What changed in this filing

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Item 1. Financial Statements

2021-05-13 compared with 2020-11-12 · 606 added, 1206 removed, 212 unchanged (90% of the section changed)

Financial Statements

INDEX TO FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets as of September 30, 2020 (unaudited) and December 31, 2019

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2020 and 2019 (unaudited)

TO FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets as of March 31, 2021 (unaudited) and December 31, 2020

Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and 2020 (unaudited)

Condensed Consolidated Statements of Stockholders’

Equity (Deficit) for the Three and Nine Months Ended September 30, 2020, and 2019 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019 (unaudited)

Equity (Deficit) for the Three Ended March 31, 2021, and 2020 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020 (unaudited)

Notes to the Condensed Consolidated Financial Statements (unaudited)

The OLB Group, Inc.

OLB Group, Inc.

and Subsidiaries

Condensed Consolidated

Balance Sheets

September 30,

Current Assets:

6 unchanged sentences

Intangible assets, net

Deferred offering costs

Operating lease right to use asset

Operating lease right-of-use asset

Other long-term assets

LIABILITIES AND STOCKHOLDERS’

EQUITY (DEFICIT)

Current Liabilities:

Accounts payable

Accrued expenses –

related party

Accrued expenses

1 unchanged sentence

current portion

Deferred revenue

Note payable –

current portion

Note payable –

related parties –

current portion

Total Current Liabilities

Long Term Liabilities:

Note payable –

related party

Notes payable, net of current portion

5 unchanged sentences

Equity (Deficit):

Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding

Series A Preferred stock, $0.01 par value, 10,000

shares authorized, 4,633 and no shares issued and outstanding, respectively

Preferred stock, ($0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding at March 31, 2021 and December 31, 2020)

Series A Preferred stock, ($0.01 par value, 10,000 shares authorized, 4,633 shares issued and outstanding at March 31, 2021 and December 31, 2020)

Common stock, $0.0001 par value;

200,000,000 shares authorized, 6,160,054 and 5,411,905 shares issued and outstanding, respectively

200,000,000 shares authorized, 7,114,774 and 6,170,054 shares issued and outstanding at March 31, 2021 and December 31, 2020

Additional paid-in capital

6 unchanged sentences

EQUITY (DEFICIT)

The accompanying notes are an integral

part of these unaudited condensed consolidated financial statements.

The OLB Group, Inc.

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

OLB Group, Inc.

and Subsidiaries

Condensed Consolidated Statements

of Operations

Statements of Operations

For the Three Months Ended

September 30,

For the Nine Months Ended

September 30,

Transaction and processing fees

14 unchanged sentences

$ (1,099,857 )

$ (1,281,642 )

Net loss per share, basic and diluted

Weighted average shares outstanding, basic and diluted

The accompanying notes are an integral

part of these unaudited condensed consolidated financial statements.

The OLB Group, Inc.

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

OLB Group, Inc.

and Subsidiaries

Condensed Consolidated Statements

of Stockholders’

Statements of Stockholders’

Equity (Deficit)

For the Nine Months ended September 30,

2020 and 2019

the Three Months ended March 31, 2021 and 2020

Preferred Stock

1 unchanged sentence

$ (20,628,606 )

$ (2,800,400 )

Stock based compensation

Common stock issued for the exercise of Warrants

Balance at March 31, 2021

$ (21,728,463 )

Stock based compensation

Balance at June 30, 2020

(19,904,495 )

Stock based compensation

Conversion of debt –

related party

Common stock units sold for cash

Warrants sold for cash

Warrants converted to common stock

Common stock issued to directors

Balance at September 30, 2020

$ (20,561,853 )

Preferred Stock

Balance at January 1, 2020

4 unchanged sentences

$ (19,394,086 )

Stock based compensation

Balance at June 30, 2019

$ (3,268,011 )

Stock based compensation

Balance at September 30, 2019

$ (18,790,109 )

$ (2,804,893 )

The accompanying notes are an integral

part of these unaudited condensed consolidated financial statements.

The OLB Group, Inc.

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

OLB Group, Inc.

and Subsidiaries

Condensed Consolidated Statements of

For the Nine Months Ended

September 30,

Statements of Cash Flows

For the Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

3 unchanged sentences

Stock based compensation

Common stock issued for services –

related party

Operating lease expense

10 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of intangible assets

Net Cash used in Investing Activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from notes payable –

related party

Proceeds from note payable

Payments on note payable

Warrants converted to common stock

Proceeds from sale of common stock units

Proceeds from sale of warrants

Proceeds from exercise of warrants

Payment of offering costs

Net Cash provided by Financing Activities

Net Cash used in Financing Activities

Net Change in Cash

2 unchanged sentences

Cash Paid For:

Supplemental non-cash disclosure:

Establish operating lease asset and related liability

The accompanying notes are an integral

part of these unaudited condensed consolidated financial statements.

The OLB Group, Inc.

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

OLB Group, Inc.

and Subsidiaries

Notes to the Condensed Consolidated Financial

September 30, 2020

NOTE 1 –

The OLB Group, Inc.

to the Consolidated Financial Statements

OLB Group, Inc.

(“OLB”

the “Company”) was incorporated in the State of Delaware on November 18, 2004 and provides services through its wholly-owned

subsidiaries.

The Company provides integrated financial

and transaction processing services to businesses throughout the United States.

Through its eVance Capital, Inc.

subsidiary (“eVance”),

the Company provides an integrated suite of third-party merchant payment processing services and related proprietary software enabling

products that deliver credit and debit card-based internet payment processing solutions primarily to small and mid-sized merchants

operating in physical “brick and mortar”

business environments, on the internet and in retail settings requiring both

wired and wireless mobile payment solutions.

eVance operates as an independent sales organization (“ISO”) generating

individual merchant processing contracts in exchange for future residual payments.

As a wholesale ISO, eVance has a direct contractual

relationship with the merchants and takes greater responsibility in the approval and monitoring of merchants than do retail ISOs

and as a result, receives additional consideration for this service and risk.

the “Company”) was incorporated in the State of Delaware on November 18, 2004 and provides

services through its wholly-owned subsidiaries.

Company provides integrated financial and transaction processing services to businesses throughout the United States.

Through its eVance

Capital, Inc.

subsidiary (“eVance”), the Company provides an integrated suite of third-party merchant payment processing

services and related proprietary software enabling products that deliver credit and debit card-based internet payment processing solutions

primarily to small and mid-sized merchants operating in physical “brick and mortar”

business environments, on the internet

and in retail settings requiring both wired and wireless mobile payment solutions.

eVance operates as an independent sales organization

(“ISO”) generating individual merchant processing contracts in exchange for future residual payments.

