OLB 10-K & 10-Q changes, risk factors and insider trading
Olb Group, Inc. · Nasdaq · Services-Business Services, Nec · CIK 1314196 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Limited transaction capacity and scaling issues may impact mining results”
New heading “We have recently adopted a digital asset treasury strategy with a focus on Bitcoin, and we may be unable to successfully implement this new strategy.”
New heading “If we are unable to successfully maintain our power arrangements on acceptable terms or at all or if we must otherwise relocate to replacement sites, our operations may be disrupted, and our business results may suffer.”
New heading “We depend on third parties to provide us with certain critical equipment and rely on components and raw materials that may be subject to price fluctuations or shortages, including ASIC chips that have been subject to an ongoing significant shortage.”
New heading “We may not be able to successfully implement or consummate our planned digital asset investment strategy.”
New heading “We are exposed to risk of nonperformance by counterparties, including our counterparties under our power arrangements.”
New heading “Bitcoin mining activities are energy-intensive, which may restrict the geographic locations of miners and have a negative environmental impact. Government regulators may potentially restrict the ability of electricity suppliers to provide electricity to mining operations, such as ours, or even fully or partially ban mining operations.”
New heading “The concentration of our holdings in Bitcoin could enhance the risks inherent in our Bitcoin treasury strategy.”
New heading “The availability of spot ETPs for Bitcoin and other digital assets may adversely affect the market price of our listed securities.”
New heading “Our business may be significantly impacted by reputational risks and may impact how our business is perceived by customers, counterparties, and regulators.”
New heading “Political or economic crises may motivate large-scale sales of Bitcoins, which could result in a reduction in value and adversely affect us.”
New heading “Macro-market events or perception of the Bitcoin industry in general could negatively impact our financial condition.”
New heading “We rely on computer hardware, purchased or leased, and software licensed from and services rendered by third parties in order to provide our solutions and run our business, sometimes by a single-source supplier.”
Removed heading “We may be subject to liabilities arising prior to the Asset Acquisition under certain “successor liability” theories.”
Removed heading “Our growth depends in part on the success of our strategic relationships with third parties.”
Removed heading “Banks and financial institutions may not provide banking services, or may cut off services, to businesses that provide cryptocurrency-related services or that accept cryptocurrencies as payment, including financial institutions of investors in our securities.”
Removed heading “As an “emerging growth company” under applicable law, we will be subject to lessened disclosure requirements, which could leave our stockholders without information or rights available to stockholders of more mature companies.”
Removed heading “Because we have elected to use the extended transition period for complying with new or revised accounting standards for an “emerging growth company” our financial statements may not be comparable to companies that comply with public company effective dates.”
Removed heading “We incur substantial costs as a result of being a public company and our management expects to devote substantial time to public company compliance programs.”
Largest changes
“Current and future legislation and SEC and CFTC rulemaking and other regulatory developments, including interpretations released by a regulatory authority, may impact the manner in which Bitcoin or other cryptocurrencies are viewed or treated for classification and clearing purposes. …”see in full comparison
Digital assets that are represented and trade on a ledger-based platform may not necessarily benefit from viable trading markets. Stock exchanges have listing requirements and vet issuers, requiring them to be subjected to rigorous listing standards and rules and monitoring investors transacting on such platform for fraud and other improprieties. These conditions may not necessarily be replicated on a distributed ledger platform, depending on the platform’s controls and other policies.see in full comparisonTheWemorehavelaxelected to use Coinbase – the largest US exchange by volume, and adistributedpublicly listedledgercompanyplatform– to sell our Bitcoin in an attempt to combat these issues. Coinbase maintains robust exchange controls, and operates futures markets, custodial services, and isabouta partner in multiple Bitcoin ETFs. We believe these elements significantly limit the ability of market manipulation due to low-liquidity. However, Coinbase does not have the same vetting of issuersofasdigitalaassetsnationalorsecurities exchange,userswhichthatleadstransacttoon the platform, thea higherthepotential risk for fraud orthemanipulation of digital assets.TheseSuchfactorsfraud or manipulation may decrease liquidity or volume, or increase volatility of digital securities or otherassetsassets,tradingwhichonmayaadverselyledger-basedaffectsystem.us. Such circumstances would havemaya material adverse effect our ability to sell Bitcoin at profitable prices, which would have a material adverse effect on ourability to continue as a going concern or to pursue this segment at all, which would have abusiness,material adverse effect on our business,prospects or operations and potentially the value of anycryptocurrenciesBitcoin we hold or expect to acquire for our own account and harm investors.
“A number of companies that provide Bitcoin and/or other cryptocurrency-related services have been unable to find banks or financial institutions that are willing to provide them with bank accounts and other services. Similarly, a number of companies and individuals or businesses associated with cryptocurrencies have had and may continue to have their existing bank accounts closed or services discontinued with financial institutions. We also may be unable to obtain or maintain these services for our business. …”see in full comparison
“If regulatory changes or interpretations require the regulation of Bitcoin or other digital assets under the securities laws of the United States or elsewhere, including the Securities Act, the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Investment Company Act of 1940, as amended, or similar laws of other jurisdictions and interpretations by the SEC, the Commodity Futures Trading Commission (“CFTC”), the Internal Revenue Service (“IRS”), Department of Treasury or other agencies or authorities, we may be required to register and comply with such regulations …”see in full comparison
“As an alternative to fiat currencies that are backed by central governments, digital assets such as Bitcoin, which are relatively new, are subject to supply and demand forces based upon the desirability of an alternative, decentralized means of buying and selling goods and services, and it is unclear how such supply and demand will be impacted by geopolitical events. Nevertheless, political or economic crises may motivate large-scale acquisitions or sales of Bitcoin either globally or locally. …”see in full comparison
“Bitcoin mining activities are energy-intensive, which may restrict the geographic locations of miners and have a negative environmental impact. Government regulators may potentially restrict the ability of electricity suppliers to provide electricity to mining operations, such as ours, or even fully or partially ban mining operations.”see in full comparison
Full comparison: every changed paragraph (111)
Investing in our common stock involves a high
degree of risk. You should consider carefully the risks and uncertainties described below, together with all of the other information
contained in this annual report, before deciding to invest in our common stock. If any of the following risks materialize, our business,
financial condition, results of operationoperations, cashflows and prospects will likely be materially and adversely affected. In that event, the
market price
of our common stock could decline and you could lose all or part of your investment.
We have limited cash resources and operating losses
throughout our history. As of December 31, 20242025 we had a working capital deficit of $8,650,939$6,640,236 and a net loss of $11,224,911.$5,874,051. Our cash
flow used by operating activities for the year ended December 31, 20242025 was $2,600,306.$1,330,383. Notwithstanding the foregoing, management has concluded
that it has sufficient liquidity to continue operations for a period of at least twelve months from the date of this Annual Report,Report on
Form 10-K, which
conclusion would not have been possible without close monitoring of the Company’s projected cash flow and operating
expenses for
a period of at least the next twelve months.
We may be subject to liabilities arising
prior to the Asset Acquisition under certain “successor liability” theories.
We acquired our business by means of a foreclosure
of the relevant secured lender’s security interest in the assets in the Asset Acquisition through an auction under Article 9 of
the Uniform Commercial Code. Although the general rule in the context of transactions such as the Asset Acquisition is that a purchaser
of assets does not assume the seller’s liabilities, various courts have established exceptions to this general rule, including where
the purchaser is a ‘mere continuation’ of the seller and there is a ‘continuity of enterprise.’ To date, we have
had one lawsuit whereby we have been found to have successor liability. This matter was settled by the parties. This is a highly fact
specific inquiry, and there can be no assurance that any interested creditor, the United States (through the Internal Revenue Service)
or state or local taxing agencies will not seek to hold us responsible for any existing liabilities at the time of the Asset Acquisition
under one or more of these successor liability theories, for which we have no indemnification protection under the agreements relating
to the Asset Acquisition.
Our operations are subject to a broad range of
complex and evolving laws and regulations. As a result, we must perform our services in compliance with the legal and regulatory requirements
of multiple jurisdictions. Some of these laws and regulations may be difficult to ascertain or interpret and may change from time to time.
Violation of such laws and regulations could subject us to fines and penalties, damage our reputation, constitute a breach of our client
agreements, impair our ability to obtain and renew required licenses, and decrease our profitability or competitiveness. If any of these
effects were to occur, our operating resultsresults, cash flows and financial condition could be adversely affected.
We are dependent on the continued services
and performance of our senior management and other key employees, the loss of any of whom could adversely affect our business, operating
resultsresults, financial condition and financialcash condition.flows.
Under the Securities Act and the Securities and
Exchange Act of 1934, as amended (the “Exchange Act”), issuers making offerings through our platform may be liable for including
untrue statements of material facts or for omitting information that could make the statements made misleading. This liability may also
extend in Regulation Crowdfunding offerings to funding portals. Even though we are not a registered funding portal, there can be no assurance
that if we were suedsued, we would prevail. Further, even if we do succeed, lawsuits are time consuming and expensive, and being a party to
such actions may cause us reputational harm that would negatively impact our business.
The financial services and payment technology
industries are highly competitive, and our payment services and solutions compete against all forms of financial services and payment
systems, including cash and checks, and electronic, mobile, E-commerce and integrated payment platforms. If we are unable to differentiate
ourselves from our competitors and drive value for our merchants, we may not be able to compete effectively. Our competitors may introduce
their own value-added or other innovative services or solutions more effectively than we do, which could adversely impact our current
competitive position and prospects for growth. They also may be able to offer and provide services that we do not offer. In addition,
in certain of our markets in which we operate, we process “on-us” transactions whereby we receive fees as a merchant acquirer
and for processing services for the issuing bank. As competition in these markets grows, the number of transactions in which we receive
fees for both of these roles may decrease, which could reduce our revenue and margins in these jurisdictions. We also compete against
new entrants that have developed alternative payment systems, E-commerce payment systems, payment systems for mobile devices and customized
integrated software payment solutions. Failure to compete effectively against any of these competitive threats could adversely affect
our business, financial condition orcondition, results of operations.operations or cash flows. In addition, some of our competitors are larger and have greater
financial financial
resources than us, enabling them to maintain a wider range of product offerings, mount extensive promotional campaigns and be
more aggressive
in offering products and services at lower rates, which may adversely affect our business, financial conditioncondition, results
of operations or resultscash of operations.flows.
