
referred to in this prospectus are not necessarily complete, and in
each instance where a copy of the document has been filed as an
exhibit to the registration statement, reference is made to the
exhibit for a more complete description of the matters
involved.
We file annual, quarterly and current
reports, proxy statements and other information with the SEC. Our
SEC filings are available for free to the public over the Internet
on the SEC’s website at www.sec.gov. Our common stock is listed on
The Nasdaq Capital Market under the symbol “APCX.” General
information about our company, including our Annual Report on Form
10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K, as well as any amendments and exhibits to those reports, are
available free of charge through our website at www.apptechcorp.com
as soon as reasonably practicable after we file them with, or
furnish them to, the SEC. Information on, or that can be accessed
through, our website is not incorporated into this prospectus or
other securities filings and is not a part of these
filings.
INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE
The SEC allows us to “incorporate by
reference” information into this prospectus supplement, which means
important information may be disclosed to you by referring you to
another document filed separately with the SEC. Any information
incorporated by reference is deemed to be part of this prospectus
supplement.
We incorporate by reference in this
prospectus supplement the documents set forth below that have been
previously filed with the SEC as well as any filings we make with
the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act, on or after the date of this prospectus supplement and before
the termination of the applicable offering; provided, however,
that, except as specifically provided below, we are not
incorporating any documents or information deemed to have been
furnished rather than filed in accordance with SEC
rules:
| |
● |
our Annual Report on Form 10-K
for the year ended December 31, 2021, filed with the SEC on March
31, 2022; |
| |
|
|
| |
● |
our Definitive Proxy Statement on
Schedule 14A filed with the SEC on March 22, 2022 (to the extent
incorporated by reference into our Annual Report on Form
10-K); |
| |
|
|
| |
● |
our Quarterly Reports on Form
10-Q for the quarters ended March 31, 2022, June 30, 2022 and
September 30, 2022, filed with the SEC on May 10, 2022, August 5,
2022 and November 10, 2022, respectively; |
| |
|
|
| |
● |
our Current Reports on Form 8-K
filed with the SEC on January 5, 2022, February 2, 2022, April 21,
2022, May 6, 2022, May 27, 2022, July 15, 2022; and |
| |
|
|
| |
● |
the description of our common
stock contained in our registration statement on Form 8-A filed
with the SEC on December 20, 2021, under the Exchange
Act. |
Any statement contained in a document
incorporated by reference in this prospectus supplement shall be
deemed to be modified or superseded for purposes of this prospectus
supplement to the extent that a statement contained herein or in
any other subsequently filed document that also is incorporated by
reference in this prospectus supplement modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this prospectus supplement or the accompanying
prospectus.
Information furnished under Items
2.02 and 7.01 of any of our Current Reports on Form 8-K, including
any related exhibits under Item 9.01, will not be incorporated by
reference in this prospectus supplement.
To obtain copies of these filings,
see “Where You Can Find More Information.” We will provide
to each person, including any beneficial owner, to whom this
prospectus supplement is delivered, without charge upon written or
oral request, a copy of any or all of the information that has been
incorporated by reference into this prospectus supplement but not
delivered with the prospectus supplement, including exhibits that
are specifically incorporated by reference into such documents. You
should direct any requests for such information to:
AppTech Payments
Corp.
5876 Owens
Avenue, Suite 100
Carlsbad,
California 92008
(760)
707-5959
PROSPECTUS
$75,000,000
Preferred
Stock
Common Stock
Debt Securities
Warrants
Units
From time to
time, we may offer and sell shares of preferred stock, common
stock, debt securities or warrants to purchase preferred stock,
common stock or any combination of these securities, either
separately or in units, in one or more offerings in amounts, at
prices and on terms that we will determine at the time of the
offering. The debt securities and warrants may be convertible into
or exercisable or exchangeable for preferred stock, common stock or
debt securities and the preferred stock may be convertible into or
exchangeable for common stock. The aggregate initial offering price
of all securities sold by us under this prospectus will not exceed
$75,000,000.
Each time we
offer securities, we will provide you with specific terms of the
securities offered in supplements to this prospectus. The
prospectus supplement may also add, update or change information
contained in this prospectus. You should read this prospectus, the
information incorporated by reference in this prospectus, any
applicable prospectus supplement and the additional information
described below under the heading “Where You Can Find More
Information” carefully before you invest in any of the securities
offered hereby.
Our common
stock is currently traded on The Nasdaq Capital Market under the
symbol “APCX.” The last reported sale price of our common stock on
May 12, 2022 was $0.81 per share.
As of May 12, 2022, the aggregate
market value of our outstanding common stock held by non-affiliates
was approximately $9,574,823.70, which we calculated based on
16,208,958 shares of outstanding common stock, of which 11,820,770
shares were held by non-affiliates, and a price per share of $0.81
as of May 12, 2022, which is a date within 60 days prior to the
date of this prospectus. Pursuant to General Instruction I.B.6 of
Form S-3, in no event will we sell, pursuant to the registration
statement of which this prospectus forms a part, securities in a
public primary offering with a value exceeding one-third of the
aggregate market value of our outstanding common stock held by
non-affiliates in any 12-month period, so long as the aggregate
market value of our outstanding common stock held by non-affiliates
remains below $75 million. During the 12 calendar months prior to
and including the date of this prospectus, we have not offered or
sold any securities pursuant to General Instruction I.B.6 of Form
S-3.
Investing
in our securities involves a high degree of risk. See “Risk
Factors” on page 4 of this prospectus and in the other documents
incorporated by reference in this prospectus and the applicable
prospectus supplement to read about factors you should consider
before buying our securities.
Neither
the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
determined if this prospectus or any accompanying prospectus
supplement is truthful or complete. Any representation to the
contrary is a criminal offense.
The
securities offered by this prospectus may be sold directly by us to
investors, through agents designated from time to time or to or
through underwriters or dealers. We will set forth the names of any
underwriters or agents in an accompanying prospectus supplement.
For additional information on the methods of sale, you should refer
to the section entitled “Plan of Distribution.” The price to the
public of such securities and the net proceeds we expect to receive
from such sale will also be set forth in a prospectus
supplement.
The date of this prospectus is July
15, 2022
TABLE OF
CONTENTS
You
should rely only on the information contained or incorporated by
reference in this prospectus or any applicable prospectus
supplement. We have not authorized anyone to provide you with
information in addition to or different from that contained in this
prospectus or any applicable prospectus supplement. We will be
offering to sell, and seeking offers to buy, the securities only in
jurisdictions whether offers and sales are permitted. You should
not assume that the information in this prospectus or any
applicable prospectus supplement is accurate as of any date other
than the date on the front of those documents.
Unless the
context otherwise requires, throughout this prospectus and any
applicable prospectus supplement, the words “AppTech,” the
“Company,” the “registrant,” “we,” “us,” “our” and similar
expressions refer to AppTech Payments Corp., a Delaware
corporation, and its subsidiaries (as applicable), and the term
“securities” refers collectively to our preferred stock, common
stock, debt securities or warrants to purchase preferred stock,
common stock or debt securities, or any combination of the
foregoing securities.
ABOUT THIS
PROSPECTUS
This
prospectus is part of a registration statement on Form S-3 that we
have filed with the Securities and Exchange Commission, or SEC,
using a “shelf” registration process. Using this process, we may,
from time to time, sell any combination of the securities described
in this prospectus in one or more offering transactions up to a
total dollar amount of $75,000,000. This prospectus provides a
general description of the securities we may offer. Each time we
sell any securities under this prospectus, we will provide a
prospectus supplement that will contain more specific information
about the specific terms of that particular offering. Each such
prospectus supplement may also add, update or change information
contained in this prospectus. To the extent that any statement we
make in a prospectus supplement is inconsistent with statements
made in this prospectus or any document incorporated by reference
herein, the statements made in this prospectus will be deemed
modified or superseded by those made in the prospectus supplement.
This prospectus, together with the applicable prospectus
supplements and the documents incorporated by reference into this
prospectus, includes all material information relating to the
offering of the securities described in this prospectus. The
information contained in this prospectus is accurate only as of the
date of this prospectus, regardless of the time of delivery of this
prospectus or any sales of securities. To obtain additional
information that may be important to you, you should read the
exhibits we filed with the registration statement of which this
prospectus is a part or our other filings with the SEC. You should
read this prospectus, any applicable prospectus supplement and the
additional information described below under “Where You Can Find
More Information” before making any investment decision with
respect to the securities offered hereby.
SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This
prospectus, any applicable prospectus supplement and the documents
incorporated by reference contain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking
statements involve substantial risks and uncertainties. All
statements, other than statements of historical facts, included in
this prospectus, any applicable prospectus supplement and the
documents incorporate by reference regarding our strategy, future
operations, future financial position, future revenues, projected
costs, prospects, plans and objectives of management are
forward-looking statements. These statements are subject to risks
and uncertainties and are based on information currently available
to our management. Words such as “anticipate,” “believe,”
“estimate,” “expect,” “intend,” “may,” “plan,” “contemplates,”
“predict,” “project,” “target,” “likely,” “potential,” “continue,”
“ongoing,” “will,” “would,” “should,” “could,” or the negative of
these terms and similar expressions or words, identify
forward-looking statements. The events and circumstances reflected
in our forward-looking statements may not occur and actual results
could differ materially from those projected in our forward-looking
statements. Meaningful factors that could cause actual results to
differ include:
| |
● |
our going concern and history of
losses; |
| |
|
|
| |
● |
uncertainty associated
with anticipated launch of financial services platform or future
products; |
| |
|
| |
● |
substantial investment
and costs associated with new potential revenue streams and their
corresponding contractual obligations; |
| |
|
| |
● |
dependence on third-party channel and referral partners, who comprise a significant portion of
our sales force, for
gaining new clients; |
| |
|
| |
● |
a slowdown or reduction in our sales in due to a reduction in end user demand, unanticipated
competition,
regulatory issues, or other
unexpected circumstances; |
| |
|
|
| |
● |
uncertainty regarding our ability to achieve
profitability and positive cash flow through the commercialization
of the products we offer or intend to offer in the
future; |
| |
|
| |
● |
dependence on third-party payment processors to
facilitate our merchant services capabilities; |
| |
|
| |
● |
delay
in or failure to obtain regulatory approval of financial services
platform or any future products in additional
countries; |
| |
|
| |
● |
our
ability to operate our business while timely making payments
pursuant to our loan agreements; |
| |
|
| |
● |
our
need to raise additional financing to fund daily operations and
successfully grow our Company; |
| |
|
| |
● |
our
ability to retain and recruit appropriate employees, in particular
a productive sales force; |
| |
|
| |
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current and future laws and
regulations; |
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general economic uncertainty associated with the
COVID-19 pandemic; |
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the
adverse effects of COVID-19, and its unpredictable duration, in
regions where we have customers, employees and
distributors; |
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|
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the
adverse effects of COVID-19 on processing volumes resulting from
(a) limitations on in-person access to our merchants’ businesses or
(b) the unwillingness of customers to visit our merchants’
businesses; and |
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the
possibility that the economic impact of COVID-19 will lead to
changes in how consumers make purchases that we are unable to
monetize. |
All written and oral forward-looking
statements attributable to us or any person acting on our behalf
are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section. We caution
investors not to rely too heavily on the forward-looking statements
we make or that are made on our behalf. Although we believe that
the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, level of activity,
performance or achievements. Any forward-looking statement made by
us in this prospectus speaks only as of the date of this
prospectus. We undertake no obligation and specifically decline any
obligation to update any of these forward-looking statements after
the date of such statements are made, whether as a result of new
information, future events or otherwise. Please see, however, any
further disclosures we make on related subjects in any annual,
quarterly or current reports that we may file with the
SEC.
You should read this prospectus, the
documents that we reference in this prospectus and the documents
that have been filed as exhibits to the registration statement of
which this prospectus is a part completely and with the
understanding that our actual future results may be materially
different from what we expect.
In addition, you should refer to the
section of this prospectus entitled “Risk Factors” as well as the
documents we have incorporated by reference for a discussion of
other important factors that may cause our actual results to differ
materially from those expressed or implied by our forward-looking
statements. As a result of these factors, we cannot assure you that
the forward-looking statements in this prospectus will prove to be
accurate. Furthermore, if our forward-looking statements prove to
be inaccurate, the inaccuracy may be material. In light of the
significant uncertainties in these forward-looking statements, you
should not regard these statements as a representation or warranty
by us or any other person that we will achieve our objectives and
plans in any specified time frame, or at all.
PROSPECTUS SUMMARY
Through our scalable cloud-based
platform architecture and infrastructure coupled with our commerce
experiences development and delivery model, we intend to simplify
and streamline digital financial services for corporations, small
and midsized enterprises (“SMEs”) and consumers. We will accomplish
this through innovative omnichannel payment and digital banking
technologies that complement our core merchant services
capabilities. We believe there is opportunity to generate
significant revenue for the Company the near future by providing
innovative commerce solutions and experiences that resonate with
clients, their customers, and the market as a whole. Further, our
soon to be launched modular platform will equip forward-thinking
financial institutions, technology companies, and SMEs with
operational efficiencies, such as automated financial controls and
reconciliation in addition to manual administration.
Today, our Company’s merchant
services solutions provide financial processing for businesses to
accept cashless and/or contactless payments, such as credit cards,
ACH, wireless payments, and more. Our patented, exclusively
licensed, and proprietary merchant services software will offer,
new integrated solutions for frictionless digital and mobile
payment acceptance including acceptance of alternative payment
methods (“APMs”). We are extending and enhancing these capabilities
with software that solves for multi-use case, multi-channel,
API-driven, account-based issuer processing for card, digital
tokens, and payment transfer transactions. Our scalable business
model allows for expansive white-labeling, SaaS, and embedded
solutions that will drive the digital transformation of financial
services and generate diverse revenue streams for our
Company.
The financial services industry is
going through a period of intensive change driven by the
advancement of technology, the adaptation to societal changes
resulting from COVID-19, and the rapid rise of contactless
transactions. End-users expect ease of use and an enhanced user
experience in all their daily financial interactions. In this
rapidly evolving digital marketplace, our prospective clients, such
as merchants and independent software vendors (“ISVs”), have broad
and frequently changing requirements to meet consumer expectations
and operational efficiencies to maintain their competitive
edge.
Providing basic payment acceptance
and “lowest price” models is no longer the winning formula to
support the market. These entities recognize that staying
competitive in the digital age requires a partner with a platform
and services capable of delivering flexibility and growth while
streamlining operations to continually deliver increased revenue
and profitability opportunities. Our pricing is extremely
competitive, but we believe the value we create for financial
institutions, technology companies, and SMEs through our
technology, deployment model, services and consultative approach
will create true differentiation from our competitors.
Our global financial services
platform architecture and infrastructure is designed to be flexible
and configurable to meet current and future market needs. This will
empower our clients to take advantage of future platform
development and new innovative digital financial solutions by
leveraging off-the-shelf experiences and consuming our APIs.
Additionally, by taking a holistic view of all aspects of our
clients’ business, including risk, volume, user experience,
integration capabilities and technical needs, we will create
optimal and extensible financial technology solutions at a rapid
pace.
Through exclusive licensing and
partnership agreements to complement our patented technology
capabilities, we believe we will become leaders in the embedded
payment and digital banking sectors by supporting digital,
tokenized, multi-channel, embedded API-driven transactions. We
intend to accelerate this position through the integration of our
merchant services and a secure text payment solution with extensive
digital account-based and multi-channel issuer payment processing
capabilities. We believe that this will enable us to provide our
clients an end-to-end payment acceptance and digital banking
solution powering straight-through processing and embedded payment
opportunities in the B2B space. We expect to support clients
through the development of custom and off-the-shelf experiences by
delivering these solutions through public APIs and
Webhooks.
A key to the Company’s success and
market penetration is the continued development of
enterprise-grade, patent protected software for SMS text payments
via a mobile device. Our patented technology manages text messaging
for processing payments, notification, response, authentication,
marketing, advertising, information queries and reports. Once an
account is established through a multi-currency digital wallet,
neither internet connectivity nor a specific application is
required to process payments between merchants and end-users. These
features will be particularly beneficial for unbanked and under
banked individuals in developing or emerging markets where access
to the internet on a mobile device and modern banking institutions
may not be readily available. In addition, our software platform
will extend merchants’ marketplace capabilities by creating new
avenues and channels to request and receive frictionless, digital
payments and engaging end-users by utilizing a familiar,
convenient, and widely adopted technology.
We believe our technologies will
greatly increase the adoption of mobile payments and alternate
banking solutions in sectors that must quickly adapt and migrate
towards new technologies that facilitate convenient and safe
contactless payments. To survive and succeed in this environment,
businesses need to adopt new technologies to engage, communicate
and process payments with their customers from a supplier that
widely supports innovation and adaptation as the industry evolves.
By embracing technological advancement in the payment and banking
industries, we are well-positioned to meet the growing needs of
existing and prospective clients and intend for our current and
future products to be at the forefront of solving these accelerated
market needs.
Corporate
Information
We were
originally formed as a Florida corporation on July 2, 1998 as
Health Express USA, Inc. On August 29, 2005, we changed our name to
CSI Business, Inc and reincorporated as a Nevada corporation. On
September 15, 2006, we changed our name to Natural Nutrition Inc.
