APPYEA, INC Annual Report - How They Did This Year

I’ve put together this guide to help you make sense of APPYEA, INC’s latest annual report. My goal is to cut through the corporate jargon so you can decide if this business fits your portfolio.

1. What does this company do?

APPYEA, INC provides technology for the lottery and gaming industry. They act as the "plumbing" for digital lotteries, building software that uses blockchain to make draws transparent. Following the acquisition of "Techlott" in early 2025, the company issued a significant amount of new stock to fund the transition, shifting the company’s strategic direction toward this new technology.

2. How are they making money?

The company is in the early stages of commercialization. In 2025, they generated $8,000 in revenue, down from $29,000 in 2024. After accounting for the costs of delivering their product, they ended the year with a gross loss of $15,000. They have not yet reached the scale required to cover basic server and maintenance expenses.

3. Major wins and challenges

The company has undergone a leadership transition that has significantly impacted its financial structure:

• Exploding Costs: Administrative expenses rose from $1.1 million in 2024 to $16.7 million in 2025, largely driven by stock-based compensation and consulting agreements.
• Executive Compensation: Current leadership receives $30,000 per month in consulting fees. Additionally, their contracts include "golden parachute" clauses that trigger a $1.08 million payout per person if they are terminated without cause.
• Ownership Concentration: Through the Techlott acquisition and subsequent stock grants, the management team holds a majority of the voting power, which limits the influence of public shareholders.

4. Financial health

This is a high-risk financial profile. The company reported a $15.1 million loss for 2025, compared to a $4 million loss in 2024. While they hold $408,000 in cash, their monthly burn rate exceeds $1.3 million. Furthermore, they carry a $7.1 million liability for "anti-dilution" rights, which mandates the issuance of additional shares to insiders if the company raises new capital.

5. Key risks

• "Going Concern" Warning: Auditors have raised concerns regarding the company’s ability to continue as a going concern, noting that current cash reserves are insufficient to fund operations for the next 12 months.
• Anti-Dilution Protection: Insiders are entitled to additional shares if the company raises capital, which will further dilute the ownership percentage of existing retail investors.
• Governance: The board lacks independent members, meaning there are limited checks on management’s decisions or compensation packages.
• Control: Insiders hold "Series B" stock with superior voting rights, preventing retail investors from influencing major corporate decisions.

6. Future outlook

The company is currently focused on the adoption of its new lottery software. However, the existing financial structure creates a challenging environment for outside investors. Given the current cash burn and the anti-dilution protections that favor insiders, the company will likely need to raise additional capital soon, which would further reduce the value of current shares. This is a highly speculative, "all-or-nothing" investment.

Final Thought for Investors: Before considering an investment, weigh the potential of their blockchain lottery technology against the significant risks of dilution, high executive pay, and the company's current inability to sustain its own operations. Given the "going concern" warning and the concentration of control, this opportunity carries a high degree of risk.