Failure to compete effectively against any of
these or other competitive threats could adversely affect our business, financial condition orcondition, results of operations.operations or cash flows.
Our products and services are based on sophisticated
software and computing systems that are constantly evolving. We often encounter delays and cost overruns in developing changes implemented
to our systems. In addition, the underlying software may contain undetected errors, viruses or defects. Defects in our software products
and errors or delays in our processing of electronic transactions could result in additional development costs, diversion of technical
and other resources from our other development efforts, loss of credibility with current or potential merchants, harm to our reputation
or exposure to liability claims. In addition, we rely on technologies supplied to us by third parties that may also contain undetected
errors, viruses or defects that could adversely affect our business, financial condition orcondition, results of operations.operations or cash flows. Although
we attempt
to limit our potential liability for warranty claims through disclaimers in our software documentation and limitation of liability
provisions provisions
in our licenses and other agreements with our merchants and partners, we cannot assure that these measures will be successful
in limiting
our liability. Additionally, we and our merchants and partners are subject to card network rules. If we do not comply with
card network
requirements or standards, we may be subject fines or sanctions, including suspension or termination of our registrations
and licenses
necessary to conduct business.
Fraud by merchants or others could adversely
affect our business, financial condition orcondition, results of operations.operations or cash flows.
We may be liable for certain fraudulent transactions
and credits initiated by merchants or others. Examples of merchant fraud include merchants or other parties knowingly using a stolen or
counterfeit credit or debit card, card number, or other credentials to record a false sales or credit transaction, processing an invalid
card or intentionally failing to deliver the merchandise or services sold in an otherwise valid transaction. Criminals are using increasingly
sophisticated methods to engage in illegal activities such as counterfeiting and fraud. Failure to effectively manage risk and prevent
fraud could increase our chargeback liability or cause us to incur other liabilities. It is possible that incidents of fraud could increase
in the future. Increases in chargebacks or other liabilities could adversely affect our business, financial condition orcondition, results of operations.operations
or cash flows.
Our OmniSoft subsidiary principally generates
revenuesrevenue through the sale of subscriptions to our platform and the sale of additional solutions to our merchants. Our subscription plans
typically have a one-month term, although a small percentage of our merchants have annual or multi-year subscription terms. Our merchants
have no obligation to renew their subscriptions after their subscription term expires. As a result, even though the number of merchants
using our platform has grown rapidly in recent years, there can be no assurance that we will be able to retain these merchants. We have
historically experienced merchant turnover as a result of many of our merchants being small- and medium-sized businesses, or SMBs, that
are more susceptible than larger businesses to general economic conditions and other risks affecting their businesses. Many of these SMBs
are in the entrepreneurial stage of their development and there is no guarantee that their businesses will succeed. Our costs associated
with subscription renewals are substantially lower than costs associated with generating revenue from new merchants or costs associated
with generating sales of additional solutions to existing merchants. Therefore, if we are unable to retain merchants or if we are unable
to increase revenues from existing merchants, even if such losses are offset by an increase in new merchants or an increase in other revenues,
our operating results could be adversely impacted.
We may experience difficulties with software
development development
that could delay or prevent the development, introduction or implementation of new solutions and enhancements. Software
development involves
a significant amount of time for our research and development team, as it can take our developers months to
update, code and test new
and upgraded solutions and integrate them into our platform. We must also continually update, test and
enhance our software platform.
For example, our design team spends a significant amount of time and resources incorporating various
design enhancements, such as customized
colors, fonts, content and other features, into our platform. The continual improvement and
enhancement of our platform requires significant
investment and we may not have the resources to make such investment. Our
improvements and enhancements may not result in our ability
to recouprecover our investments in a timely manner, or at all. To the extent
we are not able to improve and enhance the functionality, performance,
reliability, design, security and scalability of our platform
in a manner that responds to our merchants’ evolving needs, our business,
operating results and financial condition will be
adversely affected.
Our merchants often draw significant numbers of
consumers to their shops over short periods of time, including from events such as new product releases, holiday shopping seasons and
flash sales, which significantly increases the traffic on our servers and the volume of transactions processed on our platform. Our servers
may be unable to achieve or maintain data transmission capacity high enough to handle increased traffic or process orders in a timely
manner. Our failure to achieve or maintain high data transmission capacity could significantly reduce demand for our solutions. In the
future, we may be required to allocate resources, including spending substantial amounts of money, to build, purchase or lease additional
data centers and equipment and upgrade our technology and network infrastructure in order to handle the increased load. Our ability to
deliver our solutions also depends on the development and maintenance of internet infrastructure by third-parties,third parties, including the maintenance
of reliable networks with the necessary speed, data capacity and bandwidth. If one of these third-partiesthird parties suffers from capacity constraints,
our business may be adversely affected. In addition, because we and our merchants generate a disproportionate amount of revenue in the
fourth quarter, any disruption in our merchants’ ability to process and fulfill customer orders in the fourth quarter could have
a disproportionately negative effect on our operating results.
Our growth depends in part on the success
of our strategic relationships with third parties.
We anticipate that the growth of our business
will continue to depend on third-party relationships, including relationships with our app developers, theme designers, referral sources,
resellers, payment processors and other partners. In addition to growing our third-party partner ecosystem, we intend to pursue additional
relationships with other third-parties, such as technology and content providers and implementation consultants. Identifying, negotiating
and documenting relationships with third parties requires significant time and resources as does integrating third-party content and technology.
Some of the third parties that sell our services have the direct contractual relationships with the merchants, and therefore we risk the
loss of such merchants if the third parties fail to perform their obligations. Our agreements with providers of cloud hosting, technology,
content and consulting services are typically non-exclusive and do not prohibit such service providers from working with our competitors
or from offering competing services. These third-party providers may choose to terminate their relationship with us or to make material
changes to their businesses, products or services. Our competitors may be effective in providing incentives to third parties to favor
their products or services or to prevent or reduce subscriptions to our platform. In addition, these providers may not perform as expected
under our agreements or under their agreements with our merchants, and we or our merchants may in the future have disagreements or disputes
with such providers. If we lose access to products or services from a particular supplier, or experience a significant disruption in the
supply of products or services from a current supplier, especially a single-source supplier, it could have an adverse effect on our business
and operating results.
Cryptocurrencies and blockchain technologies are
relatively new and highly speculative. Bitcoin and blockchain technologies have limited history, and their risks cannot be fully known
at this time. As Bitcoin assets and blockchain technologies
become more widely available, we expect the services and products associated
with them to evolve. In order to stay current with the industry,
our business model may need to evolve as well. From time
to time, we may modify aspects of our business model relating to our product mix and service offerings.Bitcoin
mining. We cannot offer any assurance
that these or any other modifications will be successful or will not result in harm to our business. We may not
be able to manage growth
effectively, which could damage our reputation, limit our growth and negatively affect our operating results.
Such circumstances
could have a material adverse effect on our ability to continue as a going concern or to pursue our new strategy at
all, which could have
a material adverse effect on our business, prospects or operations.
We may not be able to compete with other
companies, some of whichwhom have greater resources and experience.
The Bitcoin network features a large and growing number of miners competing for limited mining rewards. This competition intensifies with each participant added to the network. The competitive environment is exacerbated by the fact that the Bitcoin protocol halves mining rewards approximately every four years, reducing the potential earnings for miners and increasing the importance of operational efficiency. This requires us to continuously invest in new mining equipment to earn consistent Bitcoin mining rewards.
Limited transaction capacity and scaling issues may impact mining results
Bitcoin’s “proof of work” validation mechanism inherently limits the number of transactions that can be processed per second. This limitation poses significant scaling challenges, affecting the network’s ability to handle a high volume of transactions efficiently. As part of mining rewards are related to transaction fees, these issues may cause volatility in the rewards earned. During periods of high-demand and low-capacity, earned fees may exceed the block standard block reward. Conversely, increased capacity may lead to lower transaction fees if demand is reduced.
Efforts to increase transaction capacity, such as sharding and other scalability solutions, are ongoing. However, their effectiveness, implementation timeline, and applicability to Bitcoin remain uncertain. These efforts may change the economics of Bitcoin mining, or potentially require new hardware or software to unlock.
As a participant in the digital asset ecosystem, our business growth and development are closely tied to the widespread acceptance and scalability of digital assets, including Bitcoin. The competitive dynamics in Bitcoin mining, including the limited transaction capacity and the continual halving of mining rewards, present challenges that could impact our operational efficiency and profitability. Efforts to scale digital asset transactions may lead to significant changes in the competitive landscape of the digital asset market. These changes could affect the value of Bitcoin and, by extension, the valuation of the company.
However, there is no certainty that scalability solutions will be universally effective for us or that they will not disadvantage certain participants. Given these challenges, there is a risk that our business, financial condition, and operating results could be materially adversely affected. The value of our common stock may also be impacted by these industry-wide issues.
Our current Bitcoin mining operationfarm in Tennessee is,
and any future mining farms we establish will be, subject to a variety of risks relating to physical condition and operation, including:
We have recently adopted a digital asset treasury strategy with a focus on Bitcoin, and we may be unable to successfully implement this new strategy.
We have recently adopted our Treasury Policy primarily dedicated to Bitcoin, including potential investments in Bitcoin. There is no assurance that we will be able to successfully implement this new strategy or operate Bitcoin-related activities at the scale or profitability currently anticipated. This strategic shift requires specialized employee skillsets and operational, technical and compliance infrastructure to support Bitcoin. This also requires that we implement different security protocols, and treasury management practices. Further, there is ongoing scrutiny and limited formal guidance from regulatory agencies, including Nasdaq and the SEC, with respect to the treatment of public company cryptocurrency strategies. There is no assurance that we will be able to execute this strategy by building out the needed infrastructure within the timeframe that we currently anticipate. Errors by key management could result in significant loss of funds and reduced rewards. As a result, our shift towards a Bitcoin digital asset treasury strategy could have a material adverse effect on our business and financial condition.