On October 27, 2009, we changed our name to AppTech Corp. We filed
Articles of Domestication to change the domicile of the Company
from Nevada to Wyoming on July 18, 2011. We reincorporated in
Delaware on December 23, 2021 and changed our name to AppTech
Payments Corp. Our principal executive offices are located at 5876
Owens Avenue, Suite 100, Carlsbad, California 92008. Our phone
number is (760) 707-5959. Our website address is
www.apptechcorp.com. We do not incorporate the information on or
accessible through our website into this prospectus. We have
included our website address in this prospectus solely as an
inactive textual reference.
RISK
FACTORS
An
investment in our securities involves a high degree of risk. You
should carefully consider the specific risks discussed or
incorporated by reference into this prospectus and the applicable
prospectus supplement, together with all the other information
contained in this prospectus and the applicable prospectus
supplement or incorporated by reference into this prospectus and
the applicable prospectus supplement, including the risks,
uncertainties and assumptions discussed under the caption “Risk
Factors” in documents we file from time to time with the SEC,
specifically our most recent Annual Report on Form 10-K, our
Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and
in subsequent filings. These risk factors may be amended,
supplemented or superseded from time to time by other reports we
file with the SEC in the future or by a prospectus supplement
relating to a particular offering of our securities. These risks
and uncertainties are not the only risks and uncertainties we face.
Additional risks and uncertainties not presently known to us, or
that we currently view as immaterial, may also impair our business.
If any of the risks or uncertainties described in our SEC filings
or any prospectus supplement or any additional risks and
uncertainties actually occur, our business, financial condition and
results of operations could be materially and adversely affected.
In that case, the trading price of our securities could decline and
you might lose all or part of your investment.
DESCRIPTION OF
SECURITIES WE MAY OFFER
This
prospectus contains summary descriptions of the securities we may
offer from time to time. These summary descriptions are not meant
to be complete descriptions of each security. The particular terms
of any securities will be described in the applicable prospectus
supplement.
Common
Stock
General
We currently
have authorized 105,263,158 shares of common stock, par value
$0.001 per share. As of May 12, 2022, there were 16,208,958 shares
of common stock outstanding held of record by 2,407 stockholders.
Holders of our common stock have no preemptive rights and no right
to convert their common stock into any other securities. There are
no redemption or sinking fund provisions applicable to the common
stock. All outstanding shares of our common stock are fully paid
and nonassessable.
The
following summary of the terms of our common stock is subject to
and qualified in its entirety by reference to our restated
certificate of incorporation and bylaws, copies of which are on
file with the SEC as exhibits to previous SEC filings. Please refer
to the section entitled “Where You Can Find More Information” for
directions on obtaining these documents.
Voting
Rights
The holders
of our common stock are entitled to one vote for each share held on
all matters submitted to a vote of our stockholders. The holders of
our common stock do not have any cumulative voting
rights.
Dividends
Holders of
our common stock are entitled to receive ratably any dividends
declared by our board of directors out of funds legally available
for that purpose, subject to any preferential dividend rights of
any outstanding convertible preferred stock.
Rights
Upon Liquidation
In the event
of our liquidation, dissolution or winding up, holders of our
common stock will be entitled to share ratably in all assets
remaining after payment of all debts and other liabilities and any
liquidation preference of any outstanding convertible preferred
stock.
Anti-Takeover
Effects of Our Certificate of Incorporation, Bylaws and Delaware
Law
Some
provisions of Delaware law and our certificate of incorporation and
bylaws could make the following transactions more difficult: our
acquisition by means of a tender offer; our acquisition by means of
a proxy contest or otherwise; or removal of our incumbent officers
and directors.
Section 203
of the Delaware General Corporation Law is applicable to takeovers
of Delaware corporations. Subject to exceptions enumerated in
Section 203, Section 203 provides that a corporation shall not
engage in any business combination with any “interested
stockholder” for a three-year period following the date that the
stockholder becomes an interested stockholder unless:
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prior to that date, the
board of directors of the corporation approved either the business
combination or the transaction that resulted in the stockholder
becoming an interested stockholder; |
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upon consummation of the
transaction that resulted in the stockholder becoming an interested
stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the
transaction commenced, though some shares may be excluded from the
calculation; and |
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on or subsequent to that
date, the business combination is approved by the board of
directors of the corporation and by the affirmative votes of
holders of at least two-thirds of the outstanding voting stock that
is not owned by the interested stockholder. |
Except as
specified in Section 203, an interested stockholder is generally
defined to include any person who, together with any affiliates or
associates of that person, beneficially owns, directly or
indirectly, 15% or more of the outstanding voting stock of the
corporation, or is an affiliate or associate of the corporation and
was the owner of 15% or more of the outstanding voting stock of the
corporation, any time within three years immediately prior to the
relevant date. Under certain circumstances, Section 203 makes it
more difficult for an interested stockholder to effect various
business combinations with a corporation for a three-year period,
although the stockholders may elect not to be governed by this
section, by adopting an amendment to the certificate of
incorporation or bylaws, effective 12 months after adoption. Our
restated certificate of incorporation and bylaws do not opt out
from the restrictions imposed under Section 203. We anticipate that
the provisions of Section 203 may encourage companies interested in
acquiring us to negotiate in advance with the board because the
stockholder approval requirement would be avoided if a majority of
the directors then in office excluding an interested stockholder
approve either the business combination or the transaction that
resulted in the stockholder becoming an interested stockholder.
These provisions may have the effect of deterring hostile takeovers
or delaying changes in control, which could depress the market
price of our common stock and deprive stockholders of opportunities
to realize a premium on shares of common stock held by
them.
In addition
to our board of directors’ ability to issue shares of preferred
stock, our restated certificate of incorporation and bylaws contain
provisions that may discourage, delay or prevent a change in our
management or control over us that stockholders may consider
favorable. Our restated certificate of incorporation and
bylaws:
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authorize the issuance of “blank check” preferred
stock that could be issued by our board of directors to thwart a
takeover attempt; |
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do
not provide for cumulative voting in the election of directors,
which would allow holders of less than a majority of the stock to
elect some directors; |
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establish a classified board of directors, as a
result of which the successors to the directors whose terms have
expired will be elected to serve from the time of election and
qualification until the third annual meeting following their
election; |
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provide that vacancies on the board of directors,
including newly-created directorships, may be filled only by a
majority vote of directors then in office; |
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limit
who may call special meetings of stockholders; |
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prohibit stockholder action by written consent,
requiring all actions to be taken at a meeting of the stockholders;
and |
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establish advance notice requirements for
nominating candidates for election to the board of directors or for
proposing matters that can be acted upon by stockholders at
stockholder meetings. |
Transfer Agent and
Registrar
The transfer
agent and registrar for our common stock is Transfer Online, Inc.
Their address is 512 SE Salmon Street, Portland, Oregon 97214 and
their phone number is (503) 227-2950.
Listing
Our common
stock is listed on The Nasdaq Capital Market under the symbol
“APCX.” We also have warrants listed on the Nasdaq Capital Market
under the symbol “APCXW.”
Preferred
Stock
General
We currently
have authorized 100,000 shares of preferred stock, par value
$0.001, the rights and preferences of which may be established from
time to time by our board of directors.
Under
Delaware law and our certificate of incorporation, our board of
directors is authorized, without stockholder approval, to issue
shares of preferred stock from time to time in one or more series.
Subject to limitations prescribed by Delaware law and our restated
certificate of incorporation and bylaws, the board of directors can
determine the number of shares constituting each series of
preferred stock and the designation, preferences, voting powers,
qualifications, and special or relative rights or privileges of
that series. These may include provisions concerning voting,
redemption, dividends, dissolution or the distribution of assets,
conversion or exchange, and other subjects or matters as may be
fixed by resolution of the board or an authorized committee of the
board. The preferred stock offered by this prospectus will, when
issued, be fully paid and nonassessable.
Our board of
directors could authorize the issuance of shares of preferred stock
with terms and conditions which could have the effect of
discouraging a takeover or other transaction which holders of some,
or a majority, of our common stock might believe to be in their
best interests or in which holders of some, or a majority, of our
common stock might receive a premium for their shares over the then
market price of those shares.