As a wholesale ISO,

eVance has a direct contractual relationship with the merchants and takes greater responsibility in the approval and monitoring of merchants

than do retail ISOs and as a result, receives additional consideration for this service and risk.

The Company’s Securus365, Inc.

subsidiary operates

as a retail ISO and receives residual income as commission for merchants it places with third party processors.

CrowdPay.us, Inc.

(“CrowdPay”)

is a Crowdfunding platform used to facilitate a capital raise anywhere from $1,000,0000 -$50,000,000 of various types of securities

under Regulation D, Regulation Crowdfunding, Regulation A and the Securities Act of 1933.

subsidiary operates as a retail ISO and receives residual income as commission for merchants it places with third party processors.

(“CrowdPay”) is a Crowdfunding platform used to facilitate a capital raise anywhere from $1,000,0000 -$50,000,000 of

various types of securities under Regulation D, Regulation Crowdfunding, Regulation A and the Securities Act of 1933.

To date, the activities

of this subsidiary have been nominal.

(“OmniSoft”) operates a software platform for small merchants.

The Omnicommerce applications work on an iPad, mobile

device and the web and allows you to sell a store’s products in a physical, retail setting.

To date, the activities of this subsidiary

have been insignificant.

OmniSoft.io, Inc.

(“OmniSoft”)

operates a software platform for small merchants.

The Omnicommerce applications work on an iPad, mobile device and the web and

allows you to sell a store’s products in a physical, retail setting.

To date, the activities of this subsidiary have been

insignificant when compared to the overall business.

The Company also provides ecommerce development

and consulting services on a project by project basis.

COVID-19 Impact

On January 30, 2020, the World Health Organization

declared the COVID-19 (coronavirus) outbreak a “Public Health Emergency of International Concern”

and on March 10,

2020, declared it to be a pandemic.

The virus and actions taken to mitigate its spread have had and are expected to continue to

have a broad adverse impact on the economies and financial markets of many countries, including the geographical areas in which

the Company operates.

In response to the pandemic, the Company is working with merchants to address potential changes to the purchase

patterns of consumers.

In addition, it is focusing on servicing merchants that sell products with an extended delivery time frame,

that have products that are paid for in advance, and that work in the catering, ticketing, limo and travel related businesses which

have been directly impacted by the social distancing requirement of the pandemic.

have been nominal when compared to the overall business.

Company also provides ecommerce development and consulting services on a project by project basis.

January 30, 2020, the World Health Organization declared the COVID-19 (coronavirus) outbreak a “Public Health Emergency of International

Concern”

and on March 10, 2020, declared it to be a pandemic.

The virus and actions taken to mitigate its spread have had and are

expected to continue to have a broad adverse impact on the economies and financial markets of many countries, including the geographical

areas in which the Company operates.

In response to the pandemic, the Company has been working with merchants to address potential changes

to the purchase patterns of consumers.

In addition, it has been focusing on servicing merchants that sell products with an extended delivery

time frame, that have products that are paid for in advance, and that work in the catering, ticketing, limo and travel related businesses

which have been directly impacted by the social distancing requirement of the pandemic.

Further, for those of the Company’s employees

that are able to perform their job remotely, the Company has implemented a “remote work”

policy and provided employees

with the technology necessary to continue to do their jobs from home and for those employees that are unable to perform their job

from a remote location, the Company has taken steps to ensure appropriate distancing and added sanitizing stations along with requiring

frequent hand washing and work station cleaning.

At September 30, 2020, most employees were no longer working remotely.

that are able to perform their job remotely, the Company implemented a “remote work”

policy and provided employees with the

technology necessary to continue to do their jobs from home and for those employees that are unable to perform their job from a remote

location, the Company has taken steps to ensure appropriate distancing, continue to require wearing masks in the office and added sanitizing

stations along with requiring frequent hand washing and work station cleaning.

In addition, the Company has been encouraging its employees

to get vaccinated, if possible.

At March 31, 2021, most employees were no longer working remotely and had returned to the office.

the Company continues to monitor and follow the advice of federal and state authorities.

The Company has experienced disruptions

to its business and has observed disruptions for the Company’s customers and merchants which has resulted in a decline in

transaction volume during some months.

While the volume of processing transactions by merchants in March was relatively in-line with

the Company’s expectations that the number of transactions during March would be below the prior year because states in the

United States began to implement stay-at-home orders, the number of transactions and resulting revenue was approximately

15% lower in March than in February and 30% lower in April than in March.

In May, the number of transactions increased whereby

they were 5% higher than in April, and in June, transactions were 7% higher than May and in June through September, the number

and amount of transactions continued to steadily increase whereby they are meeting expectations.

The Company’s revenue during

the period of time decreased and then increased in the amount similar to the percentage of month-to-month transaction volume.

We do estimate that the number of transactions

will continue to stay at a depressed level or further decline from the prior year, along with revenues, until the end of the COVID-19

pandemic or the response to the COVID-19 pandemic relaxes further stay-at-home restrictions and allows customers to make

more point of purchase transactions for merchants and/or more merchants provide for additional contactless and online purchase

The anticipated amount of decline from prior year is unknown, but it will be impacted until such time when consumers return

to the level of purchasing that occurred in the prior year and before the pandemic.

The Company does not anticipate that the pandemic

will continue to have a material impact on the Company’s business or liquidity.

However, additional closings and reopenings

of businesses in the future will likely result in a month over month decline and then increase similar to what occurred in March

through June 2020.

While it is unknown how long these conditions

will last and what the complete financial impact will have on the Company, the financial services and payment technology industries

in which we operate depend heavily upon the overall level of consumer, business and government spending.

A sustained deterioration

in general economic conditions resulting in less consumer, business and government spending may adversely affect our financial

performance by reducing the number or average purchase amount of transactions we process.

If our customers make fewer sales of

products and services using electronic payments, or consumers spend less money through electronic payments, whether due to the

outbreak of the COVID-19 virus, change of consumer behavior or otherwise, we will have fewer transactions to process at lower dollar

amounts, resulting in lower revenue making it reasonably possible that we are financially vulnerable to the effects of the pandemic.

If we experience lower revenue, the risk of not meeting financial covenants could exist.

NOTE 2 –

SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim condensed

consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United

States of America (“U.S.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation

Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the

United States of America (“U.S.

GAAP”).

These unaudited condensed consolidated financial statements should be read in conjunction

with the audited financial statements and footnotes for the year ended December 31, 2019 included in the Company’s Form

The results of the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected

for the full year ending December 31, 2020.