In addition, the Bitcoin ecosystem rapidly evolves, with frequent upgrades and protocol changes that may require significant adjustments to our operational setup. The upgrades and protocol changes may require that we incur unanticipated costs and could cause temporary service disruptions. We may also need to employ third-party service providers in our operations, which may introduce risks outside of our control, including significant cybersecurity risks. Any of these operational risks could materially and adversely affect our ability to execute our Bitcoin digital asset treasury strategy, prevent us from realizing positive returns and severely hurt our financial condition.
If we are unable to successfully maintain our power arrangements on acceptable terms or at all or if we must otherwise relocate to replacement sites, our operations may be disrupted, and our business results may suffer.
As part of our initial buildout phase, we set up and began operations across four cities in the United States, with three in Pennsylvania and one in Tennessee. After consolidating our operations, we currently operate out of one location in Selmer, Tennessee. We entered into definitive power arrangements with Pickwick Electric Cooperative, the utility company in Tennessee, which is intended to cover sites for our data centers that we may utilize in the near future.
If we are forced to locate alternative sites because of unacceptable power arrangements, we may not be successful in identifying adequate replacement sites to house our miners. Even if we identify such sites, we may not be successful in leasing the necessary facilities at rates that are economically viable to support our mining activities. Even if we successfully secure the sites for our data centers, in the future, we may not be able to renew those on acceptable terms, in which case we would need to relocate our established mining operations. Relocating any mining operation may force us to incur the costs to transition to a new facility including, but not limited to, transportation expenses and insurance, downtime while we are unable to mine, legal fees to negotiate the new lease, de-installation at our current facility and, ultimately, installation at any new facility we identify. These costs may be substantial, and we cannot guarantee that we will be successful in transitioning our miners to a new facility. Such circumstances could have a material adverse effect on our business, prospects, financial condition, and operating results.
We depend on third parties to provide us with certain critical equipment and rely on components and raw materials that may be subject to price fluctuations or shortages, including ASIC chips that have been subject to an ongoing significant shortage.
In order to build and sustain our operations we will depend on third parties to provide us with ASIC mining equipment, which may be subject to price fluctuations or shortages. For example, the ASIC chip is the key component of a mining machine as it determines the efficiency of the device. The production of ASIC chips typically requires highly sophisticated silicon wafers, which currently only a small number of fabrication facilities, or wafer foundries, in the world are capable of producing. We believe that the current microchip and semiconductor shortage that the entire industry is experiencing leads to price fluctuations and disruption in the supply of key miner components. Specifically, the ASIC chips have been subject to a significant price increases and shortages.
Our ability to source ASIC mining equipment and other critical components in a timely matter and at an acceptable price and quality level is critical to our operational buildout timeline and the development under our current business model. See “Business—Bitcoin Mining Technology”. We will be exposed to the risk of disruptions or other failures in the overall global supply chain for Bitcoin mining hardware. This is particularly relevant to the ASIC mining equipment production since there are only a small number of fabrication facilities capable of such production, which increases our risk exposure to manufacturing disruptions or other supply chain failures. There is also a risk that a manufacturer or seller of ASIC computers or other necessary mining equipment may adjust the prices according to Bitcoin, other Bitcoin prices or otherwise, so the cost of new machines could become unpredictable and extremely high. As a result, at times, we may be forced to obtain miners and other hardware at premium prices, to the extent they are even available. Such events could have a material adverse effect on our business, prospects, financial condition, and operating results.
We may not be able to successfully implement or consummate our planned digital asset investment strategy.
As of the date of this prospectus, we have not executed any material investments beyond Bitcoin mining, and there is a real possibility that the proposed strategy may never be implemented if risk factors prove prohibitive or regulatory standards cannot be met. The Company continues only to evaluate potential asset classes, investment parameters, and risk management practices under the highest scrutiny, with absolute priority placed on security, custody, and regulatory adherence. There can be no assurance that we will proceed with or benefit from any digital asset investments.
We are exposed to risk of nonperformance by counterparties, including our counterparties under our power arrangements.
We are exposed to risk of nonperformance by counterparties, whether contractual or otherwise. Risk of nonperformance includes inability or refusal of a counterparty to perform because of a counterparty’s financial condition and liquidity or for any other reason. For example, our counterparties under our power arrangements may be unable to deliver the required amount of power at the required time for a variety of technical or economic reasons. Furthermore, there is a risk that during a period of power price fluctuations or prolonged or sharp power price increases on the market, our counterparties may find it economically preferable to refuse to supply power to us, despite the contractual arrangements. Any significant nonperformance by counterparties, could have a material adverse effect on our business, prospects, financial condition, and operating results.
Additionally, our mining operations could be materially adversely affected by power outages and similar disruptions. Given the power requirements for our mining equipment, it would not be feasible to run this equipment on back-up power generators in the event of a government restriction on electricity or a power outage. Under some of our power arrangements, our power supply could be automatically reduced or curtailed by the market regulators or grid operators in cases of certain system disruptions or emergencies. If we are unable to receive adequate power supply and are forced to reduce or shut down our operations due to the availability or cost of electrical power, it would have a material adverse effect on our business, prospects, financial condition, and operating results.
Bitcoin mining activities are energy-intensive, which may restrict the geographic locations of miners and have a negative environmental impact. Government regulators may potentially restrict the ability of electricity suppliers to provide electricity to mining operations, such as ours, or even fully or partially ban mining operations.
Mining Bitcoin requires massive amounts of electrical power, and electricity costs are expected to account for a significant portion of our overall costs. The availability and cost of electricity will restrict the geographic locations of our mining activities. Any shortage of electricity supply or increase in electricity costs in any location where we plan to operate may negatively impact the viability and the expected economic return for Bitcoin mining activities in that location.
Further, our business model can only be successful and our mining operations can only be profitable if the costs, including electrical power costs, associated with Bitcoin mining are lower than the price of Bitcoin itself. As a result, any mining operation we establish can only be successful if we can obtain sufficient electrical power for that site on a cost-effective basis, and our establishment of new mining data centers requires us to find sites where that is the case. Even if our electrical power costs do not increase, significant fluctuations in, and any prolonged periods of, low Bitcoin prices may also cause our electrical supply to no longer be cost-effective.
In addition, there may be significant competition for suitable Bitcoin mining sites. Government regulators, including local permitting officials, may also potentially restrict our ability to set up Bitcoin mining operations in certain locations. They can also restrict the ability of electricity suppliers to provide electricity to mining operations in times of electricity shortage, or may otherwise potentially restrict or prohibit the provision of electricity to mining operations.
As Bitcoin mining becomes more widespread, government scrutiny related to restrictions on Bitcoin mining facilities and their energy consumption significantly increases. The considerable consumption of electricity by mining operators may also have a negative environmental impact, including contribution to climate change, which could set the public opinion against allowing the use of electricity for Bitcoin mining activities or create a negative consumer sentiment and perception of Bitcoin, specifically, or Bitcoin generally. This, in turn, could lead to governmental measures restricting or prohibiting Bitcoin mining or the use of electricity for Bitcoin mining activities. Any such development in the jurisdictions where we plan to operate could increase our compliance burdens and have a material adverse effect on our business, prospects, financial condition, and operating results. Government regulators in other countries may also ban or substantially limit their local Bitcoin mining activities, which could have a material effect on our supply chains for mining equipment or services and the price of Bitcoin.
CryptocurrencyBitcoin exchanges and other trading venues
venues are relatively new and, in most cases, largely unregulated and may therefore be the subject ofto fraud and failures.
When cryptocurrencyBitcoin exchanges or other trading venues
venues are involved in fraud or experience security failures or other operational issues, such events could result in a reduction in cryptocurrencyBitcoin
prices or confidence and impact our success and have a material adverse effect on our ability to continue as a going concern or to pursue
this segment at all, which would have a material adverse effect on our business, prospects and operations.
CryptocurrencyBitcoin market prices depend, directly
or indirectly,
on the prices set on exchanges and other trading venues, which are new and, in most cases, largely unregulated as compared
to established,
regulated exchanges for securities, commodities or currencies. For example, during the past severalthree years, a number of
Bitcoin exchanges
have closed due to fraud, business failure or security breaches. In many of these instances, the customers of the closed
exchanges were
not compensated or made whole for partial or complete losses of their account balances. While smaller exchanges are less
likely to have
the infrastructure and capitalization that may provide larger exchanges with some stability, larger exchanges may be more
likely to be
appealing targets for hackers and “malware” (i.e., software used or programmed by attackers to disrupt computer operation,
operation, gather sensitive information or gain access to private computer systems) and may be more likely to be targets of regulatory enforcement
enforcement action. We do not maintain any insurance to protect from such risks, and do not expect any insurance for customer accounts
to be available
(such as federal deposit insurance) at any time in the future, putting customer accounts at risk if anyfrom such eventsevents. occur.
In the event we experience face
fraud, security failures, operational issues or similar eventsevents, such factors would have a material adverse effect
on our ability to continue
as a going concern or to pursue this segment at all, which would have a material adverse effect on our business,
prospects and operations.
The concentration of our holdings in Bitcoin could enhance the risks inherent in our Bitcoin treasury strategy.
The concentration of our Bitcoin holdings limits the risk mitigation that we could achieve if we were to purchase a more diversified portfolio of treasury assets, and the absence of diversification enhances the risks inherent in our Bitcoin treasury strategy. Any future significant declines in the price of Bitcoin would have, a more pronounced impact on our financial condition than if we used our cash to purchase a more diverse portfolio of assets.
The availability of spot ETPs for Bitcoin and other digital assets may adversely affect the market price of our listed securities.