If we offer
a specific series of preferred stock under this prospectus, we will
describe the terms of the preferred stock in the prospectus
supplement for such offering and will file a copy of the
certificate establishing the terms of the preferred stock with the
SEC. To the extent required, this description will
include:
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the
title and stated value; |
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the
number of shares offered, the liquidation preference per share, and
the purchase price; |
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the
dividend rate(s), period(s), and/or payment date(s), or method(s)
of calculation for such dividends; |
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whether dividends will be cumulative or
non-cumulative and, if cumulative, the date from which dividends
will accumulate; |
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the
procedures for any auction and remarketing, if any; |
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the
provisions for a sinking fund, if any; |
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any
listing of the preferred stock on any securities exchange or
market; |
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whether the preferred stock will be convertible
into AppTech common stock, and, if applicable, the conversion price
(or how it will be calculated) and conversion period; |
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whether the preferred stock will be exchangeable
into debt securities, and, if applicable, the exchange price (or
how it will be calculated) and exchange period; |
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voting rights, if any, of the preferred
stock; |
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a
discussion of any material and/or special U.S. federal income tax
considerations applicable to the preferred stock; |
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the
relative ranking and preferences of the preferred stock as to
dividend rights and rights upon liquidation, dissolution, or
winding up of the affairs of AppTech; and |
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any
material limitations on issuance of any class or series of
preferred stock ranking senior to or on a parity with the series of
preferred stock as to dividend rights and rights upon liquidation,
dissolution, or winding up of AppTech. |
The transfer
agent and registrar for any series or class of preferred stock will
be set forth in the applicable prospectus supplement.
Series
A Preferred Stock
Our
certificate of incorporation designates 14 shares of our preferred
stock as “Series A Preferred Stock.” As of May 12, 2022 there were
14 shares of Series A Preferred Stock outstanding.
Conversion. Each
share of Series A Preferred Stock is convertible, at the option of
the respective holder, at any time, into seven hundred eighty (82)
fully paid and non-assessable shares of common stock.
Liquidation
Preference. The Series A Preferred Stock has no liquidation
preference.
Voting
Rights. The holders of Series A Preferred Stock and the holders
of common stock vote together and not as separate classes. The
Series A Preferred Stock is counted on an as-converted
basis.
Dividends. The
Series A Preferred Stock does not accrue dividends. The holders of
Series A Preferred Stock will be entitled to receive dividends and
other distributions on a pro rata basis with the holders of common
stock on an as-converted basis.
Redemption. The
Series A Preferred Stock is not redeemable.
Debt
Securities
General
We may
issue, from time to time, debt securities in one or more series
that will consist of either senior debt or subordinated debt under
one or more trust indentures to be executed by us and a specified
trustee. The terms of the debt securities will include those stated
in the indenture and those made a part of the indenture (before any
supplements) by reference to the Trust Indenture Act of 1939. The
indentures will be qualified under the Trust Indenture Act. Debt
securities, whether senior or subordinated, may be issued as
convertible debt securities or exchangeable debt
securities.
The
following description sets forth certain anticipated general terms
and provisions of the debt securities to which any prospectus
supplement may relate. The particular terms of the debt securities
offered by any prospectus supplement (which terms may be different
than those stated below) and the extent, if any, to which such
general provisions may apply to the debt securities so offered will
be described in the prospectus supplement relating to such debt
securities. Accordingly, for a description of the terms of a
particular issue of debt securities, investors should review both
the prospectus supplement relating thereto and the following
description. Forms of the senior indenture (as discussed herein)
and the subordinated indenture (as discussed herein) are included
as exhibits to the registration statement of which this prospectus
is a part.
The debt
securities will be our direct obligations and may be either senior
debt securities or subordinated debt securities. The indebtedness
represented by subordinated securities will be subordinated in
right of payment to the prior payment in full of our senior debt
(as defined in the applicable indenture). Senior securities and
subordinated securities will be issued pursuant to separate
indentures (respectively, a senior indenture and a subordinated
indenture), in each case between us and a trustee.
Except as
set forth in the applicable indenture and described in a prospectus
supplement relating thereto, the debt securities may be issued
without limit as to aggregate principal amount, in one or more
series, secured or unsecured, in each case as established from time
to time in or pursuant to authority granted by a resolution of our
board of directors or as established in the applicable indenture.
All debt securities of one series need not be issued at the time
and, unless otherwise provided, a series may be reopened, without
the consent of the holders of the debt securities of such series,
for issuance of additional debt securities of such series. The
applicable indenture may provide that we may issue debt securities
in any currency or currency unit designated by us. Except for any
limitations on consolidation, merger and sale of all or
substantially all of our assets that may be contained in the
applicable indenture, the terms of such indenture will not contain
any covenants or other provisions designed to afford holders of any
debt securities protection with respect to our operations,
financial condition or transactions involving us.
The
prospectus supplement relating to any series of debt securities
being offered will contain the specific terms thereof, including,
without limitation:
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the
title of such debt securities and whether such debt securities are
senior securities or subordinated securities and the terms of any
such subordination; |
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the
aggregate principal amount of such debt securities and any limit on
such aggregate principal amount; |
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the
percentage of the principal amount at which such debt securities
will be issued and, if other than the principal amount thereof, the
portion of the principal amount thereof payable upon declaration of
acceleration of the maturity thereof, or (if applicable) the
portion of the principal amount of such debt securities which is
convertible into common stock or preferred stock, or the method by
which any such portion shall be determined; |
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the
date or dates, or the method for determining the date or dates, on
which the principal of such debt securities will be
payable; |
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the
rate or rates (which may be fixed or variable), or the method by
which the rate or rates shall be determined, at which such debt
securities will bear interest, if any; |
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the
date or dates, or the method for determining such date or dates,
from which any interest will accrue, the interest payment dates on
which any such interest will be payable, the regular record dates
for such interest payment dates, or the method by which any such
date shall be determined, the person to whom such interest shall be
payable, and the basis upon which interest shall be calculated if
other than that of a 360-day year of twelve 30-day
months; |
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the
right, if any, to extend the interest payment periods and the
duration of the extensions; |
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the
place or places where the principal of (and premium, if any) and
interest, if any, on such debt securities will be payable, such
debt securities may be surrendered for conversion or registration
of transfer or exchange and notices or demands to or upon us in
respect of such debt securities and the applicable indenture may be
served; |
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the
period or periods within which, the price or prices at which and
the terms and conditions upon which such debt securities may be
redeemed, as a whole or in part, at our option, if we have such an
option; |
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our
obligation, if any, to redeem, repay or purchase such debt
securities pursuant to any sinking fund or analogous provision or
at the option of a holder thereof, and the period or periods within
which, the price or prices at which and the terms and conditions
upon which such debt securities will be redeemed, repaid or
purchased, as a whole or in part, pursuant to such
obligation; |
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if
other than U.S. dollars, the currency or currencies in which such
debt securities are denominated and payable, which may be a foreign
currency or units of two or more foreign currencies or a composite
currency or currencies, and the terms and conditions relating
thereto; |
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whether the amount of payments of principal of
(and premium, if any) or interest, if any, on such debt securities
may be determined with reference to an index, formula or other
method (which index, formula or method may, but need not be, based
on a currency, currencies, currency unit or units or composite
currencies) and the manner in which such amounts shall be
determined; |
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any
additions to, modifications of or deletions from the terms of such
debt securities with respect to the events of default or covenants
set forth in the indenture; |
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any
provisions for collateral security for repayment of such debt
securities; |
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whether such debt securities will be issued in
certificated and/or book-entry form; |
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whether such debt securities will be in
registered or bearer form and, if in registered form, the
denominations thereof if other than $1,000 and any integral
multiple thereof and, if in bearer form, the denominations thereof
and terms and conditions relating thereto; |
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whether issued in the form of one or more global
securities and whether all or a portion of the principal amount of
the debt securities is represented thereby; |
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if
other than the entire principal amount of the debt securities when
issued, the portion of the principal amount payable upon
acceleration of maturity, and the terms and conditions of any
acceleration; |
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if
applicable, covenants affording holders of debt protection with
respect to our operations, financial condition or transactions
involving us; |
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the
applicability, if any, of defeasance and covenant defeasance
provisions of the applicable indenture; |
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the
terms, if any, upon which such debt securities may be convertible
into our common stock or preferred stock and the terms and
conditions upon which such conversion will be effected, including,
without limitation, the initial conversion price or rate and the
conversion period; |
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if
applicable, any limitations on the ownership or transferability of
the common stock or preferred stock into which such debt securities
are convertible; |
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whether and under what circumstances we will pay
additional amounts as contemplated in the indenture on such debt
securities in respect of any tax, assessment or governmental charge
and, if so, whether we will have the option to redeem such debt
securities in lieu of making such payment; and |
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any
other material terms of such debt securities. |
The debt
securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the
maturity thereof. Special federal income tax, accounting and other
considerations applicable to these original issue discount
securities will be described in the applicable prospectus
supplement. The applicable prospectus supplement will set forth
material U.S. federal income tax considerations for holders of any
debt securities and the securities exchange or quotation system on
which any debt securities are listed or quoted, if any.