In the opinion of management, all adjustments

necessary to present fairly the financial position as of September 30, 2020 and the results of operations and cash flows presented

herein have been included in the interim financial statements.

All such adjustments are of a normal and recurring nature.

results are not necessarily indicative of results of operations for the full year.

Use of Estimates

The preparation of financial statements

in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and

liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts

of revenues and expenses during the reporting period.

preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the

reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements

and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

The Company’s

accounting estimates include the collectability of receivables, useful lives of long lived assets and recoverability of those assets,

impairment in fair value of goodwill, valuation allowances for income taxes, stock based compensation.

Principles of Consolidation

The accompanying consolidated financial

statements include the accounts of the Company and its wholly-owned subsidiaries, eVance, Securus, CrowdPay, and OMNISOFT.

significant intercompany transactions and balances have been eliminated.

The Company’s accounting estimates include the collectability of receivables, useful lives of long-lived assets and recoverability

of those assets, impairment in fair value of goodwill, valuation allowances for income taxes, stock-based compensation.

of Consolidation

accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, eVance, Securus,

CrowdPay, and OMNISOFT.

All significant intercompany transactions and balances have been eliminated.

Reclassifications

Certain reclassifications have been made

to the prior period financial information to conform to the presentation used in the financial statements for the three and nine

months ended September 30, 2020.

Net Loss per Share

Basic net loss per common share is computed

by dividing net loss by the weighted average number of shares of common stock outstanding during the period.

Diluted net loss per

common share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding

shares of common stock during the period.

The weighted average number of common shares for the three and nine months ended September

30, 2020 and 2019 does not include warrants to acquire 3,353,698 and 40,000 shares of common stock, respectively, because of their

anti-dilutive effect.

The weighted average number of common shares for the three and nine months ended September 30, 2020 and 2019

includes 112,735 and 55,257 vested options, respectively, due to the nominal exercise price of the options.

The weighted average

number of common shares for the three and nine months ended September 30, 2020 and 2019 does not include 172,437 and 223,250 unvested

options, respectively, to purchase common stock because of their anti-dilutive effect.

Revenue Recognition and Cost of Revenues

The Company receives a percentage of recurring

monthly transaction related fees comprised of credit and debit card fees charged to merchants, net of association fees, otherwise

known as Interchange, as well as certain service charges and convenience fees, for payment processing services, including authorization,

capture, clearing, settlement and information reporting of electronic transactions.

Fees are calculated on either a percentage

of the dollar volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of the transaction.

reclassifications have been made to the prior period financial information to conform to the presentation used in the financial statements

for the three months ended March 31, 2021.

Concentration

of Credit Risk

instruments that potentially expose the Company to concentration of credit risk consist primarily of cash and accounts receivable.

Company’s cash is deposited with major financial institutions.

At times, such deposits may be in excess of the Federal Deposit

Insurance Corporation insurable amount (“FDIC”).

As of March 31, 2021, the Company had $2,041,150 of cash above the FDIC’s

$250,000 coverage limit.

Loss per Share

net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during

Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock

and potentially outstanding shares of common stock during the period.

The weighted average number of common shares for the three months

ended March 31, 2021 and 2020 does not include warrants to acquire up to 2,368,978 and 40,000 shares of common stock, respectively, because

of their anti-dilutive effect.

The weighted average number of common shares for the three months ended March 31, 2021 and 2020 does not

include up to 11,112 and 225,471 options, respectively, to purchase common stock because of their anti-dilutive effect.

receivable represent contractual residual payments due from the Company’s processing partners or other customers.

Residual payments

are determined based on transaction fees and revenues from the credit and debit card processing activity of merchants for which the Company’s

processing partners pay the Company.

Based on collection experience and periodic reviews of outstanding receivables, management considers

all accounts receivable for our residual payments to be fully collectible and accordingly, no allowance for doubtful accounts is required;

however, CrowdPay has a recorded an allowance of approximately $38,000 as of both March 31, 2021 and December 31, 2020, respectively.

for Chargeback Losses

between a cardholder and a merchant periodically arise as a result of, among other things, cardholder dissatisfaction with merchandise

quality or merchant services.

Such disputes may not be resolved in the merchant’s favor.

In these cases, the transaction is “charged

to the merchant, which means the purchase price is refunded to the customer through the merchant’s bank and charged

to the merchant.

If the merchant has inadequate funds, the Company must bear the credit risk for the full amount of the transaction.

The Company evaluates the risk for such transactions and estimates the potential loss for chargebacks based primarily on historical experience

and records a loss reserve accordingly.

Recognition and Cost of Revenues

Company receives a percentage of recurring monthly transaction related fees comprised of credit and debit card fees charged to merchants,

net of association fees, otherwise known as Interchange, as well as certain service charges and convenience fees, for payment processing

services, including authorization, capture, clearing, settlement and information reporting of electronic transactions.

Fees are calculated

on either a percentage of the dollar volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of

the transaction.

In the case of “wholesale”

residual revenue in which the Company has a direct contractual relationship with the merchant,

bears risk of chargebacks and performs underwriting on the merchants, the Company records the full discount charged to the merchant

as revenue and the related interchange and other processing fees as expenses.

In cases of residual revenue where the Company is

not responsible for merchant underwriting and has no chargeback liability and has no or limited contractual relationship with the

residual revenue in which the Company has a direct contractual relationship with

the merchant, bears risk of chargebacks and performs underwriting on the merchants, the Company records the full discount charged to

the merchant as revenue and the related interchange and other processing fees as expenses.

In cases of residual revenue where the Company

is not responsible for merchant underwriting and has no chargeback liability and has no or limited contractual relationship with the

merchant, the Company records the amount it receives from the processor net of interchange and other processing fees as revenue.

Disaggregation of Revenue

The following table presents the Company’s

revenue disaggregated by revenue source:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Disaggregation

following table presents the Company’s revenue disaggregated by revenue source:

For the Three Months Ended

Revenue from contracts with customers:

3 unchanged sentences

Total Revenue

The Company recognizes revenue under ASC

606, “Revenue from Contracts with Customers”

Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers”

(“ASC 606”).

The Company determines revenue recognition through

the following steps:

Identification of a contract with a customer;

Identification of the performance obligations in the contract;

Determination of the transaction price;

Allocation of the transaction price to the performance obligations in the contract;

Recognition of revenue when or as the performance obligations are satisfied.

Revenue is recognized when control of the

promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be

entitled to in exchange for those goods or services.

Shipping and handling activities associated with outbound freight after control

over a product has transferred to a customer are accounted for as a fulfillment activity and recognized as revenue at the point

in time at which control of the goods transfers to the customer.