Although Bitcoin and other digital assets have experienced a surge of investor attention since Bitcoin was invented in 2008, until recently investors in the United States had limited means to gain direct exposure to Bitcoin through traditional investment channels, and instead generally were only able to hold Bitcoin through “hosted” wallets provided by digital asset service providers or through “unhosted” wallets that expose the investor to risks associated with loss or hacking of their private keys. Given the relative novelty of digital assets, general lack of familiarity with the processes needed to hold Bitcoin directly, as well as the potential reluctance of financial planners and advisers to recommend direct Bitcoin holdings to their retail customers because of the manner in which such holdings are custodied, some investors have sought exposure to Bitcoin through investment vehicles that hold Bitcoin and issue shares representing fractional undivided interests in their underlying Bitcoin holdings. These vehicles, which were previously offered only to “accredited investors” on a private placement basis, have in the past traded at substantial premiums to net asset value, possibly due to the relative scarcity of traditional investment vehicles providing investment exposure to Bitcoin.
On January 10, 2024, the SEC approved the listing and trading of spot Bitcoin and exchange traded products (ETPs), the shares of which can be sold in public offerings and are traded on U.S. national securities exchanges. To the extent investors view our Common Stock as providing exposure to Bitcoin, it is possible that the value of our Common Stock may be influenced by the trading activity and performance of these spot Bitcoin ETPs. Additionally, on May 23, 2024, the SEC approved rule changes permitting the listing and trading of spot ETPs that invest in ether, the main crypto asset supporting the Ethereum blockchain. The listing and trading of spot ETPs for ether offers investors another alternative to gain exposure to digital assets, which could result in a decline in the trading price of Bitcoin as well as a decline in the value of our Class A Ordinary Shares relative to the value of our Bitcoin.
Furthermore, recommendations by broker-dealers to buy, hold, or sell complex products and non-traditional ETPs, or an investment strategy involving such products, may be subject to additional or heightened scrutiny that would not be applicable to broker-dealers making recommendations with respect to our securities. Based on how we are viewed in the market relative to ETPs, and other vehicles which offer economic exposure to Bitcoin, such as Bitcoin futures exchange-traded funds (“ETFs”), leveraged Bitcoin futures ETFs, and similar vehicles offered on international exchanges, any premium or discount in our Common Stock relative to the value of our Bitcoin holdings may increase or decrease in different market conditions.
As a result of the foregoing factors, availability of spot ETPs for Bitcoin and other digital assets could have a material adverse effect on the market price of our listed securities.
Our business may be significantly impacted by reputational risks and may impact how our business is perceived by customers, counterparties, and regulators.
Reputational risks represent a significant concern in our industry, particularly due to the volatile and evolving nature of the Bitcoin markets. Our business faces potential reputational harm from several industry wide factors, including perceived regulatory non-compliance, catastrophic market volatile events, industry association with fraudulent or illegal activities. Such incidents can lead to a loss of trust among our customers, investors, and partners, adversely affecting our business.
In addition, negative public perception, fueled by media coverage or social media discourse, can impact investor confidence and our company’s market valuation. For example, incorrect or misleading statements about the power consumption of the Bitcoin network may damage the Company’s perception as being energy efficient.
Regulatory bodies may also view our operations with increased skepticism in the wake of certain events, potentially leading to stricter scrutiny and additional compliance requirements. Furthermore, as a company operating in a nascent and often misunderstood sector, any perceived ethical missteps or failures in corporate governance can be magnified, causing long-term damage to our brand and standing in the industry.
Effectively managing these reputational risks is critical to maintaining our market position and ensuring sustainable growth. Failure to address or mitigate these risks adequately could have a material adverse effect on our business, financial condition, and operational results.
Management's Discussion & Analysis (MD&A)
Largest changes
The Company has reviewed its cash flow activity duringsee in full comparison20242025 and projected cash flow forecast for20252026 and 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. Based on projected cash to be used in operations to be offset by expected proceeds from capital raises, the ATM program and loan proceeds from Ronny Yakov under the loan agreement, the Company believes it has sufficient liquidity in order to sustain operations for at least the twelve months following the filing of this Annual Report. During the first quarter of 2026, the Company raised capital through a direct offering and a PIPE. The total cash to the Company from these transactions totaled over $3.7M. The Company believes this is sufficient to cover operations for the next 12 months. However, management recognizes that it may be required to obtain additional resources to successfully execute its business plans. No assurances can be given that management will be successful in raising additional capital, if needed, or on acceptable terms.WithoutManagementraisingbelievesadditionalthatcapital,theeitherCompany’sviaexistingadditionalcash resources, together with expected capital raises, potential advancesmade pursuant tounder theATM,ATM program, related partyloanfinancing,or fromand other available funding sources,thereiswillsubstantialbedoubt about the Company’s abilitysufficient tocontinue as a going concernsupport operations through March 31,2026. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of presentation contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business.2027.
“For the year ended December 31, 2023, we received $2,046,922 of cash in operating activities, which included our net loss offset by $6,732,132 for amortization and depreciation expense, $727,758 for stock-based compensation, impairment expense of $12,902,788, a realized gain of $288,584 from the sale of bitcoin and an unrealized gain on investment of $23,662 and net changes in operating assets and liabilities of $5,274,238.”see in full comparison
For the year ended December 31, 2024, we had total impairment expense of $2,962,469 related tosee in full comparisonDmint’sDMINT’s exclusive agreement to purchase natural gas.For the year ended December 31, 2023, we had total impairment expense of $12,902,788. $12,642,857 was for the write down of the Acquired Merchant Portfolio. There was also an impairment of $259,931 related to the Bitcoin miners owned by DMINT.
Professional fees for the year ended December 31,see in full comparison20242025 were$1,939,542$935,076 compared to$2,336,785$1,939,542 for the year ended December 31,2023,2024, a decrease of$397,243$1,004,466 or17%.51.8%. Professional fees consist mainly of audit and legal fees. The decrease in the current period is due to a decrease in legalfees.fees as the Company’s legal related activity for ongoing litigation was much less in the current year.
“Crowd Ignition is a web-based crowdfunding software system. The software provides broker-dealer, merchant banks and law firms a platform to market crowdfunding offerings, collect payments and issue securities. The software has been developed in response to, and to comply with, recent changes in investment regulations including Regulation D 506(b) and 506(v), Regulation A+ and Title III of the Jobs Act (Regulation CF), including raising the crowdfunding limit from $1.07 million to $5.0 million. …”see in full comparison
For the year ended December 31,see in full comparison2024,2025, we had total revenue of$12,838,988$8,676,907 compared to$30,571,637$12,838,988 of revenue for the year ended December 31,2023,2024, a decrease of$17,732,649$4,162,081 or58%.32.4%. We earned $7,936,768 in transaction and processing fees, $28,720 in merchant equipment sales, $210,256 of revenue from the Bitcoin Mining segment, $302,241 in revenue from monthly recurring subscriptions and $198,922 of digital product revenue; compared to $9,684,152 in transaction and processing fees, $75,575 in merchant equipment sales,$521,268 in revenue from monthly recurring subscriptions,$413,332of revenue from the Bitcoin Mining segment, and $2,144,661 of digital product revenue; compared to $27,096,245 in transaction and processing fees, $89,532 in merchant equipment sales, $312,565 in revenue from monthly recurring subscriptions, $538,718of revenue from the Bitcoin Mining segment, $521,268 in revenue fromSegmentmonthly recurring subscriptions and$2,534,577$2,144,661 of digital product revenue. We had a decrease of revenue for our transaction and processing fees of$17,412,093,$1,747,384, a decrease in merchant equipment sales of $46,855, a decrease of$125,386$203,076 of bitcoin mining revenue, a decrease of$208,703$219,027 from the monthly recurring subscriptions,a decrease in merchant equipment sales of $13,957and a decrease of$389,916$1,945,739 of digital product revenue. We had a decrease in revenue primarily due to a decrease in revenue related to Moola Cloud, LLC, as the Company transitions to new vendors to obtain better pricing and is working to acquire new vendors to replace others that have gone out of business. The majority of the transitions have been completed, and vendors will be in use by Q1 2026.
Full comparison: every changed paragraph (32)
The following discussion and analysis of our
consolidated financial condition and results of operations for years ended December 31, 20242025 and 20232024 should be read in conjunction
with the consolidated financial statements and notes related thereto included elsewhere in this report.Annual Report on Form 10-K.
We are primarily a FinTech company that focuses
on a suite
of products in the merchant services marketplace that seeks to provide integrated business solutions to merchants throughout
the United States.
We seek to accomplish this by providing merchants with a wide range of products and services through our various
online platforms, including
financial and transaction processing services. We also have products that provide support for crowdfunding
and other capital raising initiatives.
We supplement our online platforms with certain hardware solutions that are integrated with our
online platforms. Our business functions
primarily through three wholly-owned subsidiaries, eVance, OmniSoft, and CrowdPay, though substantially all of our revenue has been
generated from our eVance business (we began generating revenue from our OmniSoft and CrowdPay businesses in the second half of 2019).
We expect to build out our OmniSoft software business and to rely more on individualized merchant services offerings for revenue so that
we are not dependent on our revenue from our eVance business but there is no guarantee that we will be able to do so.
We have integrated all the applications for OmniSoft
and the ShopFast Omnicommerce solution with the eVance mobile payment gateway, SecurePay.comTM.SecurePay.com™. SecurePay.comTM, SecurePay.com™,
is currently used by
approximately 3,000 merchants processing over 32,000 transactions and approximately $9,000,000 of monthly gross
transactions (though our
revenue from these transactions is limited). In July 2019, we launched a new merchant and ISO boarding system
that will be able to onboard
merchants instantly. This provides the merchant with an automated approval and ISOs will have the ability
to see all their merchants and
their residuals as they load to the system.
On May 22, 2020, the Company purchased certain
assets from POSaBIT Inc. (“POSaBIT”), including its contracts and arrangements with the Doublebeam merchant payment processing
platform (the “POSaBIT Asset Acquisition”). The assets included, but were not limited to, software source codes, customer
lists, customer contracts, hardware and website domains.
