OLB GROUP INC

Previous wording

On July 23, 2021, we formed DMINT, Inc., a wholly owned subsidiary (“DMINT”) to operate in the Bitcoin mining industry, specifically the mining of Bitcoin. DMINT initiated the first phase of the Bitcoin mining operation by placing data centers and ASIC-based Antminer S19J Pro mining computers specifically configured to mine Bitcoin in Pennsylvania. As of December 31, 2022, DMINT had purchased 1,000 computers. In February 2023, it re-deployed all of the computers to its Selmer, Tennessee location. At December 31, 2023, DMINT had mined 31.06 Bitcoin.

Current wording

On July 23, 2021, we formed DMINT, Inc., a wholly owned subsidiary (“DMINT”) to operate in the Bitcoin mining industry, specifically the mining of Bitcoin. DMINT initiated the first phase of the Bitcoin mining operation by placing data centers and ASIC-based Antminer S19J Pro mining computers specifically configured to mine Bitcoin in Pennsylvania. As of December 31, 2022, DMINT had purchased 1,000 computers. In February 2023, it re-deployed all of the computers to its Selmer, Tennessee location. At September 30, 2024, DMINT had mined 31.06 Bitcoin. On October 21, 2024, DMINT filed a Registration Statement on Form S-1 with the Securities and Exchange Commission (the "SEC"), relating to the proposed spinoff from the Company and resulting issuance of equity of DMINT to OLB shareholders.

Previous wording

On June 15, 2023, the Company acquired 80.01% of the membership interests of Cuentas SDI, LLC, a Florida limited liability company (“SDI”). SDI will enable the Company to focus on marketing to the underbanked communities utilizing the SDI debit and calling card platform’s ability for users to reload cash to their account and provide instant access to digital products to their customers’ Mobile App and digital wallet into its electronic portal. The Company plans to market to the SDI merchant network, which currently has approximately 31,600 locations in the United States, the ability of having one POS system that will allow the retail customer to purchase products using OLB’s payment processing solutions along with the ability to reload payment cards and their mobile phone minutes.

Current wording

On June 15, 2023, the Company entered into a Membership Interest Purchase Agreement (the “Agreement”) with SDI Black 001, LLC (“Seller”) whereby it acquired 80.01% of the membership interests of Moola Cloud, LLC, a Florida limited liability company (formerly Cuentas SDI, LLC, the “LLC”).. The LLC will enable the Company to focus on marketing to the underbanked communities utilizing the LLC’s debit and calling card platform’s ability for users to reload cash to their account and provide instant access to digital products to their customers’ Mobile App and digital wallet into its electronic portal. The Company plans to market to the LLC’s merchant network, which currently has approximately 31,600 locations in the United States, the ability of having one POS system that will allow the retail customer to purchase products using OLB’s payment processing solutions along with the ability to reload payment cards and their mobile phone minutes.

Previous wording

On May 20, 2024, the Company entered into a Membership Interest Purchase Agreement (the “Agreement”) dated as of May 20, 2024 with Cuentas, Inc. (“Seller”) whereby it acquired the remaining 19.99% of the membership interests of SDI for a purchase price of $215,500. As a result, effective May 20, 2024 the Company owns 100% of SDI.

Current wording

On May 20, 2024, the Company entered into a Membership Interest Purchase Agreement (the “Agreement”) dated as of May 20, 2024 with the minority member of the LLC whereby it acquired the remaining 19.99% of the membership interests of the LLC for a purchase price of $215,500. As a result, effective May 20, 2024, the Company owns 100% of the LLC. On August 14, 2024, the LLC changed its name to Moola Cloud, LLC.

Previous wording

Management’s discussion and analysis of financial condition and results of operations (“MD&A”) includes a discussion of the consolidated results from operations of The OLB Group, Inc. and its subsidiaries for the three and six months ended June 30, 2024 and 2023.

Current wording

Management’s discussion and analysis of financial condition and results of operations (“MD&A”) includes a discussion of the consolidated results from operations of The OLB Group, Inc. and its subsidiaries for the three and nine months ended September 30, 2024 and 2023.