As a practical expedient, the Company does not adjust the transaction

price for the effects of a significant financing component if, at contract inception, the period between customer payment and the

transfer of goods or services is expected to be one year or less.

Transaction and processing fees

Fees for the Company’s transaction

and processing arrangements are typically billed and paid on a monthly basis.

The Company receives a percentage of recurring monthly

transaction related fees comprised of credit and debit card fees charged to merchants, net of association fees, otherwise known

as Interchange, as well as certain service charges and convenience fees, for payment processing services, including authorization,

capture, clearing, settlement and information reporting of electronic transactions.

The Company determines

revenue recognition through the following steps:

Identification

of a contract with a customer;

Identification

of the performance obligations in the contract;

Determination

of the transaction price;

of the transaction price to the performance obligations in the contract;

of revenue when or as the performance obligations are satisfied.

is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration

the Company expects to be entitled to in exchange for those goods or services.

Shipping and handling activities associated with outbound

freight after control over a product has transferred to a customer are accounted for as a fulfillment activity and recognized as revenue

at the point in time at which control of the goods transfers to the customer.

As a practical expedient, the Company does not adjust the

transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment

and the transfer of goods or services is expected to be one year or less.

and processing fees

for the Company’s transaction and processing arrangements are typically billed and paid on a monthly basis.

The Company receives

a percentage of recurring monthly transaction related fees comprised of credit and debit card fees charged to merchants, net of association

fees, otherwise known as Interchange, as well as certain service charges and convenience fees, for payment processing services, including

authorization, capture, clearing, settlement and information reporting of electronic transactions.

Fees are calculated on either a percentage

of the dollar, volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of the transaction.

These merchant services represent a single performance obligation satisfied over time and that the same measure of progress should

be used to measure the Company’s progress toward complete satisfaction of the performance obligation.

The Company will recognize

revenue on a monthly basis as the services are transferred to the customer in short daily increments that qualify for series guidance

as the best measure of the transfer of control.

In wholesale contracts, the Company recognizes

transaction and processing fees on a gross basis as the Company is the principal in the merchant services.

The Company has concluded

it is the principal because it has a direct contractual relationship with the merchant, is primarily responsible for the delivery

of services to the merchants, including performing underwriting, has discretion in setting prices, and bears risk of chargebacks

and other merchant losses.

The Company also has the unilateral ability to accept or reject a transaction based on criteria established

by the Company.

As the principal, the Company records the full discount charged to the merchant as revenue and the related interchange

and other processing fees within cost of revenues.

In retail contracts, the Company is not

responsible for merchant underwriting, has no chargeback liability and has no or limited contractual relationship with the merchant.

As such, the Company records the net amount it receives from the processor, after interchange and other interchange and other processing

fees, as revenue.

Merchant equipment sales and other

The Company generates revenue through the

sale and rental of merchant equipment.

The Company satisfies its performance obligation upon delivery of equipment to merchants

and recognizes revenue at a point in time.

The Company allows for customer returns which are accounted for as variable consideration.

merchant services represent a single performance obligation satisfied over time and that the same measure of progress should be used

to measure the Company’s progress toward complete satisfaction of the performance obligation.

The Company will recognize revenue

on a monthly basis as the services are transferred to the customer in short daily increments that qualify for series guidance as the

best measure of the transfer of control.

wholesale contracts, the Company recognizes transaction and processing fees on a gross basis as the Company is the principal in the merchant

The Company has concluded it is the principal because it has a direct contractual relationship with the merchant, is primarily

responsible for the delivery of services to the merchants, including performing underwriting, has discretion in setting prices, and bears

risk of chargebacks and other merchant losses.

The Company also has the unilateral ability to accept or reject a transaction based on

criteria established by the Company.

As the principal, the Company records the full discount charged to the merchant as revenue and the

related interchange and other processing fees within cost of revenues.

retail contracts, the Company is not responsible for merchant underwriting, has no chargeback liability and has no or limited contractual

relationship with the merchant.

As such, the Company records the net amount it receives from the processor, after interchange and other

interchange and other processing fees, as revenue.

equipment sales and other

Company generates revenue through the sale and rental of merchant equipment.

The Company satisfies its performance obligation upon delivery

of equipment to merchants and recognizes revenue at a point in time.

The Company allows for customer returns which are accounted for

as variable consideration.

The Company estimates these amounts based on historical experience and reduces revenue recognized.

The Company invoices customers

upon delivery of the equipment to merchants, and payments from such customers are due upon invoicing.

The Company offers hardware

installment sales to customers with terms ranging from three to forty-eight months.

The Company allocates a portion of the

consideration received from these arrangements to a financing component when it determines that a significant financing component

The financing component is subsequently recognized as financing revenue separate from hardware revenue, within subscription

and services-based revenue, over the terms of the arrangement with the customer.

Pursuant to practical expedients afforded under

ASC 606, the Company does not recognize a financing component for hardware installment sales that have a term of one year or less.

Deferred Revenue

From time to time the Company may launch

new products or services to its merchants.

In the event step 1 under ASC 606 is not met, the Company will record deferred revenue

upon receipt of the payment by the customer.

In November 2019, the Company began billing existing merchants for its cloud-based

omni-channels software, ShopFast.

Merchants are billed monthly with the ability to opt out and receive a refund for up to 30 days

after they are billed.

Due to the lack of historical data related to these services, customer activity and the associated billings

and refunds, $99,594 was recorded as deferred revenue as of December 31, 2019.

All of the deferred revenue, net of any refunds,

was recognized in the nine months ended September 30, 2020.

During the nine months ended September 30, 2020, the Company determined

it had sufficient information to determine Step 1 was achieved, and therefore recognized all revenue that was previously deferred.

As such, $99,594 of revenue recognized during the nine months ended September 30, 2020 pertained to services provided in the prior

Recently Adopted Accounting Standards

In February 2016, the FASB issued ASU 2016-02,

Leases (Topic 842) .

The ASU requires that a lessee recognize the assets and liabilities that arise from operating leases.

A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a

right-of-use asset representing its right to use the underlying asset for the lease term.

For leases with a term of 12 months or

less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and

lease liabilities.

We adopted the ASU effective January 1, 2020, using the modified retrospective transition method.

method, there was no cumulative impact adjustment necessary with the adoption to our accumulated deficit on January 1, 2020.

condensed consolidated financial statements for periods ending after January 1, 2020 are presented in accordance with the requirements

of Topic 842, while comparative prior period amounts have not been adjusted and continue to be reported in accordance with Topic

Recent Accounting Standards

In November 2019,

the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivative and Hedging (Topic 815), and Leases

invoices customers upon delivery of the equipment to merchants, and payments from such customers are due upon invoicing.

offers hardware installment sales to customers with terms ranging from three to forty-eight months.