On May 14, 2021, the Company formed its wholly
owned subsidiary, OLBit, Inc. (“OLBit”).OLBit. The purpose of OLBit is to hold the Company’s assets and operate its business
related to its emerging money
transmission and transactional business.
On July 23, 2021, we formed our wholly owned subsidiary,
DMINT, Inc. (“DMINT”), to operate in the Bitcoin mining industry, specifically the mining of Bitcoin. DMINT initiated the
first phase of its 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, 2024,2025, DMINT has 1,000 computers and had 400 computers online and mining for Bitcoin.
In February 2023, it re-deployed
all of the computers to its Selmer, Tennessee location. At December 31, 2024,2025, DMINT had mined 57.7460.01 Bitcoin.
The Company is currently
in the process of spinning off DMINT into a stand-alone entity.
On January 3, 2022, the Company entered into a
share exchange agreement with all of the stockholders of Crowd Ignition, Inc. (“Crowd Ignition”) whereby the Company purchased
100% of the equity of Crowd Ignition in exchange for 1,318,408 shares of the common stock, par value $0.0001 of the Company (the “CI
Issued Shares”). The value of the CI Issued Shares was, for purposes of the Agreement, based on the closing trading price of the
Company on October 1, 2021 (the date on which a third-party fairness opinion was issued), resulting in an aggregate purchase price for
Crowd Ignition of $5.3 million. The share exchange transaction closed on January 3, 2022. Prior to the closing of the share exchange transaction,
Ronny Yakov, Chairman and CEO of the Company, and John Herzog, a stockholder of the Company, owned 100% of the outstanding equity of Crowd
Ignition.
Crowd Ignition is a web-based crowdfunding software
system. The software provides broker-dealer, merchant banks and law firms a platform to market crowdfunding offerings, collect payments
and issue securities. The software has been developed in response to, and to comply with, recent changes in investment regulations including
Regulation D 506(b) and 506(v), Regulation A+ and Title III of the Jobs Act (Regulation CF), including raising the crowdfunding limit
from $1.07 million to $5.0 million. Crowd Ignition is one of only about 50 companies registered with the SEC to provide the services permitted
under Regulation CF.
On June 15, 2023, the Company entered into a Membership
Interest Purchase Agreement with SDI Black 001, LLC (“Seller”) whereby the Company acquired from Seller 80.01% of the membership
interests of Moola Cloud, LLC, a Florida limited liability company (f/k/a Cuentas SDI, LLC) (the “LLC”). The LLC willenables enablethe
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 marketmarkets 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 allowallows 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. On May 20, 2024,
the Company entered
into a second Membership Interest Purchase Agreement with the minority member of the LLC (the “Agreement”)
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. The Agreement contains
a restrictive covenant
whereby for a period of three (3) years from the closing, none of Seller, including its any of its principals,
executives, officers, directors,
managers, employees, salespersons, or entities in which such principal has any interest, will directly
or indirectly (i) induce, attempt
to induce, interfere with, disrupt or attempt to disrupt any past, present or prospective business relationship,
solicit, market to, endeavor
to obtain as a customer, or contract with any merchant in order to provide services to such Merchant in competition
with the Company;
or (ii) solicit or interfere with, disrupt or attempt to disrupt any past, present or prospective business relationship,
contractual or
otherwise any person or entity that is a party to any contract assigned to the Company to terminate its contractual or
business relationship
with the Company On April 26, 2024, the Company filed with the
State of Delaware a Certificate of Amendment to Certificate of Incorporation (the “Certificate of Amendment”) which became
effective on April 26, 2024, to effect a one-for-ten (1:10) reverse stock split (the “Reverse Stock Split”) of the shares
of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) The Reverse Stock Split was approved
by the Company’s stockholders at a special meeting on April 26, 2024.Company.
As a result of the Reverse Stock Split, every
ten (10) shares of issued and outstanding Common Stock was automatically combined into one (1) issued and outstanding share of Common
Stock, without any change in the par value per share. No fractional shares were issued as a result of the Reverse Stock Split and any
fractional shares resulting from the reverse stock split were rounded down to the nearest number of whole shares so that we will issue
cash in lieu of any fractional shares that such stockholder would have received as a result of the Reverse Stock Split. Immediately following
the Reverse Stock Split, the number of shares of Common Stock outstanding was reduced from 18,103,462 shares to 1,810,346 shares. The
shares of Common Stock underlying the Company’s outstanding stock options and warrants were similarly adjusted along with corresponding
adjustments to their exercise prices. The number of authorized shares of Common Stock under the Certificate of Incorporation will remain
unchanged at 50,000,000 shares.
For the year ended December 31, 2024,2025, we had total
revenue of $12,838,988
$8,676,907 compared to $30,571,637$12,838,988 of revenue for the year ended December 31, 2023,2024, a decrease of $17,732,649$4,162,081 or 58%.32.4%. We earned
$7,936,768 in transaction and processing fees, $28,720 in merchant equipment sales, $210,256 of revenue from the Bitcoin Mining segment,
$302,241 in revenue from monthly recurring subscriptions and $198,922 of digital product revenue; compared to $9,684,152 in transaction
and processing fees, $75,575 in merchant equipment sales, $521,268 in revenue from monthly recurring subscriptions, $413,332 of revenue
from the Bitcoin Mining segment, and $2,144,661 of digital product revenue; compared to $27,096,245 in transaction and processing fees,
$89,532 in merchant equipment sales, $312,565 in revenue from monthly recurring subscriptions, $538,718 of revenue from the Bitcoin Mining segment, $521,268 in revenue from
Segmentmonthly recurring subscriptions and $2,534,577$2,144,661 of digital product revenue. We had a decrease of revenue for our transaction and processing
fees of $17,412,093,
$1,747,384, a decrease in merchant equipment sales of $46,855, a decrease of $125,386$203,076 of bitcoin mining revenue, a decrease of $208,703
$219,027 from the monthly recurring subscriptions, a decrease in merchant
equipment sales of $13,957 and a decrease of $389,916$1,945,739 of digital product revenue. We had a decrease in revenue primarily due to a decrease in revenue
related to Moola Cloud, LLC, as the Company transitions to new vendors to obtain better pricing and is working to acquire new vendors
to replace others that have gone out of business. The majority of the transitions have been completed, and vendors will be in use
by Q1 2026.
Transaction and processing revenue decreased as
a result of the loss of the CBD portfolio. Bitcoin revenue decreased due to the price of bitcoin dropping in 2024 compared to 2023. Monthly
recurring subscription revenue decreased due to less subscriptions.
For the year ended December 31, 2024,2025, we had processing
and servicing costs of $10,669,238$7,528,415 compared to $21,181,499$10,669,238 of processing and servicing costs for the year ended December 31, 2023,2024, a decrease
of $10,512,261$3,140,823 or 49.6%.29.4%. Processing and servicing costs decreased in conjunction with the decreased revenue.revenue and merchant attrition.
Amortization expense for the year ended
December December
31, 20242025 was $533,805$0 compared to $4,172,117$533,805 for the year ended December 31, 2023, a decrease of $3,638,312 or 87.2%.2024. We recordrecorded amortization
expense on our merchant
portfolio, trademarks and natural gas purchase rights.rights in 2024 and none in 2025. The decrease in the current period is due to the
write offmost of the CBDassets portfoliobeing asfully ofamortized December 31, 2023, therefore no amortization was recorded for the asset during the year ended December
31,in 2024.
Depreciation expense for our Bitcoin Mining Segment
was $507,393 for the year ended December 31, 2025 compared to $2,616,137 for the year ended December 31, 20242024, compareda decrease of $2,108,744
or 80.6%. The decrease in the current period is due to $2,560,015assets forbeing theimpaired yearin ended December 31, 2023, an increase of $56,122
or 2.2%.2024.
Salary and wage expense for the year ended December
31, 20242025 was $2,932,948$2,993,692 compared to $3,817,508$2,932,948 for the year ended December 31, 2023,2024, aan decreaseincrease of $884,560only $60,744 or 23.2%. The decrease is
due to a decrease in headcount.2.1%.
Professional fees for the year ended December
31, 20242025 were $1,939,542$935,076 compared to $2,336,785$1,939,542 for the year ended December 31, 2023,2024, a decrease of $397,243$1,004,466 or 17%.51.8%. Professional fees
consist mainly of audit and legal fees. The decrease in the current period is due to a decrease in legal fees.fees as the Company’s legal
related activity for ongoing litigation was much less in the current year.
General and Administrative (“G&A”) expense for the year ended December 31, 2025, was $1,877,693 compared to $2,861,300 for the year ended December 31, 2024, a decrease of $983,607 or 34.4%. The decrease was mainly due to an approximately $324,000 decrease in bank fees. During the current year the Company closed its risk portfolio account which resulting in a large decrease to the bank fees. We had a decrease of $116,000 for outside services due to fewer service providers used for Dmint. We had a $112,000 decrease in compliance related fees. In the prior year we incurred fees for money transition licenses for OLBit. We did not have these expenses in 2025. We had a $64,000 decrease in rent expense as a result of the new lease in 2025 and we had a decrease of $230,000 in insurance expense due to the renewal of policies in the 2025.
General and Administrative (“G&A”)
expense for the year ended December 31, 2024, was $2,861,300 compared to $7,078,947 for the year ended December 31, 2023, a decrease of
$4,217,647 or 59.6%. The decrease was mainly due to a $788,700 decrease in banking fees, a decrease of $295,500 in Computer & Software
Expenses, a $353,700 decrease in Utility Expense and a $550,450 decrease in contracted services.
For the year ended December 31, 2024, we had total
impairment expense
of $2,962,469 related to Dmint’sDMINT’s exclusive agreement to purchase natural gas. For the year ended December 31, 2023, we had total
impairment expense of $12,902,788. $12,642,857 was for the write down of the Acquired Merchant Portfolio. There was also an impairment
of $259,931 related to the Bitcoin miners owned by DMINT.