Previous wording

For the three months ended June 30, 2024, we had total revenue of $3,521,154 compared to $8,344,012 of revenue for the three months ended June 30, 2023, a decrease of $4,822,858 or 57.8%. For the three months ended June 30, 2024, we earned $2,484,193 in transaction and processing fees, $27,940 in merchant equipment rental and sales, $145,026 in other revenue from monthly recurring subscriptions, $52,319 of revenue from the Bitcoin Mining segment and $811,676 of revenue from the sale of digital products. For the three months ended June 30, 2023, we earned $7,755,248 in transaction and processing fees, $22,519 in merchant equipment rental and sales, $71,268 in other revenue from monthly recurring subscriptions, $137,541 of revenue from the Cryptocurrency Mining segment and $357,436 of revenue from the sale of digital products. The decrease in revenue was a result of the loss of the CBD portfolio. Processing and servicing costs decreased by $2,417,996 or 44.9%, from $5,390,675 in the prior period to $2,972,679.

Current wording

For the three months ended September 30, 2024, we had total revenue of $3,083,922 compared to $9,694,440 of revenue for the three months ended September 30, 2023, a decrease of $6,610,518 or 68.2%. We earned $2,569,596 in transaction and processing fees, $16,120 in merchant equipment rental and sales, $43,349 in other revenue from monthly recurring subscriptions, $88,078 of revenue from the Cryptocurrency Mining segment and $366,779 of revenue from the sale of digital products. For the three months ended September 30, 2023, we earned $8,331,185 in transaction and processing fees, $21,160 in merchant equipment rental and sales, $147,068 in other revenue from monthly recurring subscriptions, $95,667 of revenue from the Cryptocurrency Mining segment and $1,099,360 of revenue from the sale of digital products. The decrease in revenue was mainly a result of the loss of the CBD portfolio. Processing and servicing costs decreased by $3,842,149 or 59.6%, from $6,446,563 in the prior period to $2,604,414.

Previous wording

Amortization expense for the three months ended June 30, 2024, was $117,847 compared to $899,831 for the three months ended June 30, 2023 a decrease of $781,984 or 86.9%. We record amortization expense on our merchant portfolio, trademarks and natural gas purchase rights. The decrease in the current period is due to the write off of the CBD portfolio as of December 31, 2023, therefore no amortization was recorded for the asset during the three months ended June 30, 2024. Depreciation expense for cryptocurrency mining equipment for the three months ended June 30, 2024 was $843,671 compared to $799,716 for the three months ended June 30, 2023, an increase of $43,955 or 5.5%. Our depreciation expense increase is due to adjustments made in 2023 to depreciating the mining equipment.

Current wording

Amortization and depreciation expense for the three months ended September 30, 2024, was $112,499 compared to $933,053 for the three months ended September 30, 2023, a decrease of $820,554 or 87.9%. We record amortization expense on our merchant portfolio, trademarks and natural gas purchase rights. The decrease in the current period is due to the write off of the CBD portfolio as of December 31, 2023, therefore no amortization was recorded for the asset during the three months ended September 30, 2024. Depreciation expense for our Cryptocurrency Mining segment for the three months ended September 30, 2024, was $656,017 compared to $877,521 for the three months ended September 30, 2023, a decrease of $221,504 or 25.2%. We had a decrease of our amortization expense in the current period due to assets being fully amortized during the second quarter of 2024.

Previous wording

Salary and wage expense for the three months ended June 30, 2024, was $689,198 compared to $692,480 for the three months ended June 30, 2023, a decrease of $3,282 or 0.5%. an immaterial change period over period.

Current wording

Salary and wage expense for the three months ended September 30, 2024, was $604,784 compared to $687,456 for the three months ended September 30, 2023, a decrease of $82,672 or 12%. The decrease to our salary and wage expense is due to reduction in head count.

Previous wording

Our net loss for the three months ended June 30, 2024, was $2,648,012 compared to $589,543 for the three months ended June 30, 2023. This was a decrease in our net loss of $2,058,469 for the reasons discussed above.

Current wording

Our net loss for the three months ended September 30, 2024, was $1,630,258 compared to $1,884,850 for the three months ended September 30, 2023. This was a decrease in our net loss of $254,592 for the reasons discussed above.