The Company allocates a portion

of the consideration received from these arrangements to a financing component when it determines that a significant financing component

The financing component is subsequently recognized as financing revenue separate from hardware revenue, within subscription and

services-based revenue, over the terms of the arrangement with the customer.

Pursuant to practical expedients afforded under ASC 606,

the Company does not recognize a financing component for hardware installment sales that have a term of one year or less.

Adopted Accounting Standards

November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivative and Hedging (Topic 815),

and Leases (Topic 842).

This new guidance became effective for us on January 1, 2020.

The adoption of this guidance did not have a material

impact on our condensed consolidated financial statements.

NOTE 3 –

LIQUIDITY AND CAPITAL

In connection with the response to the

COVID-19 pandemic in the United States, the Company has experienced disruptions to its business and has observed disruptions with

its customers and merchants, which has resulted in a decline in transaction volume.

While the volume of processing transactions

by merchants in March was relatively in-line with the Company’s expectations that the number of transactions during

March would be below the prior year because states in the United States began to implement stay-at-home orders, the number

of transactions and resulting revenue was approximately 15% lower in March than in February and 30% lower in April than in March.

In May, the number of transactions began to increase whereby they were 5% higher than in April, and in June, transactions were

7% higher than May and in June through September, the number and amount of transactions continued to steadily increase whereby

they are meeting expectations.

The Company’s revenue during the period of time decreased and then increased in the amount

similar to the percentage of month-to-month transaction volume.

The Company’s revenue during the period of time decreased

and then increased in the amount similar to the percentage of month-to-month transaction volume.

Despite recent increases in volume,

the Company estimates that the number of transactions will continue to stay at a depressed level or further decline from the prior

year, along with revenues, until the end of the COVID-19 pandemic or the response to the COVID-19 pandemic fully relaxes further

stay-at-home restrictions and allows customers to make more point of purchase transactions for merchants, customers become

more comfortable shopping in stores and/or more merchants provide for additional contactless and online purchase options.

The anticipated

amount of anticipated decline from prior year is unknown, but it will be impacted by when consumers return to the level of purchasing

that occurred in the prior year and before the pandemic.

The Company does not anticipate that the pandemic will continue to have

a material impact on the Company’s business or liquidity.

However, additional closings and reopenings of businesses or if

additional businesses cease to operate in the future will likely result in a month over month decline and then increase similar

to what occurred in March through September 2020.

At September 30, 2020, the Company had

cash of $4,122,640 and working capital of $3,412,449.

For the three and nine months ended September 30, 2020, the Company’s

net loss was $657,358 and $1,709,974, respectively.

In addition, as of September 30, 2020, the Company was not in compliance with

certain financial covenants required by the Credit Agreement.

As a result of these factors, the Company

determined it was necessary to review its cash flow for 2020 and 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

The Company also determined it was necessary to take certain corporate actions, including reducing discretionary expenses

and amending its existing senior indebtedness as discussed below, in order to ensure 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.

On August 11, 2020, the Company closed

an offering of its securities (the “Offering”) for gross proceeds of $6.45 million.

The Company sold 700,000 units

consisting of (a) one share of our common stock;

(b) two Series A Warrants, and (c) one-half of one Series

In addition, the underwriter fully exercised its option to purchase 210,000 Series A warrants and 52,500 Series

While 20% of the net proceeds of $5.5 million was used to repay a portion of our outstanding Term Loan, immediately

following the Offering, the Company had cash of $5.6 million on hand.

As such, the Company believes it will be able fund future

liquidity and capital requirements through cash flows generated from its operating activities for a period of at least twelve months

from the date its condensed consolidated financial statements are issued.

In addition, the Company has received a Paycheck

Protection Program loan under the CARES Act for approximately $236,000 (the “PPP Loan”).

Paycheck Protection Program provides that the use of PPP Loan proceeds were limited to certain qualifying expenses

and may be partially or wholly forgiven in accordance with the requirements set forth in the CARES Act.

The Company currently intends

to use the PPP Loan for permitted uses, although no assurance can be given that the Company will obtain forgiveness

of all or any portion of amounts due under the PPP Loan.

a result of the improved transaction volume trends the Company experienced in the three months ended September 30, 2020,

as well as the above discussed capital raises, the Company believes it has sufficient liquidity

in order to sustain operations for a period of at least twelve months f rom the date its condensed consolidated financial

statements are available to be issued.

Additional Information Regarding Our

Credit Agreement

On April 24, 2020, the Company entered

into Amendment No.

4 to Loan and Security Agreement amending the Credit Agreement.

The purpose of Amendment No.

4 was to extend

the Maturity Date of the indebtedness to April 9, 2022 and to waive any outstanding events of default.

In consideration for

the foregoing, the Credit Agreement was amended to include a new principal repayment schedule under the note whereby the Company

paid an amount equal to $125,000 upon execution of Amendment No.

4 and the Company agreed to make a monthly payment of $25,000

per month, commencing May 1, 2020, and on the first business day of each calendar month thereafter until the required balloon

payment on April 9, 2022.

In the event that the Company does not make a monthly payment, Messrs.

Yakov and Herzog will have

the ability to make an equity contribution to the Company for the sole purpose of paying the monthly payment obligation of the

Company under the Credit Agreement.

Although, we believe we are currently in

compliance, we have not complied with these obligations at certain times since the Credit Agreement was entered into and were obligated

to obtain certain waivers and modifications of these provisions to avoid an acceleration event under the Credit Agreement.

are not able to remain in compliance with these obligations, the creditor may accelerate the maturity of the loan or may require

us to adhere to stricter financial covenants in exchange for a waiver.

While we expect to comply with these financial covenants,

we cannot guarantee our ability to do so.

Although it has entered into Amendment No.

4 which extended the maturity date, the Company

is exploring refinancing solutions for more advantageous terms for its long-term debt with new debtholders.

If the Company is unable

to refinance its debt or is unable to satisfy its obligations as they become due, the Company may be required to sell assets to

repay all or part of the debt or replace the debt with less favorable terms.

Pursuant to the terms of the Credit Agreement,

the Company is required to maintain the following financial covenants in order to avoid an event of default:

(1) a Fixed Charge

Coverage Ratio (“FCCR”) not less than 1.20:1.00, measured in each case on a trailing twelve month basis and (2) net

revenue of the Company shall not be less than (x) until June 30, 2021 $9,000,000 and (y) from and after July 1, 2021, $10,000,000.

on a trailing twelve-month basis.