For the year ended December 31, 2025, we incurred interest expense for related parties of $395,926 and other expense of $85,000. We also recognized a loss on the extinguishment of accounts payable of $52,000 and a loss on conversion of accrued salaries and loans payable to related party of $175,763. For the year ended December 31, 2024, we recognized a realized gain from the sale of bitcoin of $222,751 and an realized gain on investment of $274,731. We also had interest expense of $45,942.
For the year ended December 31, 2024, we recognized
a realized gain from the sale of bitcoin of $222,751 and an unrealized gain on investment of $274,731. We also had interest expense of
$45,942. For the year ended December 31, 2023, we recognized a realized gain from the sale of bitcoin of $288,584 and an unrealized gain
on investment of $23,662. We also had other income of $40,320 and interest expense of $148,483.
In addition, we recognized a $775,000 deemed dividend for preferred stock and a $30,630 for preferred dividends for a net loss applicable to common shareholders of $6,679,681.
For the year ended December 31, 2025, we used $1,330,383 of cash in operating activities, which included our net loss offset by $507,392 for depreciation expense, $800,040 for stock-based compensation, loss on conversion related party debt of $175,763, Loss on settlement of accounts payable and debt of $52,000, other expense of $25,250 and net changes in operating assets and liabilities of $2,983,365.
For the year ended December 31, 2023, we received $2,046,922 of cash
in operating activities, which included our net loss offset by $6,732,132 for amortization and depreciation expense, $727,758 for stock-based
compensation, impairment expense of $12,902,788, a realized gain of $288,584 from the sale of bitcoin and an unrealized gain on investment
of $23,662 and net changes in operating assets and liabilities of $5,274,238.
For the year ended December 31, 2025, we had no investing activities.
For the year ended December 31, 2023, we used
$2,080,113 of cash used for investing activities. We used $1,225,148 for property and equipment, $4,965 for purchase of intangible assets
and $850,000 the purchase of an 80.01% interest in Cuentas SDI, LLC.
For the year ended December 31, 2025, we received net cash of $1,318,724 from financing activities as a result of receiving $560,832 from our CEO and $887,786 from the sale of common stock, and a decrease in our cash overdraft of $4,731. We made repayments on our note payable of $38,838 and to our CEO of $86,325.
For the year ended December 31, 2023, we used
net cash of $221,829 in financing activities as a result of a cash overdraft obtained in an acquisition of $8,050 and payments on a note
payable of $226,457 along with $12,678 in advances from related parties.
During the six months ended June 30, 2025, all amounts owed to Mr. Yakov at that time were converted into shares of common stock.
The Company has reviewed its cash flow activity
during 20242025 and projected
cash flow forecast for 20252026 and 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.
Based on projected cash to
be used in operations to be offset by expected proceeds from capital raises, the ATM program and loan proceeds
from Ronny Yakov under the loan agreement,
the Company believes it has sufficient liquidity in order to sustain operations for at least
the twelve months following the filing of
this Annual Report. During the first quarter of 2026, the Company raised capital through a direct
offering and a PIPE. The total cash to the Company from these transactions totaled over $3.7M. The Company believes this is sufficient
to cover operations for the next 12 months. However, management recognizes that it may be required to obtain additional resources
to successfully execute its
business plans. No assurances can be given that management will be successful in raising additional capital,
if needed, or on acceptable
terms. WithoutManagement raisingbelieves additionalthat capital,the eitherCompany’s viaexisting additionalcash resources, together with expected capital raises,
potential advances made pursuant tounder the ATM,ATM program, related party loanfinancing, or fromand other available funding sources,
there iswill substantialbe doubt about the Company’s abilitysufficient to continue as a going concernsupport
operations through March 31, 2026. The accompanying consolidated
financial statements have been prepared assuming that the Company will continue as a going concern. This basis of presentation contemplates
the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business.2027.
Refer to Note 2 of our consolidated financial statements contained elsewhere in this Annual Report on Form 10-K for a summary of our significant accounting policies and recently adopting and issued accounting standards.
What changed in the latest 10-Q
Risk Factors
New heading “Our planned tokenized offering application is in the development stage, may not be launched as anticipated, and exposes us to legal, regulatory and operational risks.”
Largest changes
“As described in Note 1 to our condensed consolidated financial statements, we are developing an application intended to enable issuers using our CrowdPay platform to generate tokenized offerings, provide investors with additional payment options and access live AI chatbot support. The application is in the development stage and has not been launched. We currently expect to release an initial update during the fourth quarter of 2026 and to complete a full launch in early 2027, but the timing may change and the application may not be launched at all. …”see in full comparison
“Our planned tokenized offering application is in the development stage, may not be launched as anticipated, and exposes us to legal, regulatory and operational risks.”see in full comparison
Full comparison: every changed paragraph (3)
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item. We are nonetheless voluntarily providing the following risk factor.
Our planned tokenized offering application is in the development stage, may not be launched as anticipated, and exposes us to legal, regulatory and operational risks.
As described in Note 1 to our condensed consolidated financial statements, we are developing an application intended to enable issuers using our CrowdPay platform to generate tokenized offerings, provide investors with additional payment options and access live AI chatbot support. The application is in the development stage and has not been launched. We currently expect to release an initial update during the fourth quarter of 2026 and to complete a full launch in early 2027, but the timing may change and the application may not be launched at all. The offer, sale and transfer of tokenized securities is subject to evolving and uncertain regulation under federal and state securities laws, including registration, broker-dealer, transfer agent, custody and, in certain circumstances, money transmission requirements, and regulators have brought enforcement actions against participants in digital asset markets. The application will also depend on third-party blockchain networks, smart contracts and service providers, which expose us to risks of technical failure, cybersecurity incidents, loss of private keys and irreversible transaction errors. We also expect the application to offer stablecoin payment options provided by licensed or otherwise authorized third parties. Stablecoin payment activity is subject to a developing and uncertain federal and state regulatory framework, including the federal payment stablecoin regime and state money transmission licensing requirements, and we would depend on these providers obtaining and maintaining the licenses and authorizations necessary to support such transactions. The loss of a provider’s authorization, a change in the applicable regulatory framework, or a determination by a regulator that our own activities require licensing could require us to suspend, modify or abandon these payment options. In addition, the market for tokenized securities may not develop as we anticipate, and we may not generate meaningful revenue from the application. The occurrence of any of these events could adversely affect our business, reputation, results of operations and financial condition.
Management's Discussion & Analysis (MD&A)
New heading “Artificial Intelligence and Agentic AI Initiatives”
New heading “Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025”
Largest changes
“At June 30, 2026, the Company had cash of $1,280,226 and other current assets of $1,418,035. We have reviewed the cash flow activity during the six months ended June 30, 2026 and projected cash flow forecast for the remainder of 2026 and 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 Quarterly Report. …”see in full comparison
“Agentic AI Across Operating Functions. We are deploying, or intend to deploy, agentic AI across our operating functions. In customer support, we are using AI agents to assist with merchant onboarding inquiries, ticket triage, transaction disputes and first-line support, with escalation of exceptions to our personnel. In risk and compliance, we are using AI agents to monitor merchant transaction patterns, merchant category code classification, MATCH list exposure and know-your-customer and anti-money laundering signals in order to surface anomalies for review. …”see in full comparison
“Expanded Engineering Team and “Agentic Coding.” Beginning in 2026, we transitioned our entire software development team to an artificial intelligence-assisted model for developing and maintaining our applications, commonly referred to as “Agentic Coding” or “vibe coding,” a software development methodology in which engineers direct and review code generated by large language model tools rather than authoring code directly. The transition applies across both of our business segments. …”see in full comparison
“During the six months ended June 30, 2026 and continuing through the date of this Quarterly Report, we have been re-engineering our operations around artificial intelligence (“AI”), including agentic AI — autonomous software agents that are designed to plan, decide and execute tasks with limited human intervention. Our objective is to operate as an AI-native financial technology company. …”see in full comparison
“Our Fintech Services span credit and debit card acceptance, ACH payments, real-time payments, digital wallets, PayPal integration and payment terminal and hardware rentals, and are delivered principally through SecurePay™, our proprietary payment gateway, through which card, ACH and real-time payment transactions are routed and authorized and which supports 3-D Secure authentication on card-not-present transactions. We market our AI-enabled merchant applications under the iStores AI and ShopFast AI brands. …”see in full comparison
Full comparison: every changed paragraph (42)
The information in this report contains forward-looking statements. All statements other than statements of historical fact made in this report are forward-looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management’s current expectations and are inherently uncertain. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, our actual results may differ significantly from management’s expectations. These risks and uncertainties include those factors described in greater detail in the risk factors disclosed in our Form 10-K for the fiscal year ended December 31, 2025 filed with the Securities and Exchange Commission. Our forward-looking statements include, among others, statements regarding our deployment of artificial intelligence and agentic AI across our applications and operating functions, the expansion of our engineering team and our adoption of “Agentic Coding” methodologies, the anticipated benefits, costs and timing of those initiatives, the anticipated timing and completion of the DMINT spin-off, the sufficiency of our capital resources and our ability to raise additional capital. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those anticipated in these forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
We
are a FinTech company that focuses on a suite
of products in the merchant services marketplace that seeks to provide integrated business
solutions to merchants throughout the United States.
We seek to accomplish this by providing merchants with a wide range of products
and services through our various online platforms, including
financial and transaction processing services. We also have products that
provide support for crowdfunding and other capital-raising initiatives.
We supplement our online platforms with certain hardware solutions
that are integrated with our online platforms. We generate revenue through two business segments, Fintech Services and Bitcoin Mining.
Our business functions
primarily through threeour wholly-owned subsidiaries, eVance, Inc., a Delaware corporation (“eVance”), OmniSoft.io,
Inc., Inc.,
a Delaware corporation (“OmniSoft”), and CrowdPay.Us, Inc., a New York corporation (“CrowdPay”), Crowd Ignition,
Inc. (“Crowd Ignition”), OLBit, Inc. (“OLBit”), Moola Cloud, LLC (“Moola Cloud”) and DMINT, Inc.