Previous wording

Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023

Current wording

Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023

Previous wording

For the six months ended June 30, 2024, we had total revenue of $7,017,336 compared to $14,966,601 of revenue for the six months ended June 30, 2023, a decrease of $7,949,265 or 53.1%. For the six months ended June 30, 2024, we earned $4,772,402 in transaction and processing fees, $48,123 in merchant equipment rental and sales, $253,894 in other revenue from monthly recurring subscriptions, $263,936 of revenue from the Bitcoin Mining segment and $1,678,981 of revenue from the sale of digital products. For the six months ended June 30, 2023, we $14,108,719 in transaction and processing fees, $47,283 in merchant equipment rental and sales, $148,873 in other revenue from monthly recurring subscriptions, $304,290 of other revenue from the Cryptocurrency Mining segment and $357,436 of revenue from the sale of digital products. The decrease in revenue was a result of the loss of the CBD portfolio. Processing and servicing costs decreased by $4,741,837 or 45.3%, from $10,468,109 in the prior period to $5,726,272.

Current wording

For the nine months ended September 30, 2024, we had total revenue of $10,101,258 compared to $24,661,041 of revenue for the nine months ended September 30, 2023, a decrease of $14,559,783 or 59%. For the nine months ended September 30, 2024, we earned $7,341,998 in transaction and processing fees, $64,243 in merchant equipment rental and sales, $307,285 in other revenue from monthly recurring subscriptions, $341,972 of revenue from the Bitcoin Mining segment and $2,045,760 of revenue from the sale of digital products. During the nine months ended September 30, 2023, we earned $22,439,904 in transaction and processing fees, $68,443 in merchant equipment rental and sales, $295,941 in other revenue from monthly recurring subscriptions, $399,957 of other revenue from the Cryptocurrency Mining segment and $1,456,796 of revenue from the sale of digital products. The decrease in revenue was a result of the loss of the CBD portfolio. Processing and servicing costs decreased by $8,583,986 or 50.7%, from $16,914,672 in the prior period to $8,330,686.

Previous wording

Amortization expense for the six months ended June 30, 2024, was $308,808 compared to $1,799,662 for the six months ended June 30, 2023 a decrease of $1,490,854 or 82.8%. We record amortization expense on our merchant portfolio, trademarks and natural gas purchase rights. The decrease in the current period is due to the write off of the CBD portfolio as of December 31, 2023, therefore no amortization was recorded for the asset during the six months ended June 30, 2024. Depreciation expense for cryptocurrency mining equipment for the six months ended June 30, 2024 was $1,593,191 compared to $1,599,433 for the six months ended June 30, 2023, a decrease of only $6,242 or 0.4%.

Current wording

Amortization expense for the nine months ended September 30, 2024, was $421,307 compared to $2,732,715 for the nine months ended September 30, 2023 a decrease of $2,311,408 or 84.6%. We record amortization expense on our merchant portfolio, trademarks and natural gas purchase rights. The decrease in the current period is due to the write off of the CBD portfolio as of December 31, 2023, therefore no amortization was recorded for the asset during the nine months ended September 30, 2024. Depreciation expense for cryptocurrency mining equipment for the nine months ended September 30, 2024 was $2,249,208 compared to $2,476,954 for the nine months ended September 30, 2023, a decrease of $227,746 or 9.2%. We had a decrease of our amortization expense in the current period due to assets being fully amortized during the second quarter of 2024.

Previous wording

Salary and wage expense for the six months ended June 30, 2024, was $1,705,536 compared to $1,382,832 for the six months ended June 30, 2023, an increase of $322,705 or 23.3%. Salary and wage expenses have increased due to additional expense for Cuentas SDI, LLC employees.

Current wording

Salary and wage expense for the nine months ended September 30, 2024, was $2,310,320 compared to $2,070,288 for the nine months ended September 30, 2023, an increase of $240,032 or 11.6%. Salary and wage expenses have increased due to additional expense for Cuentas SDI, LLC employees.

Previous wording

Professional fees for the three months ended June 30, 2024, were $564,855 compared to $219,782 for the three months ended June 30, 2023, an increase of $345,073 or 157%. Professional fees consist mainly of audit and legal fees. The increase was due to increased litigation-related legal expenses and auditor and legal expenses relating to the preparation of a spin-off of DMINT during the 2024 period.