The
applicable indenture may contain provisions that would limit our
ability to incur indebtedness or that would afford holders of debt
securities protection in the event of a highly leveraged or similar
transaction involving us or in the event of a change of
control.
Senior
Debt Securities
Payment of
the principal of, premium, if any, and interest on senior debt
securities will rank on parity with all of our other senior
unsecured and unsubordinated debt.
Subordinated Debt
Securities
Payment of
the principal of, premium, if any, and interest on subordinated
debt securities will be subordinated and junior in right of payment
to the prior payment in full of all of our senior debt. We will set
forth in the applicable prospectus supplement relating to any
subordinated debt securities the subordination terms of such
securities as well as the aggregate amount of outstanding
indebtedness, as of the most recent practicable date, that by its
terms would be senior to the subordinated debt securities. We will
also set forth in such prospectus supplement limitations, if any,
on issuance of additional senior debt.
Merger,
Consolidation or Sale
The
applicable indenture will provide that we may consolidate with, or
sell, lease or convey all or substantially all of our assets to, or
merge with or into, any other corporation, provided
that:
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either we shall be the continuing corporation, or
the successor corporation (if other than the Company) formed by or
resulting from any such consolidation or merger or which shall have
received the transfer of such assets shall expressly assume payment
of the principal of (and premium, if any), and interest on, all of
the applicable debt securities and the due and punctual performance
and observance of all of the covenants and conditions contained in
the applicable indenture; |
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● |
immediately after giving effect to such
transaction and treating any indebtedness which becomes our
obligation or an obligation of one of our subsidiaries as a result
thereof as having been incurred by us or such subsidiary at the
time of such transaction, no event of default under the applicable
indenture, and no event which, after notice or the lapse of time,
or both, would become such an event of default, shall have occurred
and be continuing; and |
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an
officer’s certificate and legal opinion covering such conditions
shall be delivered to the applicable trustee. |
Covenants
The
applicable indenture will contain covenants requiring us to take
certain actions and prohibiting us from taking certain actions. The
covenants with respect to any series of debt securities will be
described in the prospectus supplement relating thereto.
Events
of Default, Notice and Waiver
Each
indenture will describe specific “events of default” with respect
to any series of debt securities issued thereunder. Such “events of
default” are likely to include (with grace and cure
periods):
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default in the payment
of any installment of interest on any debt security of such
series; |
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default in the payment
of principal of (or premium, if any, on) any debt security of such
series at its maturity or upon any redemption, by declaration or
otherwise; |
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● |
default in making any
required sinking fund payment for any debt security of such
series; |
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default in the
performance or breach of any other covenant or warranty of the
Company contained in the applicable indenture (other than a
covenant added to the indenture solely for the benefit of a series
of debt securities issued thereunder other than such series),
continued for a specified period of days after written notice as
provided in the applicable indenture; |
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default in the payment
of specified amounts of indebtedness of the Company or any
mortgage, indenture or other instrument under which such
indebtedness is issued or by which such indebtedness is secured,
such default having occurred after the expiration of any applicable
grace period and having resulted in the acceleration of the
maturity of such indebtedness, but only if such indebtedness is not
discharged or such acceleration is not rescinded or
annulled; |
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certain events of
bankruptcy, insolvency or reorganization, or court appointment of a
receiver, liquidator or trustee of the Company or any of our
significant subsidiaries or their property; and |
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any other event of
default provided in the applicable resolution of our board of
directors or the supplemental indenture under which we issue series
of debt securities. |
An event of
default for a particular series of debt securities does not
necessarily constitute an event of default for any other series of
debt securities issued under the indenture. Unless otherwise
indicated in the applicable prospectus supplement, if an event of
default under any indenture with respect to debt securities of any
series at the time outstanding occurs and is continuing, then the
applicable trustee or the holders of not less than a majority of
the principal amount of the outstanding debt securities of that
series may declare the principal amount (or, if the debt securities
of that series are original issue discount securities or indexed
securities, such portion of the principal amounts may be specified
in the terms thereof) of all the debt securities of that series to
be due and payable immediately by written notice thereof to us (and
to the applicable trustee if given by the holders). However, at any
time after such a declaration of acceleration with respect to debt
securities of such series (or of all debt securities then
outstanding under any indenture, as the case may be) has been made,
but before a judgment or decree for payment of the money due has
been obtained by the applicable trustee, the holders of not less
than a majority in principal amount of outstanding debt securities
of such series (or of all debt securities then outstanding under
the applicable indenture, as the case may be) may rescind and annul
such declaration and its consequences if:
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we shall have deposited
with the applicable trustee all required payments of the principal
of (and premium, if any) and interest on the debt securities of
such series (or of all debt securities then outstanding under the
applicable indenture, as the case may be), plus certain fees,
expenses, disbursements and advances of the applicable trustee;
and |
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all events of default,
other than the non-payment of accelerated principal (or specified
portion thereof), with respect to debt securities of such series
(or of all debt securities then outstanding under the applicable
indenture, as the case may be) have been cured or waived as
provided in such indenture. |
If an event
of default relating to events of bankruptcy, insolvency or
reorganization of the Company occurs and is continuing, then the
principal amount of all of the debt securities outstanding, and any
accrued interest, will automatically become due and payable
immediately, without any declaration or other act by the trustee or
any holder.
Each
indenture also will provide that the holders of not less than a
majority in principal amount of the outstanding debt securities of
any series (or of all debt securities then outstanding under the
applicable indenture, as the case may be) may waive any past
default with respect to such series and its consequences, except a
default:
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in the payment of the
principal of (or premium, if any) or interest on any debt security
of such series; or |
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● |
in respect of a covenant
or provision contained in the applicable indenture that cannot be
modified or amended without the consent of the holder of each
outstanding debt security affected thereby. |
Each trustee
will be required to give notice to the holders of debt securities
within 90 days of a default under the applicable indenture unless
such default shall have been cured or waived; provided, however,
that such trustee may withhold notice to the holders of any series
of debt securities of any default with respect to such series
(except a default in the payment of the principal of (or premium,
if any) or interest on any debt security of such series or in the
payment of any sinking fund installment in respect of any debt
security of such series) if specified responsible officers of such
trustee consider such withholding to be in the interest of such
holders.
Each
indenture will provide that no holders of debt securities of any
series may institute any proceedings, judicial or otherwise, with
respect to such indenture or for any remedy thereunder, except in
the case of failure of the applicable trustee, for 60 days, to act
after it has received a written request to institute proceedings in
respect of an event of default from the holders of not less than
25% in principal amount of the outstanding debt securities of such
series, as well as an offer of indemnity reasonably satisfactory to
it. This provision will not prevent, however, any holder of debt
securities from instituting suit for the enforcement of payment of
the principal of (and premium, if any) and interest on such debt
securities at the respective due dates thereof.
Each
indenture provides that in case an event of default shall occur and
be known to any trustee and not be cured, the trustee must use the
same degree of care as a prudent person would use in the conduct of
his or her own affairs in the exercise of the trustee’s power.
Subject to provisions in each indenture relating to its duties in
case of default, no trustee will be under any obligation to
exercise any of its rights or powers under an indenture at the
request or direction of any holders of any series of debt
securities then outstanding under such indenture, unless such
holders shall have offered to the trustee thereunder reasonable
security or indemnity. The holders of not less than a majority in
principal amount of the outstanding debt securities of any series
(or of all debt securities then outstanding under an indenture, as
the case may be) shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to
the applicable trustee, or of exercising any trust or power
conferred upon such trustee. However, a trustee may refuse to
follow any direction which is in conflict with any law or the
applicable indenture, which may involve such trustee in personal
liability or which may be unduly prejudicial to the holders of debt
securities of such series not joining therein.
Within 120
days after the close of each fiscal year, we will be required to
deliver to each trustee a certificate, signed by one of several
specified officers, stating whether or not such officer has
knowledge of any default under the applicable indenture and, if so,
specifying each such default and the nature and status
thereof.