(“DMINT”), though substantially
all of our revenue has been generated from our eVance business (we began generating revenue from our OmniSoft and CrowdPay businesses
in the second half of 2019).business. We expect to build out our
OmniSoft software business and to rely more on individualized merchant services
offerings for revenue so that we are not dependent on
our revenue from our eVance business but there is no guarantee that we will be able
to do so.
Our Fintech Services span credit and debit card acceptance, ACH payments, real-time payments, digital wallets, PayPal integration and payment terminal and hardware rentals, and are delivered principally through SecurePay™, our proprietary payment gateway, through which card, ACH and real-time payment transactions are routed and authorized and which supports 3-D Secure authentication on card-not-present transactions. We market our AI-enabled merchant applications under the iStores AI and ShopFast AI brands. We also provide eCommerce development and consulting services on a project-by-project basis, including custom artificial intelligence-based development projects for merchants and other clients that are related to transaction processing and other transaction-driven activities.
On May 14, 2021, the Company formed OLBit, Inc., a wholly owned subsidiary (“OLBit”). The purpose of OLBit is to hold the Company’s assets and operate its business related to its emerging money transmission and transactional business. OLBit was previously in the process of applying for money transmission licenses in all 50 states. In June 2023, it was decided to delay the process of applying for such licenses in order to have a greater focus of financial and management resources on the Company’s payment processing business and Bitcoin mining business. The Company has since resumed that process and is preparing and submitting money transmission license applications in the states in which it intends to conduct OLBit’s lending and transactional business, while continuing to plan the scope and sequencing of those filings. Issuance of these licenses is subject to review and approval by state regulators, and there is no assurance that the Company will obtain any such license, or that it will do so on the timeline it currently anticipates.
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. DMintDMINT has a data center located in Selmer, Tennessee.
In February 2023, DMINT redeployed its mining computers from its Pennsylvania
location and focusfocused the mining efforts at the Selmer, Tennessee
location because of the lower cost of operations in the location. As
of December 31, 2025, DMINT had 1,000 computers and had 400 computers
online and mining for Bitcoin. At MarchJune 31,30, 2026, DMINT had mined 60.71
61.73 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.
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 includes approximately 31,600 locationsbodega convenience stores in theand Unitedaround States,New York and
New Jersey, 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.
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. The Agreement contains
a restrictive covenant whereby for a period of three (3) years from the closing, none of Seller, including
its any of its principals,
executives, officers, directors, managers, employees, salespersons, or entities in which such principal has
any interest, will directly
or indirectly (i) induce, attempt to induce, interfere with, disrupt or attempt to disrupt any past, present
or prospective business
relationship, solicit, market to, endeavor to obtain as a customer, or contract with any merchant in order to
provide services to such
Merchant in competition with the Company; or (ii) solicit or interfere with, disrupt or attempt to disrupt any
past, present or prospective
business relationship, contractual or otherwise any person or entity that is a party to any contract assigned
to the Company to terminate
its contractual or business relationship with the Company.
Artificial Intelligence and Agentic AI Initiatives
During the six months ended June 30, 2026 and continuing through the date of this Quarterly Report, we have been re-engineering our operations around artificial intelligence (“AI”), including agentic AI — autonomous software agents that are designed to plan, decide and execute tasks with limited human intervention. Our objective is to operate as an AI-native financial technology company. Our AI strategy is organized around three principal initiatives, each of which is described below, and includes the implementation of agentic commerce and automation services across our Fintech Services platforms. These initiatives are in varying stages of design, development and implementation, and there is no assurance that any of them will be completed on the timelines we currently anticipate, or at all, or that they will produce the operational or financial benefits we expect.
AI Embedded in Our Applications. We are working to add AI capabilities to our customer-facing and internal applications, including our SecurePay™ payment gateway, our ShopFast AI eCommerce platform, iStores AI and the Moola Cloud merchant network. The capabilities we are developing or evaluating include real-time fraud detection, intelligent transaction routing, automated chargeback management, dynamic risk scoring and conversational AI interfaces for merchants and consumers. We are also developing an application that will enable issuers using our CrowdPay platform to generate tokenized offerings, provide investors with additional payment options and access live AI chatbot support, for which we expect to release an initial update during the fourth quarter of 2026 and to complete a full launch in early 2027, including support for stablecoin payment options provided through licensed or otherwise authorized third-party providers; a new point-of-sale solution for the Moola Cloud merchant network that will combine payment acceptance with a self-service website builder, enabling merchants to create and maintain their own eCommerce storefronts alongside their in-store operations, and that has been upgraded with our recent services and is ready for implementation at merchant locations; and custom AI-based development projects for merchants and other clients that are related to transaction processing and other transaction-driven activities. Certain of these capabilities remain in development and have not yet been deployed to merchants. See Note 1 to our condensed consolidated financial statements and Item 1A, “Risk Factors.”
Agentic AI Across Operating Functions. We are deploying, or intend to deploy, agentic AI across our operating functions. In customer support, we are using AI agents to assist with merchant onboarding inquiries, ticket triage, transaction disputes and first-line support, with escalation of exceptions to our personnel. In risk and compliance, we are using AI agents to monitor merchant transaction patterns, merchant category code classification, MATCH list exposure and know-your-customer and anti-money laundering signals in order to surface anomalies for review. In underwriting and merchant boarding, we are developing AI-driven boarding workflows intended to support same-day merchant approval through SecurePay, including background checks, sanctions screening and PCI compliance verification. In accounting and finance, we are developing AI agents intended to automate invoice processing, reconciliation, residual calculations, expense categorization and routine financial close activities. In sales and independent sales organization (“ISO”) operations, we are developing AI assistants intended to help ISOs track merchant residuals, model pricing scenarios and identify potential upsell opportunities. Human review and oversight remain in place for underwriting, risk, compliance and financial reporting activities, and our internal control over financial reporting is not dependent on these tools.
Expanded Engineering Team and “Agentic Coding.” Beginning in 2026, we transitioned our entire software development team to an artificial intelligence-assisted model for developing and maintaining our applications, commonly referred to as “Agentic Coding” or “vibe coding,” a software development methodology in which engineers direct and review code generated by large language model tools rather than authoring code directly. The transition applies across both of our business segments. We are also adding engineering personnel focused on agentic AI development, and we are training our existing developers to work in this manner, with AI coding agents supporting scaffolding, refactoring, testing and documentation, and we are recruiting new engineers based in part on their ability to build and orchestrate agentic AI systems. We expect that these methods may compress development cycles, reduce engineering cost per feature delivered and accelerate our ability to deliver merchant-specific solutions, although we have limited operating history with these methods and cannot assure you that these expected benefits will be realized.
Our AI initiatives are in the early stages of implementation and did not have a material effect on our results of operations for the six months ended June 30, 2026. Costs incurred in connection with these initiatives to date have consisted primarily of personnel and third-party software and services costs and are included within salaries and wages and general and administrative expenses in our condensed consolidated statements of operations. We expect these costs to increase as we hire additional engineering personnel and expand our use of third-party AI models and tools. To date, we have not recognized revenue that is separately attributable to these initiatives.
The use of AI and agentic AI in a regulated payments business presents risks, including the risk of inaccurate or unreliable model outputs, algorithmic bias, data privacy and data security exposure, dependence on third-party model providers, and evolving federal and state regulation and card network rules governing the use of automated decision-making in underwriting, risk and compliance functions. Any failure of these systems, or any determination by a regulator, card network or sponsor bank that our use of them is non-compliant, could require us to modify or discontinue these initiatives and could adversely affect our business, results of operations and financial condition.
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 MarchJune 31,30, 2026.
Three
Months Ended MarchJune 31,30, 2026 Compared
to the Three Months Ended MarchJune 31,30, 2025
For the three months ended MarchJune 31,30, 2026, we had total revenue
of of
$1,656,344$1,279,251 compared to $2,321,536$2,267,191 of revenue for the three months ended MarchJune 31,30, 2025, a decrease of $665,192$987,940 or 28.7%.43.6%. In the current
period we earned $1,517,771$1,169,910 in transaction and processing fees, $25,936$22,791 in other revenue from monthly recurring subscriptions, $48,220$73,241
of revenue from the Cryptocurrency Mining segment and $64,417$13,309 of revenue from the sale of digital products. InFor the priorthree periodmonths ended
June 30, 2025, we earned
$2,058,277 $2,096,342 in transaction and processing fees, $12,124$4,563 in merchant equipment rental and sales, $72,637$70,359 in other
revenue from monthly recurring
subscriptions, $85,482$60,190 of revenue from the Cryptocurrency Mining segment and $93,016$35,737 of revenue from the
sale of digital products. We
had a decrease in revenue primarily due to a decrease in revenue related to Moola Cloud, LLC, as the Company
transitions to new vendors
to obtain better pricing and is working to acquire new vendors to replace others that have gone out of business.
In addition, we
had a decrease of revenue from the Cryptocurrency Mining, due to the decline in the value of Bitcoin.
For
the three months ended MarchJune 31,30, 2026, we
had processing and servicing costs of $1,481,251$1,063,595 compared to $1,808,814$1,964,314 of processing and servicing
costs for the three months ended March
31,June 30, 2025, a decrease of $327,563$900,719 or 18.1%.45.9%. Processing and servicing costs decreased in conjunction
with the decreased revenue and merchant
attrition.
Amortization
and depreciation expense for the three months ended
March 31,June 30, 2026 was $0$3,412 compared to $3,972$0 for the three months ended MarchJune 31,30, 2025,
an a decreaseincrease of $3,972.$3,412. We recorded amortization expense
on our merchant portfolio, trademarks and natural gas purchase rights. The
decrease in the current period is due to most of the
assets being fully amortized in 2024 and the remainder in Q1 2025.
Depreciation
expense for our Bitcoin Mining Segment was $3,410 for
the three months ended March 31, 2026, compared to $258,349,$0 for the three months ended MarchJune 31,30, 2026, compared to $120,967, for the three months ended
June 30, 2025, a decrease of $254,938$120,967. or 98.7%.