Current wording

Professional fees for the nine months ended September 30, 2024, were $1,666,970 compared to $1,297,026 for the nine months ended September 30, 2023, an increase of $369,944 or 28.5%. Professional fees consist mainly of audit and legal fees. The increase was due to increased litigation-related legal expenses and auditor and legal expenses relating to the preparation of a spin-off of DMINT during the 2024 period.

Previous wording

For the six months ended June 30, 2024, we had total other income of $454,018 from an unrealized gain on investment of $274,731, a $225,229 gain on the sale of bitcoin, and $45,942 of interest expense. For the six months ended June 30, 2023, we had total other expense of $171,078 from an unrealized loss on investment of $6,490, a $279,242 loss on the sale of bitcoin offset by other income of $114,654.

Current wording

For the nine months ended September 30, 2024, we had total other income of $454,018 from a realized gain on investment of $274,731, a $225,229 gain on the sale of bitcoin, and $45,942 of interest expense. For the nine months ended September 30, 2023, we had total other expense of $196,025 from an unrealized loss on investment of $31,437, a $279,242 loss on the sale of bitcoin offset by other income of $114,654.

Previous wording

Our net loss for the six months ended June 30, 2024, was $5,048,630 compared to $3,204,948 for the six months ended June 30, 2023. This was an increase in our net loss of $1,843,682 for the reasons discussed above.

Current wording

Our net loss for the nine months ended September 30, 2024, was $6,678,888 compared to $5,089,798 for the nine months ended September 30, 2023. This was an increase in our net loss of $1,589,090 for the reasons discussed above.

Previous wording

For the six months ended June 30, 2024, we used $1,210,224 of cash in operating activities, which included our net loss of $5,048,630 offset by $1,901,999 for amortization and depreciation expense, $338,750 for stock-based compensation, $225,229 gain on sale of bitcoin, $274,731 gain on investment and net changes in operating assets and liabilities of $2,097,617. For the six months ended June 30, 2023, we received $1,852,249 of cash from operating activities, which included our net loss of $3,204,948 plus our operating lease expense, net of repayment of $8,444 offset by $3,399,095 for amortization and depreciation expense, $132,788 for stock-based compensation, $279,242 from the loss on sale of cryptocurrency and net changes in operating assets and liabilities of $1,254,516.

Current wording

For the nine months ended September 30, 2024, we used $1,588,547 of cash in operating activities, which included our net loss of $6,678,888 offset by $2,670,515 for amortization and depreciation expense, $372,624 for stock-based compensation, $225,229 gain on sale of bitcoin, $274,731 gain on investment and net changes in operating assets and liabilities of $2,547,162. For the nine months ended September 30, 2023, we received $1,964,977 of cash from operating activities, which included our net loss of $5,089,798 plus our operating lease expense, net of repayment of $8,444 offset by $5,209,669 for amortization and depreciation expense, $161,605 for stock-based compensation, $279,242 from the loss on sale of cryptocurrency and net changes in operating assets and liabilities of $1,412,703.

Previous wording

For the six months ended June 30, 2024, we received $548,393 from the sale of investment and used $215,500 to purchase the remaining 19.99% interest in Cuentas SDI, LLC. For the six months ended June 30, 2023, we used $1,145,421 for the acquisition of property and equipment and $850,00 to purchase an 80.01% interest in Cuentas SDI, LLC. For six months ended June 30, 2023 we used $1,995,421 in investing activities as a result of the acquisition of property and equipment of $1,145,421 and the purchase of an 80.01% interest in Cuentas SDI, LLC for $850,000.

Current wording

For the nine months ended September 30, 2024, we received $548,393 from the sale of investment and used $215,500 to purchase the remaining 19.99% interest in the LLC. For the nine months ended September 30, 2023, we purchased property and equipment of $1,229,630 and used $850,000 for the purchase of an 80.01% interest in the LLC.

Previous wording

For the six months ended June 30, 2024, we received net cash of $751,590 in financing activities as a result of receiving $834,782 from our CEO, $9,775 from the sale of common stock, $6,840 in proceeds from exercise of options by related parties, and an increase in our cash overdraft of $30,559. We made repayments on our note payable of $130,406. For the six months ended June 30, 2023, we used net cash of $157,077 in financing activities as a result of a cash overdraft of $8,050 and payments on a note payable of $149,027.