Modification of
the Indenture
Each
indenture provides that we and the trustee may enter into
supplemental indentures without the consent of the holders of debt
securities to:
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secure any debt securities; |
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evidence the assumption by a successor
corporation of our obligations; |
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add
covenants for the protection of the holders of debt
securities; |
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cure
any ambiguity or correct any inconsistency in the
indenture; |
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establish the forms or terms of debt securities
of any series; and |
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evidence and provide for the acceptance of
appointment by a successor trustee. |
It is
anticipated that modifications and amendments of an indenture may
be made by us and the trustee, with the consent of the holders of
not less than a majority in principal amount of each series of the
outstanding debt securities issued under the indenture that are
affected by the modification or amendment, provided that no such
modification or amendment may, without the consent of each holder
of such debt securities affected thereby:
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change the stated
maturity date of the principal of (or premium, if any) or any
installment of interest, if any, on any such debt
security; |
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● |
reduce the principal
amount of (or premium, if any) or the interest, if any, on any such
debt security or the principal amount due upon acceleration of an
original issue discount security; |
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● |
change the time or place
or currency of payment of principal of (or premium, if any) or
interest, if any, on any such debt security; |
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impair the right to
institute suit for the enforcement of any such payment on or with
respect to any such debt security; |
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● |
reduce any amount
payable on redemption; |
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● |
modify any of the
subordination provisions or the definition of senior indebtedness
applicable to any subordinated debt securities in a manner adverse
to the holders of those securities; |
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● |
reduce the above-stated
percentage of holders of debt securities necessary to modify or
amend the indenture; or |
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● |
modify the foregoing
requirements or reduce the percentage of outstanding debt
securities necessary to waive compliance with certain provisions of
the indenture or for waiver of certain defaults. |
A record
date may be set for any act of the holders with respect to
consenting to any amendment. The holders of not less than a
majority in principal amount of outstanding debt securities of each
series affected thereby will have the right to waive our compliance
with certain covenants in such indenture. Each indenture will
contain provisions for convening meetings of the holders of debt
securities of a series to take permitted action.
A prospectus
supplement may set forth modifications or additions to these
provisions with respect to a particular series of debt
securities.
Conversion or
Exchange Rights
A prospectus
supplement will describe the terms, if any, on which a series of
debt securities may be convertible into or exchangeable for our
common stock, preferred stock or other securities. These terms will
also include provisions as to whether conversion or exchange is
mandatory, at the option of the holder or at our option. Such
provisions will also include the conversion or exchange price (or
manner or calculation thereof), the conversion or exchange period,
the events requiring an adjustment of the conversion or exchange
price, and provisions affecting conversion or exchange in the event
of the redemption of such series of debt securities.
Registered Global
Securities
We may issue
the debt securities of a series in whole or in part in the form of
one or more fully registered global securities that we will deposit
with a depositary or with a nominee for a depositary identified in
the applicable prospectus supplement and registered in the name of
such depositary or nominee. In such case, we will issue one or more
registered global securities denominated in an amount equal to the
aggregate principal amount of all of the debt securities of the
series to be issued and represented by such registered global
security or securities.
Unless and
until it is exchanged in whole or in part for debt securities in
definitive registered form, a registered global security may not be
transferred except as a whole:
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● |
by
the depositary for such registered global security to its
nominee; |
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● |
by a
nominee of the depositary to the depositary or another nominee of
the depositary; or |
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by
the depositary or its nominee to a successor of the depositary or a
nominee of the successor. |
The
prospectus supplement relating to a series of debt securities will
describe the specific terms of the depositary arrangement with
respect to any portion of such series represented by a registered
global security. We anticipate that the following provisions will
apply to all depositary arrangements for debt
securities:
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● |
ownership of beneficial interests in a registered
global security will be limited to persons that have accounts with
the depositary for the registered global security, those persons
being referred to as “participants,” or persons that may hold
interests through participants; |
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upon
the issuance of a registered global security, the depositary for
the registered global security will credit, on its book-entry
registration and transfer system, the participants’ accounts with
the respective principal amounts of the debt securities represented
by the registered global security beneficially owned by the
participants; |
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● |
any
dealers, underwriters, or agents participating in the distribution
of the debt securities will designate the accounts to be credited;
and |
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● |
ownership of any beneficial interest in the
registered global security will be shown on, and the transfer of
any ownership interest will be effected only through, records
maintained by the depositary for the registered global security
(with respect to interests of participants) and on the records of
participants (with respect to interests of persons holding through
participants). |
The laws of
some states may require that certain purchasers of securities take
physical delivery of the securities in definitive form. These laws
may limit the ability of those persons to own, transfer or pledge
beneficial interests in registered global securities.
So long as
the depositary for a registered global security, or its nominee, is
the registered owner of the registered global security, the
depositary or the nominee, as the case may be, will be considered
the sole owner or holder of the debt securities represented by the
registered global security for all purposes under the indenture.
Except as set forth below, owners of beneficial interests in a
registered global security:
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will
not be entitled to have the debt securities represented by a
registered global security registered in their names; |
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will
not receive or be entitled to receive physical delivery of the debt
securities in the definitive form; and |
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will
not be considered the owners or holders of the debt securities
under the indenture. |
Accordingly,
each person owning a beneficial interest in a registered global
security must rely on the procedures of the depositary for the
registered global security and, if the person is not a participant,
on the procedures of a participant through which the person owns
its interest, to exercise any rights of a holder under the
indenture.
We
understand that under existing industry practices, if we request
any action of holders or if an owner of a beneficial interest in a
registered global security desires to give or take any action that
a holder is entitled to give or take under the indenture, the
depositary for the registered global security would authorize the
participants holding the relevant beneficial interests to give or
take the action, and those participants would authorize beneficial
owners owning through those participants to give or take the action
or would otherwise act upon the instructions of beneficial owners
holding through them.
We will make
payments of principal and premium, if any, and interest, if any, on
debt securities represented by a registered global security
registered in the name of a depositary or its nominee to the
depositary or its nominee, as the case may be, as the registered
owners of the registered global security. None of the Company, the
trustee or any other agent of the Company or the trustee will be
responsible or liable for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in the
registered global security or for maintaining, supervising or
reviewing any records relating to the beneficial ownership
interests.
We expect
that the depositary for any debt securities represented by a
registered global security, upon receipt of any payments of
principal and premium, if any, and interest, if any, in respect of
the registered global security, will immediately credit
participants’ accounts with payments in amounts proportionate to
their respective beneficial interests in the registered global
security as shown on the records of the depositary. We also expect
that standing customer instructions and customary practices will
govern payments by participants to owners of beneficial interests
in the registered global security held through the participants, as
is now the case with the securities held for the accounts of
customers in bearer form or registered in “street name.” We also
expect that any of these payments will be the responsibility of the
participants.
If the
depositary for any debt securities represented by a registered
global security is at any time unwilling or unable to continue as
depositary or ceases to be a clearing agency registered under the
Exchange Act, we will appoint an eligible successor depositary. If
we fail to appoint an eligible successor depositary within 90 days,
we will issue the debt securities in definitive form in exchange
for the registered global security. In addition, we may at any time
and in our sole discretion decide not to have any of the debt
securities of a series represented by one or more registered global
securities. In such event, we will issue debt securities of that
series in a definitive form in exchange for all of the registered
global securities representing the debt securities. The trustee
will register any debt securities issued in definitive form in
exchange for a registered global security in such name or names as
the depositary, based upon instructions from its participants,
shall instruct the trustee.
We may also
issue bearer debt securities of a series in the form of one or more
global securities, referred to as “bearer global securities.” We
will deposit these bearer global securities with a common
depositary for Euroclear System and Clearstream Banking Luxembourg,
Société Anonyme, or with a nominee for the depositary identified in
the prospectus supplement relating to that series. The prospectus
supplement relating to a series of debt securities represented by a
bearer global security will describe the specific terms and
procedures, including the specific terms of the depositary
arrangement and any specific procedures for the issuance of debt
securities in definitive form in exchange for a bearer global
security, with respect to the position of the series represented by
a bearer global security.
Discharge,
Defeasance and Covenant Defeasance
We can
discharge or defease our obligations under the indenture as set
forth below. Unless otherwise set forth in the applicable
prospectus supplement, the subordination provisions applicable to
any subordinated debt securities will be expressly subject to the
discharge and defeasance provisions of the indenture.
We may
discharge some of our obligations to holders of any series of debt
securities that have not already been delivered to the trustee for
cancellation and that have either become due and payable or are by
their terms to become due and payable within one year (or are
scheduled for redemption within one year). We may effect a
discharge by irrevocably depositing with the trustee cash or U.S.
government obligations, as trust funds, in an amount certified to
be sufficient to pay when due, whether at maturity, upon redemption
or otherwise, the principal of, premium, if any, and interest on
the debt securities and any mandatory sinking fund
payments.