The Fixed Charge Coverage Ratio is defined as the ratio of (A) EBITDA for each fiscal month minus

unfinanced capital expenditures (but not less than zero) for such fiscal month to (B) the sum of (i) all principal payments scheduled

to be made during or with respect to such period, plus (ii) all interest expense for such period paid or required to be paid in

cash during such period, plus (iii) all federal, state, and local income taxes paid or required to be paid for such period, plus

(iv) all cash distributions, dividends, redemptions and other cash payments made or required to be made during such period with

respect to equity issued by the Company.

On August 10, 2020 GACP, as agent to the senior lenders, waived the Company’s default

on June 30, 2020 of the financial covenant relating to the FCCR.

GACP further acknowledged and agreed that the Company’s

payment of 20% of the net proceeds of its public offering which closed on August 11, 2020 does not constitute a scheduled payment

required to be included when calculating the Fixed Charge Coverage Ratio.

NOTE 4 –

impact on the Company’s consolidated financial statements.

January 1, 2020 the Company adopted ASU 2017-04, Intangibles - Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill

The ASU eliminates Step 2 of the goodwill impairment test and the qualitative assessment for any reporting unit with

a zero or negative carrying amount.

The ASU also requires an entity to disclose the amount of goodwill allocated to each reporting unit

with a zero or negative carrying amount.

The adoption did not have an impact on the Company’s consolidated financial statements.

LIQUIDITY AND CAPITAL RESOURCES

March 31, 2021, the Company had cash of approximately $2.4 million and working capital of approximately $2.3 million.

As such, the Company

believes it has sufficient liquidity to fund its future operations and capital requirements for a period of at least twelve months from

the date its consolidated financial statements are issued.

INTANGIBLE ASSETS

Intangible assets, net, consist of the

following as of:

September 30,

assets, net, consist of the following as of:

Merchant Portfolios

1 unchanged sentence

Net residual portfolios

September 30,

Less Accumulated Amortization

Net trade name

Amortization expense for the three months

ended September 30, 2020 and 2019 was $222,090 and $203,214, respectively.

Amortization expense for the nine months

ended September 30, 2020 and 2019 was $628,519 and $609,643, respectively.

The Company’s merchant portfolios

and tradename are being amortized over respective useful lives of 7 and 5 years.

The following sets forth the estimated

amortization expense related to amortizing intangible assets for the years ended December 31:

2020 (remainder of year)

The weighted average remaining useful life

of amortizing intangible assets was 3.33 years at September 30, 2020.

NOTE 5 –

On April 8, 2018, eVance, Omnisoft, and

CrowdPay, (collectively, the “Borrowers”), entered into a term loan of $12,500,000 with GACP (the “Term Loan”)

to the which obligations are guaranteed by the Company (collectively with the Borrowers, the “Loan Parties”), under

the Loan and Security Agreement (the “Credit Agreement”).

On April 24, 2020, the Company entered

into Amendment No.

4 to Loan and Security Agreement amending the Credit Agreement.

The purpose of Amendment No.

4 was to extend

the Maturity Date of the indebtedness and to waive certain outstanding events of default.

Specifically, the Maturity Date of the

indebtedness was extended for one year to April 9, 2022.

The lenders also waived the Company’s existing default under the

Credit Agreement from the date the default occurred until the date of Amendment No.

These defaults were:

(i) failure to notify

the Agent that one or more of the Loan Parties received proceeds from litigation above $99,999.99 and use the proceeds to make

a prepayment of the Loans, (ii) one or more of the Loan Parties incurred indebtedness in an aggregate amount of $386,467 during

fiscal year 2019 as a result of not reimbursing business expenses paid by Mr.

Yakov in the ordinary course, which indebtedness

is not permitted under Section 5.23(f) of the Credit Agreement (“

Debt Default ”) and (iii) Lender had not received

financial statements and covenant compliance certificate of the Company as parent guarantor and the Borrowers for the fiscal year

ended December 31, 2019 within 90-days of such fiscal year end as required by Section 5.15(a) of the Credit Agreement.

Amendment No.

4 provides the Company with a limited waiver permitting the Company to incur government funded indebtedness from

the United States CARES Act loan programs.

Further, the financial covenants were amended whereby Consolidated Net Revenue for any

rolling 12-month period shall not be less than $9,000,000 until June 30, 2021 and $10,000,000 from and after July 1, 2021.

Amendment No.

4 requires that the Company pay 100% of the proceeds from any favorable judgments from ongoing litigation and 20%

of the net proceeds from any future equity offering completed by the Company to reduce the principal of the Term Loan and such

payment was made following the closing of the Offering.

The Term Loan matures in full on April

9, 2022, the third anniversary of the Closing.

$1,000,000 of the principal amount under the Term Loan was repaid on to July 31,

2018, and an additional $2,000,000 in principal was paid on November 14, 2018.

Additionally, the Company paid $125,000 of the Term

Loan upon execution of Amendment No.

4 in April 2020 and the Company agreed to make a monthly payment of $25,000 per month, commencing

May 1, 2020 and on the first business day of each calendar month thereafter, with the remaining principal due upon maturity.

Term Loan can be prepaid without penalty in part by the Loan Parties with ten days’

prior written notice to the Agent, and

in full within thirty days’

prior written notice.

The Term Loan is subject to an interest rate of 9.0% per annum, payable

monthly in arrears.

The obligations of the Loan Parties under

the Credit Agreement are secured by all of their respective assets and the Loan Parties pledged all of their assets as collateral

for their obligations under the Credit Agreement.

Additionally, the Company pledged its ownership interests in the Purchasers and

any of its other subsidiaries that it may form or acquire from time to time.

The Credit Agreement includes customary

representations, warranties and financial and other covenants of the Loan Parties for the benefit of the Lenders and the Agent.

The obligations of the Loan Parties under the Credit Agreement are subject to customary events of default for a secured term loan.

Each Loan Party is jointly and severally liable for the obligations under the Credit Agreement.

Although, following the execution of Amendment

4, we are in compliance, we have not complied with these obligations at certain times since the Credit Agreement was entered

into, including at June 30, 2020, and were obligated to obtain certain waivers and modifications of these provisions to avoid an

acceleration event under the Credit Agreement.

If we are not able to remain in compliance with these obligations, the creditor

may accelerate the maturity of the loan or may require us to adhere to stricter financial covenants in exchange for a waiver.

we expect to comply with these financial covenants, we cannot guarantee our ability to do so.

Although it has entered into Amendment

4 which extended the maturity date, the Company is exploring refinancing solutions for more advantageous terms for its long-term

debt either with new debtholders.