Current wording

For the nine months ended September 30, 2024, we received net cash of $1,117,936 in financing activities as a result of receiving $1,191,282 from our CEO, $44,323 from the sale of common stock, $6,840 in proceeds from exercise of options by related parties, and an increase in our cash overdraft of $30,735. We made repayments on our note payable of $155,244. For the nine months ended September 30, 2023, we used net cash of $231,590 in financing activities as a result of a cash overdraft obtained in an acquisition of $8,050 and payments on a note payable of $223,540.

Previous wording

At June 30, 2024, the Company had cash of $53,265 and negative working capital of $7,729,939.

Current wording

At September 30, 2024, the Company had cash of $41,288 and negative working capital of $7,458,987.

Previous wording

On February 16, 2024, the Company entered into an Equity Distribution Agreement (the “Agreement”) with Maxim Group LLC (“Maxim”) to create an at-the-market equity program. Under the Agreement, the Company may offer and sell its common stock, par value $0.0001 per share, from time to time having an aggregate offering amount of up to $15,000,000 (the “Shares”) during the term of the Agreement through Maxim, as sales agent (the “ATM Offering”). The Company has agreed to pay Maxim a commission equal to 3.0% of the gross sales price from the sales of Shares pursuant to the Agreement. In addition, the Company has agreed to reimburse Maxim for its costs and out-of-pocket expenses incurred in connection with its services, including the fees and out-of-pocket expenses of its legal counsel. As of June 30, 2024, the ATM Offering has resulted in net proceeds of $9,775.

Current wording

On February 16, 2024, the Company entered into an Equity Distribution Agreement (the “Agreement”) with Maxim Group LLC (“Maxim”) to create an at-the-market equity program. Under the Agreement, the Company may offer and sell its common stock, par value $0.0001 per share, from time to time having an aggregate offering amount of up to $15,000,000 (the “Shares”) during the term of the Agreement through Maxim, as sales agent (the “ATM Offering”). The Company has agreed to pay Maxim a commission equal to 3.0% of the gross sales price from the sales of Shares pursuant to the Agreement. In addition, the Company has agreed to reimburse Maxim for its costs and out-of-pocket expenses incurred in connection with its services, including the fees and out-of-pocket expenses of its legal counsel. As of September 30, 2024, the ATM Offering has resulted in net proceeds of $44,323.

Previous wording

During the six months ended June 30, 2024, Mr. Yakov made payments on behalf of the company in the amount of $834,782. As of June 30, 2024, the Company owes Mr. Yakov $847,460. The amount is non-interest bearing and due on demand.

Current wording

During the nine months ended September 30, 2024, Mr. Yakov made payments on behalf of the company in the amount of $1,191,282. As of September 30, 2024, the Company owes Mr. Yakov $1,203,960.

Previous wording

The Company has reviewed its cash flow activity during 2023 and the first six months ended June 30, 2024 and projected cash flow forecast for the remainder of 2024. At June 30, 2024, the Company had cash of approximately $53,000, accounts receivable of approximately $118,000, and other prepaids and receivables of approximately $418,000. The Company has performed an overall analysis of market trends to determine whether or not it has sufficient liquidity to continue as a going concern for a period of at least twelve months from the date of this Annual Report. Management believes that its current available resources, along with funds to be received from the ATM Offering, creates sufficient liquidity in order to sustain operations for at least the twelve months following the filing of this Quarterly Report.

Current wording

The Company has reviewed its cash flow activity during 2023 and the first nine months ended September 30, 2024 and projected cash flow forecast for the remainder of 2024. At September 30, 2024, the Company had cash of approximately $41,000, accounts receivable of approximately $87,000, and other prepaids and receivables of approximately $506,000. The Company has performed an overall analysis of market trends to determine whether or not it has sufficient liquidity to continue as a going concern for a period of at least twelve months from the date of this Annual Report. Management believes that its current available resources, along with funds to be received from the ATM Offering and the the Yakov LLC Loan creates sufficient liquidity in order to sustain operations for at least the twelve months following the filing of this Quarterly Report.