The decrease in the current period is due to assets being impaired and/or fully depreciated in
prior periods.
Salary and wage expense for the three months ended
June March 31,30, 2026,
was $669,437$812,600 compared to $531,356$1,052,614 for the three months ended MarchJune 31,30, 2025, ana increasedecrease of $138,081$240,014 or 26%.22.8%. In the current
period, we
granted shares of common stock to our CEO for total non-cash expense of $130,120$96,200 in accordance with his new employment agreement.
This increase to wage expense was offset with fewer employees, and therefore lower wage expense in 2026. The decrease in employees will
not have an effect on future earnings. If the Company feels the employees/positions need to be replaced, then the Company will hire for
the position.
Professional
fees for the three months ended March
31,June 30, 2026, were $142,405$126,264 compared to $77,573$334,566 for the three months ended MarchJune 31,30, 2025, ana increase decrease
of $64,832$208,302 or 83.6%.62.3%. Professional fees
consist mainly of audit and legal fees. The increasedecrease in the current period is due to ana increase decrease
in legal fees.
General
and administrative expenses for the three
months ended MarchJune 31,30, 2026, was $629,729$533,248 compared to $490,151$491,476 for the three months ended March 31,June
30, 2025, an increase of $139,578$41,772 or 28.5%.
8.5%. The increase was mainly due to an increase of approximately $40,100 in utility expense and insurance expense of $69,300.expense.
For the three months ended MarchJune 31,30, 2026, the Company recognized
total total
other income of $192,306,$205,062, consisting of $100$75,902 of interest expense,expense and an unrealized loss in the fair value of cryptocurrency of
$20,648. This was offset by a $81,406$301,612 gain on the settlement of accounts payable through the issuance
of common stock, and a $111,000 gain on the settlement of debt.stock. For the three
months ended MarchJune 31,30, 2025, we had total other expense
expenses of $240,319,$427,568. whichWe consisted ofincurred interest expense for related parties of $225,319$169,805 and
other expense of $15,000.$30,000. We also recognized a loss on the extinguishment of debt of $52,000 and a loss on conversion of accrued salaries
and loans payable of $175,763.
Our net loss for the three months ended March
31,June 30, 2026, was $1,077,582 $1,054,806
compared to $1,088,998$2,124,314 for the three months ended MarchJune 31,30, 2025. This was a decrease in our net loss of $11,416.$1,069,508.
Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025
For the six months ended June 30, 2026, we had total revenue of $2,935,595 compared to $4,588,727 of revenue for the six months ended June 30, 2025, a decrease of $1,653,132 or 36%. In the current period we earned $2,687,681 in transaction and processing fees, $48,727 in other revenue from monthly recurring subscriptions, $121,461 of revenue from the Cryptocurrency Mining segment and $77,726 of revenue from the sale of digital products. For the six months ended June 30, 2025, we earned $4,154,619 in transaction and processing fees, $16,687 in merchant equipment rental and sales, $142,996 in other revenue from monthly recurring subscriptions, $145,672 of revenue from the Cryptocurrency Mining segment and $128,753 of revenue from the sale of digital products. We had a decrease in revenue primarily due to a decrease in revenue related to Moola Cloud, LLC, as the Company transitions to new vendors to obtain better pricing and is working to acquire new vendors to replace others that have gone out of business. In addition, we had a decrease of revenue from the Cryptocurrency Mining, due to the decline in the value of Bitcoin.
For the six months ended June 30, 2026, we had processing and servicing costs of $2,544,846 compared to $3,773,128 of processing and servicing costs for the six months ended June 30, 2025, a decrease of $1,228,282 or 32.6%. Processing and servicing costs decreased in conjunction with the decreased revenue and merchant attrition.
Amortization and depreciation expense for the six months ended June 30, 2026 was $6,822 compared to $3,972 for the six months ended June 30, 2025, an increase of $2,850. We recorded amortization expense on our merchant portfolio, trademarks and natural gas purchase rights. The increase in the current period is due to all of those assets being fully amortized in 2024 and the remainder in Q1 2025.
Depreciation expense for our Bitcoin Mining Segment was $0 for the six months ended June 30, 2026, compared to $379,316, for the six months ended June 30, 2025, a decrease of $379,316. The decrease in the current period is due to assets being impaired and/or fully depreciated in prior periods.
Salary and wage expense for the six months ended June 30, 2026, was $1,482,037 compared to $1,583,970 for the six months ended June 30, 2025, a decrease of $101,933 or 6.4%. In the current period, we granted shares of common stock to our CEO for total non-cash expense of $226,320 in accordance with his new employment agreement. This increase to wage expense was offset with fewer employees, and therefore lower wage expense in 2026.
Professional fees for the six months ended June 30, 2026, were $268,669 compared to $412,139 for the six months ended June 30, 2025, a decrease of $143,470 or 34.8%. Professional fees consist mainly of audit and legal fees. The decrease in the current period is due to a decrease in legal fees.
General and administrative expenses for the six months ended June 30, 2026, was $1,162,977 compared to $981,627 for the six months ended June 30, 2025, an increase of $181,350 or 18.5%. The increase was mainly due to an increase of utility expense and insurance expense.
For the six months ended June 30, 2026, the Company recognized total other income of $397,368, consisting of $76,002 of interest expense for related parties and an unrealized loss in the fair value of cryptocurrency of $20,648. This was offset by a $494,018 gain on the settlement of accounts payable through the issuance of common stock. For the six months ended June 30, 2025, we incurred interest expense for related parties of $395,124 and other expense of $45,000. We also recognized a loss on the extinguishment of debt of $52,000 and a loss on conversion of accrued salaries and loans payable of $175,763.
Our net loss for the six months ended June 30, 2026, was $2,132,388 compared to $3,213,312 for the six months ended June 30, 2025. This was a decrease in our net loss of $1,080,924.
For
the threesix months ended MarchJune 31,30, 2026, we
used $1,338,207$2,397,514 of cash in operating activities, which included our net loss of $1,077,582$2,132,388 offset
by non-cash reconciling items of
$3,410 prepaid,$6,822 $130,120for depreciation, $226,320 for stock compensation expense for shares issuedissued, an unrealized
loss for the fair value of cryptocurrency of $20,648 and a $192,406$494,018 gain on the settlement of accounts payable and debt.
There were net
changes in operating assets and liabilities of $201,749.$24,898.
For
the threesix months ended MarchJune 31,30, 2025, we
used $155,842$1,175,615 of cash in operating activities, which included our net loss of $1,088,998$3,213,312 offset
by $262,073$867,196 forof amortizationnon-cash andreconciling depreciation
expense, $423 for lease expense, $33,875 for stock based compensation expenseitems and net changes in operating assets and liabilities of $636,785.$1,170,501.
For the threesix months ended MarchJune 31,30, 2026, we received
received net cash of $3,650,153$3,661,963 in financing activitiesactivities. asWe areceived result$14,024 offrom receiving $2,500loans from our CEO, $2,619,999 from the sale of prefunded warrants
and contributed capital of $9,940. We also received $1,097,000 from the sale of common
stock, $2,619,713 from the salenet of prefunded$203,000 warrantsoffering andfees. contributedThe capitalshares
were ofsold $9,940.at $0.60 per share. We made repayments on our note payable of $34,000
and to our CEO of $45,000.
For the threesix months ended MarchJune 31,30, 2025, we received
received net cash of $157,746$1,150,841 infrom financing activities as a result of receiving $18,881$346,073 from our CEO and $187,913$887,786 from the sale of common stock,
stock, and ana increasedecrease in our cash overdraft of $28,671.$5,299. We made repayments on our note payable of $38,838 and to our CEO of $38,881.
At June 30, 2026, the Company had cash of $1,280,226 and other current assets of $1,418,035. We have reviewed the cash flow activity during the six months ended June 30, 2026 and projected cash flow forecast for the remainder of 2026 and 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 Quarterly Report. Based on projected cash to be used in operations to be offset by expected proceeds from capital raises, the ATM program and loan proceeds from Ronny Yakov under the loan agreement, the Company believes it has sufficient liquidity in order to sustain operations for at least the twelve months following the filing of this Quarterly Report. However, management recognizes that it may be required to obtain additional resources to successfully execute its business plans. No assurances can be given that management will be successful in raising additional capital, if needed, or on acceptable terms. Management believes that the Company’s existing cash resources, together with expected capital raises, potential advances under the ATM program, related party financing, and other available funding sources, will be sufficient to support operations through August 14, 2027.
AtOn MarchAugust 31,7, 2026, the Company had cash of $2,327,723
and negative working capital of $3,142,060 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 havingas anset aggregate offeringforth
amount of up to $15,000,000 (the “Shares”) during the term ofin 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 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.
On August 12, 2024, the Company entered into an
agreement with Yakov Holdings, LLC, an entity controlled by Mr. Yakov whereby the Yakov Holdings, LLC committed to loan to the Company
up to Five Million Dollars ($5,000,000) (the “Yakov Holdings, LLC Loan”). The Yakov Holdings, LLC Loan is revolving in nature,
allowing the Company to borrow, repay, and re-borrow amounts under the terms and conditions set forth herein, provided that the total
outstanding amount shall not exceed Five Million Dollars ($5,000,000). The interest rate of the Yakov Holdings, LLC Loan is twelve percent
(12%) and it matures on August 12, 2027. In addition, the Yakov Holdings, LLC Loan is secured by a first priority security interest for
the benefit of Yakov Holdings, LLC over all of the assets of the Company.
During
the threesix months ending MarchJune 31,30, 2026,
Mr. Yakov advanced the Company $2,500$14,024 and received repayments of $45,000. As of MarchJune 31,30, 2026 and
December 31, 2025, the amount due to
Yakov Holdings, LLC is $124,815$136,339 and $167,315, respectively.
OLB insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding OLB (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 92,502 | $35.2K | 0.0% | Added 399% |