Unless
otherwise provided in the applicable prospectus supplement, we may
also discharge any and all of our obligations to holders of any
series of debt securities at any time (“defeasance”). We also may
be released from the obligations imposed by any covenants of any
outstanding series of debt securities and provisions of the
indenture, and we may omit to comply with those covenants without
creating an event of default (“covenant defeasance”). We may effect
defeasance and covenant defeasance only if, among other
things:
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we
irrevocably deposit with the trustee cash or U.S. government
obligations, as trust funds, in an amount certified to be
sufficient to pay at maturity (or upon redemption) the principal,
premium, if any, and interest on all outstanding debt securities of
the series; and |
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we
deliver to the trustee an opinion of counsel from a nationally
recognized law firm to the effect that the holders of the series of
debt securities will not recognize income, gain or loss for U.S.
federal income tax purposes as a result of the defeasance or
covenant defeasance and that defeasance or covenant defeasance will
not otherwise alter the holders’ U.S. federal income tax treatment
of principal, premium, if any, and interest payments on the series
of debt securities, which opinion, in the case of legal defeasance,
must be based on a ruling of the Internal Revenue Service issued,
or a change in U.S. federal income tax law. |
Although we
may discharge or defease our obligations under the indenture as
described in the two preceding paragraphs, we may not avoid, among
other things, our duty to register the transfer or exchange of any
series of debt securities, to replace any temporary, mutilated,
destroyed, lost or stolen series of debt securities or to maintain
an office or agency in respect of any series of debt
securities.
Redemption of
Securities
Debt
securities may also be subject to optional or mandatory redemption
on terms and conditions described in the applicable prospectus
supplement.
From and
after notice has been given as provided in the applicable
indenture, if funds for the redemption of any debt securities
called for redemption shall have been made available on such
redemption date, such debt securities will cease to bear interest
on the date fixed for such redemption specified in such notice, and
the only right of the holders of the debt securities will be to
receive payment of the redemption price.
Notices
Holders of
our debt securities will receive notices by mail at their addresses
as they appear in the security register.
Title
We may treat
the person in whose name a debt security is registered on the
applicable record date as the owner of the debt security for all
purposes, whether or not it is overdue.
Governing
Law
Unless
otherwise set forth in the applicable prospectus supplement, New
York law will govern the indentures and the debt securities,
without regard to its conflicts of law principles.
Concerning the
Trustee
Each
indenture provides that there may be more than one trustee under
the indenture, each with respect to one or more series of debt
securities. If there are different trustees for different series of
debt securities, each trustee will be a trustee of a trust under
the indenture separate and apart from the trust administered by any
other trustee under the indenture. Except as otherwise indicated in
this prospectus or any prospectus supplement, any action permitted
to be taken by a trustee may be taken by such trustee only with
respect to the one or more series of debt securities for which it
is the trustee under the indenture. Any trustee under the indenture
may resign or be removed with respect to one or more series of debt
securities. All payments of principal of, premium, if any, and
interest on, and all registration, transfer, exchange,
authentication and delivery (including authentication and delivery
on original issuance of the debt securities) of, the debt
securities of a series will be effected by the trustee with respect
to that series at an office designated by the trustee in New York,
New York.
Each
indenture contains limitations on the right of the trustee, should
it become a creditor of the Company, to obtain payment of claims in
some cases or to realize on certain property received in respect of
any such claim as security or otherwise. The trustee may engage in
other transactions. If it acquires any conflicting interest
relating to any duties with respect to the debt securities,
however, it must eliminate the conflict or resign as
trustee.
Warrants
We may issue
warrants for the purchase of debt securities, preferred stock,
common stock, or any combination thereof. We may issue warrants
independently or together with any other securities offered by any
prospectus supplement and may be attached to or separate from the
other offered securities. Each series of warrants will be issued
under a separate warrant agreement to be entered into by us with a
warrant agent. The warrant agent will act solely as our agent in
connection with the warrants and will not assume any obligation or
relationship of agency or trust for or with any holders or
beneficial owners of warrants. Further terms of the warrants and
the applicable warrant agreements will be set forth in the
applicable prospectus supplement.
The
applicable prospectus supplement relating to any particular issue
of warrants will describe the terms of the warrants, including, as
applicable, the following:
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the
title of the warrants; |
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the
aggregate number of the warrants; |
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the
price or prices at which the warrants will be issued; |
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the
designation, terms and number of shares of preferred stock or
common stock or principal amount of debt securities purchasable
upon exercise of the warrants; |
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the
designation and terms of the offered securities, if any, with which
the warrants are issued and the number of the warrants issued with
each offered security; |
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the
date, if any, on and after which the warrants and the related debt
securities, preferred stock or common stock will be separately
transferable; |
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the
price at which each share of preferred stock, common stock or
underlying debt securities purchasable upon exercise of the
warrants may be purchased or the manner of determining such
price; |
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the
date on which the right to exercise the warrants shall commence and
the date on which that right shall expire; |
| |
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the
minimum or maximum amount of the warrants which may be exercised at
any one time; |
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information with respect to book-entry
procedures, if any; |
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a
discussion of certain federal income tax considerations;
and |
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any
other material terms of the warrants, including terms, procedures
and limitations relating to the exchange and exercise of the
warrants. |
We and the
warrant agent may amend or supplement the warrant agreement for a
series of warrants without the consent of the holders of the
warrants issued thereunder to effect changes that are not
inconsistent with the provisions of the warrants and that do not
materially and adversely affect the interests of the holders of the
warrants.
Units
We may issue
units comprising one or more securities described in this
prospectus in any combination. The following description sets forth
certain general terms and provisions of the units that we may offer
pursuant to this prospectus. The particular terms of the units and
the extent, if any, to which the general terms and provisions may
apply to the units so offered will be described in the applicable
prospectus supplement.
Each unit
will be issued so that the holder of the unit also is the holder of
each security included in the unit. Thus, the unit will have the
rights and obligations of a holder of each included security. Units
will be issued pursuant to the terms of a unit agreement, which may
provide that the securities included in the unit may not be held or
transferred separately at any time or at any time before a
specified date. A copy of the forms of the unit agreement and the
unit certificate relating to any particular issue of units will be
filed with the SEC each time we issue units, and you should read
those documents for provisions that may be important to you. For
more information on how you can obtain copies of the forms of the
unit agreement and the related unit certificate, see “Where You Can
Find More Information.”
The
prospectus supplement relating to any particular issuance of units
will describe the terms of those units, including, to the extent
applicable, the following:
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the designation and
terms of the units and the securities comprising the units,
including whether and under what circumstances those securities may
be held or transferred separately; |
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● |
any provision for the
issuance, payment, settlement, transfer or exchange of the units or
of the securities comprising the units; and |
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whether the units will
be issued in fully registered or global form. |
USE OF
PROCEEDS
We currently
intend to use the net proceeds from the sale of our securities for
general corporate purposes unless otherwise indicated in the
applicable prospectus supplement. General corporate purposes may
include, among other items, sales and marketing expenditures,
research and development, regulatory activities, acquisitions of
companies, products, intellectual property or other technology,
investments and capital expenditures. As a result, our management
will have significant discretion and flexibility in applying the
net proceeds from the sale of these securities. Pending any use, as
described above, we intend to invest the net proceeds in
high-quality, short-term, interest-bearing securities. We will set
forth in the applicable prospectus supplement or free writing
prospectus our intended use for the net proceeds received from the
sale of any securities sold pursuant to the prospectus supplement
or free writing prospectus.
DIVIDEND
POLICY
We have not
declared or paid cash dividends on our common stock since our
inception. We currently intend to retain all available funds and
any future earnings for use in the operation of our business and do
not anticipate paying any cash dividends in the foreseeable future.
Any future determination related to our dividend policy will be
made at the discretion of our board of directors and will depend
on, among other factors, our results of operations, financial
condition, capital requirements, contractual restrictions, business
prospects and other factors our board of directors may deem
relevant. Consequently, stockholders will need to sell our
securities to realize a return on their investment, if
any.
PLAN OF
DISTRIBUTION
We may sell the securities from time
to time pursuant to underwritten public offerings, negotiated
transactions, block trades or a combination of these methods. We
may sell the securities to or through underwriters or dealers,
through agents, or directly to one or more purchasers. We may
distribute securities from time to time in one or more
transactions:
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at a
fixed price or prices, which may be changed; |
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at
market prices prevailing at the time of sale; |
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at
prices related to such prevailing market prices; or |
We may also sell equity securities
covered by this registration statement in an “at the market
offering” as defined in Rule 415 under the Securities Act of 1933,
as amended (the “Securities Act”). Such offering may be made into
an existing trading market for such securities in transactions at
other than a fixed price, either:
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on or
through the facilities of The Nasdaq Capital Market or any other
securities exchange or quotation or trading service on which such
securities may be listed, quoted or traded at the time of sale;
and/or |
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to or
through a market maker otherwise than on The Nasdaq Capital Market
or such other securities exchanges or quotation or trading
services. |
Such at-the-market offerings, if any,
may be conducted by underwriters acting as principal or
agent.