If the Company is unable to refinance its debt or is unable to satisfy its obligations as they

become due, the Company may be required to sell assets to repay all or part of the debt or replace the debt with less favorable

terms Total interest expense for the three and nine months ended September 30, 2020 was $199,890 and $629,446, respectively, $60,974

of which is accrued as of September 30, 2020.

Total interest expense for the GACP loan incurred during the three and nine months

ended September 30, 2019 was $218,500 and $648,375, respectively.

Accrued interest as of December 31, 2019 was $73,625.

See Note 12- Subsequent Events for additional

information about the Credit Agreement.

6, 2020, the Company received a Paycheck Protection Program loan under the CARES Act for $236,231 (the “PPP Loan”).

expense for the three months ended March 31, 2021 and 2020 was $215,904 and $203,214, respectively.

Company’s merchant portfolios and tradename are being amortized over respective useful lives of 7 and 5 years.

following sets forth the estimated amortization expense related to amortizing intangible assets for the years ended December 31:

2021 (nine months)

weighted average remaining useful life of amortizing intangible assets was 2.83 years at March 31, 2021.

On April 8, 2018, eVance, Omnisoft, and CrowdPay,

(collectively, the “Borrowers”), entered into a term loan of $12,500,000 with GACP (the “Term Loan”) which obligations

are guaranteed by the Company (collectively with the Borrowers, the “Loan Parties”), under the Loan and Security Agreement

(the “Credit Agreement”).

March 2, 2021, the Company transferred cash in the amount of $7,712,256.28 to the Agent under the Credit Agreement (the “Prepayment”).

The Prepayment facilitated the discharge in full of all of the obligations under the Credit Agreement.

In connection with the extinguishment

of the obligations under the Credit Agreement, 40,000 warrants to purchase Common Stock were cancelled.

May 6, 2020, the Company received a Paycheck Protection Program loan under the CARES Act for $236,231 (the “PPP Loan”).

The PPP Loan matures on May 7, 2022 and bears interest at 1% per annum.

Monthly amortized principal and interest

payments are deferred for 6 months after the date of the agreement.

Monthly amortized principal and interest payments

are deferred for 6 months after the date of the agreement.

The Paycheck Protection Program provides that the use of PPP Loan proceeds

were limited to certain qualifying expenses and may be partially or wholly forgiven in accordance with the requirements set forth

in the CARES Act.

The Company believes it has used the PPP Loan for permitted uses, although no assurance can be

given that the Company will obtain forgiveness of all or any portion of amounts due under the PPP Loan.

been accounted for as long-term debt, which, if forgiven will result in a gain on forgiveness of debt in the period forgiveness

NOTE 6 –

were limited to certain qualifying expenses and may be partially or wholly forgiven in accordance with the requirements set forth in

the CARES Act.

The Company believes it has used the PPP Loan for permitted uses, although no assurance can be given that

the Company will obtain forgiveness of all or any portion of amounts due under the PPP Loan.

The loan has been accounted for

as long-term debt, which, if forgiven will result in a gain on forgiveness of debt in the period forgiveness is obtained.

STOCK OPTIONS

On January 1, 2020, pursuant to the terms

on the employment agreement with Mr.

Yakov he was granted 6,667 common stock options.

The grant shall vest at the rate of 1/3 beginning

on each anniversary of the effective date of grant.

The options have an exercise price of $0.001 and expire in three years after

each vest date.

The aggregate fair value of the options totaled $99,994 based on the Black Scholes Merton pricing model using the

following estimates:

exercise price of $0.001, 1.63% risk free rate, 95.3% volatility and expected life of the options of 3 years.

The fair value is being amortized over the applicable vesting period and credited to additional paid in capital.

A summary of the status of the Company’s

outstanding stock options and changes during the nine months ended September 30, 2020 is presented below:

January 1, 2021, the Company granted stock options to purchase 6,667 shares of common stock pursuant to the terms on the Company’s

employment agreement with Mr.

The grant shall vest at the rate of 1/3 beginning on each anniversary of the effective date of grant.

The options have an exercise price of $0.001per share and expire in three years after each vest date.

The aggregate fair value of the

options totaled $32,793 based on the Black Scholes Merton pricing model using the following estimates:

exercise price of $0.001, 0.16%

risk free rate, 35.03% volatility and expected life of the options of 3 years.

The fair value is being amortized over the applicable

vesting period and credited to additional paid in capital.

summary of the status of the Company’s outstanding stock options and changes during the three months ended March 31, 2021 is presented

Stock Options

2 unchanged sentences

Options outstanding at January 1, 2019

Options outstanding September 30, 2020

Shares exercisable at September 30, 2020

NOTE 7 –

On August 6, 2020, the Company entered

into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp., acting as representative of

the underwriters (“Aegis”), pursuant to which the Company agreed to sell to the underwriters in a firm commitment underwritten

public offering (the “Offering”) an aggregate of 700,000 units (the “Units”), with each Unit consisting

Options outstanding at January 1, 2020

Options outstanding December 31, 2020

Options outstanding March 31, 2021

Shares exercisable at March 31, 2021

August 6, 2020, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp.,

acting as representative of the underwriters (“Aegis”), pursuant to which the Company agreed to sell to the underwriters

in a firm commitment underwritten public offering (the “Offering”) an aggregate of 700,000 units (the “Units”),

with each Unit consisting of:

(a) one share of our common stock;

(b) two Series A warrants (the “Series A Warrants”), with each Series A Warrant

entitling the holder thereof to purchase one share of our common stock at an exercise price equal to $9.00 per share, exercisable

until the fifth anniversary of the issuance date, subject to their earlier redemption as described therein;

and (c) one-half of

one Series B warrant (the “Series B Warrants,”

(b) two Series A warrants (the “Series A Warrants”), with

each Series A Warrant entitling the holder thereof to purchase one share of our common stock at an exercise price equal to $9.00 per

share, exercisable until the fifth anniversary of the issuance date, subject to their earlier redemption as described therein;

one-half of one Series B warrant (the “Series B Warrants,”

and together with the Series A Warrants, the “Warrants”),

with each whole Series B Warrant entitling the holder thereof to purchase one share of common stock at an exercise price equal

to $4.50 per share, exercisable until the fifth anniversary of the issuance date and subject to their earlier redemption as described

The Company also granted the underwriters a 45-day option to purchase up to an additional 105,000 shares of common stock,

and/or an additional 210,000 Class A Warrants to purchase shares of common stock and/or an additional 52,500 Class B Warrants to

purchase shares of common stock as may be necessary to cover over-allotments in connection with the Offering.