A prospectus supplement or
supplements (and any related free writing prospectus that we may
authorize to be provided to you) will describe the terms of the
offering of the securities, including, to the extent
applicable:
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the
name or names of any underwriters, dealers or agents, if
any; |
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the
purchase price of the securities and the proceeds we will receive
from the sale; |
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any
over-allotment options under which underwriters may purchase
additional securities from us; |
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any
agency fees or underwriting discounts and other items constituting
agents’ or underwriters’ compensation; |
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any
public offering price; |
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any
discounts or concessions allowed or reallowed or paid to dealers;
and |
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any
securities exchange or market on which the securities may be
listed. |
Only underwriters named in the
prospectus supplement are underwriters of the securities offered by
the prospectus supplement.
If underwriters are used in the sale,
they will acquire the securities for their own account and may
resell the securities from time to time in one or more transactions
at a fixed public offering price or at varying prices determined at
the time of sale. The obligations of the underwriters to purchase
the securities will be subject to the conditions set forth in the
applicable underwriting agreement. We may offer the securities to
the public through underwriting syndicates represented by managing
underwriters or by underwriters without a syndicate. Subject to
certain conditions, the underwriters will be obligated to purchase
all of the securities offered by the prospectus supplement. Any
public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may change from time to time. We may
use underwriters with whom we have a material relationship. We will
describe in the prospectus supplement, naming the underwriter, the
nature of any such relationship.
We may sell securities directly or
through agents we designate from time to time. We will name any
agent involved in the offering and sale of securities, and we will
describe any commissions we will pay the agent in the prospectus
supplement. Unless the prospectus supplement states otherwise, our
agent will act on a best-efforts basis for the period of its
appointment.
We may authorize agents or
underwriters to solicit offers by certain types of institutional
investors to purchase securities from us at the public offering
price set forth in the prospectus supplement pursuant to delayed
delivery contracts providing for payment and delivery on a
specified date in the future. We will describe the conditions to
these contracts and the commissions we must pay for solicitation of
these contracts in the prospectus supplement.
We may provide agents and
underwriters with indemnification against civil liabilities related
to this offering, including liabilities under the Securities Act,
or contribution with respect to payments that the agents or
underwriters may make with respect to these liabilities. Agents and
underwriters may engage in transactions with, or perform services
for, us in the ordinary course of business.
All securities we offer, other than
common stock, will be new issues of securities with no established
trading market. Any underwriters may make a market in these
securities, but will not be obligated to do so and may discontinue
any market making at any time without notice. We cannot guarantee
the liquidity of the trading markets for any securities.
Any underwriter may engage in
overallotment, stabilizing transactions, short covering
transactions and penalty bids. Overallotment involves sales in
excess of the offering size, which create a short position.
Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified
maximum. Short covering transactions involve purchases of the
securities in the open market after the distribution is completed
to cover short positions. Penalty bids permit the underwriters to
reclaim a selling concession from a dealer when the securities
originally sold by the dealer are purchased in a stabilizing or
covering transaction to cover short positions. Those activities may
cause the price of the securities to be higher than it would
otherwise be. If commenced, the underwriters may discontinue any of
the activities at any time. These transactions may be effected on
any exchange or over-the-counter market or otherwise.
Any underwriters who are qualified
market makers on The Nasdaq Capital Market may engage in passive
market making transactions in the securities on The Nasdaq Capital
Market in accordance with Rule 103 of Regulation M, during the
business day prior to the pricing of the offering, before the
commencement of offers or sales of the securities. Passive market
makers must comply with applicable volume and price limitations and
must be identified as passive market makers. In general, a passive
market maker must display its bid at a price not in excess of the
highest independent bid for such security; if all independent bids
are lowered below the passive market maker’s bid, however, the
passive market maker’s bid must then be lowered when certain
purchase limits are exceeded. Passive market making may stabilize
the market price of the securities at a level above that which
might otherwise prevail in the open market and, if commenced, may
be discontinued at any time.
LEGAL
MATTERS
The validity
of the securities being offered hereby will be passed upon by
Nelson Mullins Riley & Scarborough LLP, Washington,
D.C.
EXPERTS
The audited
financial statements incorporated by reference in this prospectus
and elsewhere in the registration statement have been so
incorporated by reference in reliance upon the reports of
dbbmckennon, independent registered public accountants, upon the
authority of said firm as experts in accounting and
auditing.
WHERE YOU CAN
FIND MORE INFORMATION
We have
filed with the SEC a registration statement on Form S-3 under the
Securities Act with respect to the securities offered by this
prospectus. This prospectus, which is part of the registration
statement, omits certain information, exhibits, schedules and
undertakings set forth in the registration statement. For further
information pertaining to us and the securities offered in this
prospectus, reference is made to that registration statement and
the exhibits and schedules to the registration statement.
Statements contained in this prospectus as to the contents or
provisions of any documents referred to in this prospectus are not
necessarily complete, and in each instance where a copy of the
document has been filed as an exhibit to the registration
statement, reference is made to the exhibit for a more complete
description of the matters involved.
We file
annual, quarterly and current reports, proxy statements and other
information with the SEC. Our SEC filings are available to the
public over the Internet on the SEC’s website at www.sec.gov. Our
common stock is listed on The Nasdaq Capital Market under the
symbol “APCX.” General information about our Company, including our
Annual Report on Form 10-K, Quarterly Report on Form 10-Q and
Current Reports on Form 8-K, as well as any amendments and exhibits
to those reports, are available free of charge through our website
at www.apptechcorp.com as soon as reasonably practicable after we
file them with, or furnish them to, the SEC. Information on, or
than can be accessed through, our website is not incorporated into
this prospectus or other securities filings and is not a part of
these filings.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The SEC
allows us to “incorporate by reference” information into this
prospectus, which means that we can disclose important information
to you by referring you to another document filed separately with
the SEC. Because we are incorporating by reference future filings
with the SEC, this prospectus and the accompanying prospectus
supplement are continually updated and those future filings may
modify or supersede some of the information included or
incorporated by reference in this prospectus and the accompanying
prospectus supplement. This means that you must look at all of the
SEC filings that we incorporate by reference to determine if any of
the statements in this prospectus, the accompanying prospectus
supplement or in any document previously incorporated by reference
have been modified or superseded. Our periodic reports are filed
with the SEC under SEC File Number 0001070050.
We hereby
incorporate by reference the following documents:
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our
Annual Report on Form 10-K for the year ended December 31, 2021
filed with the SEC on March 31, 2022; |
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|
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our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2022
filed with the SEC on May 10, 2022; |
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|
|
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those
portions of our Definitive Proxy Statement on Schedule 14A for our
2022 Annual Meeting of Stockholders filed with the SEC on
March 22, 2022 that
are incorporated by reference into our Annual Report on Form 10-K
for the year ended December 31, 2021; |
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|
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our
Current Reports on Form 8-K filed with the SEC on January 5, 2022,
January 10, 2022, February 22, 2022, April 21, 2022, May 6, 2022
and May 27, 2022, in each case only to the extent filed and not
furnished; and |
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the
description of our common stock contained in our registration
statement on Form 8-A (File No. 001-39158) filed under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) on
December 20, 2021, including any amendment or reports filed for the
purpose of updating such descriptions. |
In addition,
all documents we subsequently file with the SEC pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, until the
offering of the securities offered hereby is terminated or
completed, shall be deemed to be incorporated by reference in this
prospectus.
Unless
specifically stated to the contrary, none of the information that
we disclose under Items 2.02 or 7.01 of any Current Report on Form
8-K that we may from time to time furnish to the SEC will be
incorporated by reference into, or otherwise included in, this
prospectus.
Any
statement contained in a document incorporated or deemed to be
incorporated by reference into this prospectus will be deemed to be
modified or superseded for purposes of this prospectus to the
extent that a statement contained in this prospectus or any other
subsequently filed document that is deemed to be incorporated by
reference into this prospectus modifies or supersedes the
statement. Any statement so modified or superseded will not be
deemed, except as so modified or superseded, to constitute a part
of this prospectus.
We will
provide each person to whom a prospectus is delivered a copy of all
of the information that has been incorporated by reference in this
prospectus but not delivered with the prospectus. You may obtain
copies of these filings, at no cost, through the “Investors”
section of our website (www.apptechcorp.com) and you may request a
copy of these filings (other than an exhibit to any filing unless
we have specifically incorporated that exhibit by reference into
the filing), at no cost, by writing or telephoning us at the
following address:
Corporate
Secretary
AppTech
Payments Corp.
5876 Owens
Avenue, Suite 100
Carlsbad,
California 92008
(760)
707-5959
1,666,667 Shares of Common
Stock
PROSPECTUS
SUPPLEMENT
Sole Placement
Agent
EF HUTTON,
division of Benchmark
Investments, LLC
January 30, 2023
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