The Offering, including

the exercise in full of the over-allotment option for the Warrants, closed on August 11, 2020.

The Units and the securities underlying

the Units were offered by the Company pursuant to a registration statement on Form S-1, as amended (File No.

333-232368), filed

with the Securities and Exchange Commission (the “Commission”), which was declared effective by the Commission on August

6, 2020 (the “Registration Statement”).

The net proceeds to the Company from the

Offering, after deducting the underwriting discount, the underwriters’

fees and expenses and the Company’s Offering

expenses, was approximately $5.6 million.

The Company utilized $1,120,155 of the net proceeds to repay a portion of the Company’s

long-term indebtedness (the “Term Loan”) and anticipates using the remainder of the net proceeds from the Offering

to invest in or acquire companies or technologies that are synergistic with or complimentary to our business, expand and market

our current products and for working capital and other general corporate purposes (including payment of outstanding accounts payable).

The Warrants were issued in registered

form under separate warrant agent agreements (each a “Warrant Agent Agreement”) between us and our warrant agent, Transfer

with each whole Series B Warrant entitling the holder thereof to purchase one share of common stock at an exercise price equal to $4.50

per share, exercisable until the fifth anniversary of the issuance date and subject to their earlier redemption as described therein.

The Company also granted the underwriters a 45-day option to purchase up to an additional 105,000 shares of common stock, and/or an additional

210,000 Class A Warrants to purchase shares of common stock and/or an additional 52,500 Class B Warrants to purchase shares of common

stock as may be necessary to cover over-allotments in connection with the Offering.

The Offering, including the exercise in full of the

over-allotment option for the Warrants, closed on August 11, 2020.

Units and the securities underlying the Units were offered by the Company pursuant to a registration statement on Form S-1, as amended

333-232368), filed with the Securities and Exchange Commission (the “Commission”), which was declared effective

by the Commission on August 6, 2020 (the “Registration Statement”).

net proceeds to the Company from the Offering, after deducting the underwriting discount, the underwriters’

fees and expenses and

the Company’s Offering expenses, was approximately $4.9 million.

The Company utilized $1,120,155 of the net proceeds to repay

a portion of the Company’s long-term indebtedness (the “Term Loan”) and anticipates using the remainder of the net

proceeds from the Offering to invest in or acquire companies or technologies that are synergistic with or complimentary to our business,

expand and market our current products and for working capital and other general corporate purposes (including payment of outstanding

accounts payable).

Warrants were issued in registered form under separate warrant agent agreements (each a “Warrant Agent Agreement”) between

us and our warrant agent, Transfer Online, Inc.

(the “Warrant Agent”).

Each Series A Warrant entitles the registered

holder to purchase one share of our common stock at a price equal to $9.00 per share, subject to adjustment as discussed below,

terminating at 5:00 p.m., New York City time, on the fifth (5th) anniversary of the date of issuance.

No fractional warrants will

be issued and only whole warrants are exercisable.

The exercise price and number of shares of common stock issuable upon exercise

of the Series A Warrants may be adjusted in certain circumstances, including in the event of a stock dividend, extraordinary dividend

on or recapitalization, reorganization, merger or consolidation.

If we fail to maintain a current prospectus or prospectus relating

to the common stock issuable upon the exercise of the Series A Warrants, such holders may exercise their Series A warrants on a

“cashless”

Series A Warrant entitles the registered holder to purchase one share of our common stock at a price equal to $9.00 per share, subject

to adjustment as discussed below, terminating at 5:00 p.m., New York City time, on the fifth (5th) anniversary of the date of issuance.

No fractional warrants will be issued and only whole warrants are exercisable.

The exercise price and number of shares of common stock

issuable upon exercise of the Series A Warrants may be adjusted in certain circumstances, including in the event of a stock dividend,

extraordinary dividend on or recapitalization, reorganization, merger or consolidation.

If we fail to maintain a current prospectus or

prospectus relating to the common stock issuable upon the exercise of the Series A Warrants, such holders may exercise their Series A

warrants on a “cashless”

basis pursuant to a formula set forth in the terms of the Series A Warrants.

Each whole Series B Warrant entitles the

holder thereof to purchase one share of our common stock at an exercise price of $4.50 per share, subject to adjustment as discussed

below, terminating at 5:00 p.m., New York City time, on the fifth (5th) anniversary of the date of issuance.

No fractional warrants

will be issued and only whole warrants are exercisable.

The exercise price and number of shares of common stock issuable upon exercise

of a whole Series B Warrant may be adjusted in certain circumstances, including in the event of a stock dividend, extraordinary

dividend on or recapitalization, reorganization, merger or consolidation.

If we fail to maintain a current prospectus or prospectus

relating to the common stock issuable upon the exercise of the Series B Warrants, such holders may exercise their Series B warrants

on a “cashless”

whole Series B Warrant entitles the holder thereof to purchase one share of our common stock at an exercise price of $4.50 per share,

subject to adjustment as discussed below, terminating at 5:00 p.m., New York City time, on the fifth (5th) anniversary of the date of

No fractional warrants will be issued and only whole warrants are exercisable.

The exercise price and number of shares of common

stock issuable upon exercise of a whole Series B Warrant may be adjusted in certain circumstances, including in the event of a stock

dividend, extraordinary dividend on or recapitalization, reorganization, merger or consolidation.

If we fail to maintain a current prospectus

or prospectus relating to the common stock issuable upon the exercise of the Series B Warrants, such holders may exercise their Series

B warrants on a “cashless”

basis pursuant to a formula set forth in the terms of the Series B Warrants.

Each holder of the Warrants will be subject

to a requirement that they will not have the right to exercise the Warrants to the extent that, after giving effect to such exercise,

such holder (together with its affiliates) would beneficially own in excess of 4.99% (subject to increase to 9.99%) of the shares

of our common stock outstanding immediately after giving effect to such exercise.

The Warrants are callable in the event

that the last sales price of our common stock for any twenty (20) consecutive trading day period on or after the date of issuance

(the “Measurement Period”) exceeds $9.00.

The Company may, within ten (10) trading days of the end of such Measurement

Period, call for the redemption of all or any portion of the outstanding and unexercised Warrants for consideration equal to the

Black Scholes Value (as defined therein) of the remaining unexercised portion of the Warrants called for redemption on such date.

Pursuant to the Underwriting Agreement,

the Company issued to Aegis a warrant (the “Representative’s Warrants”) to purchase 35,000 shares of common stock.

The Representative’s Warrants will be exercisable at a per share exercise price equal to $11.25 and is exercisable at any

time and from time to time, in whole or in part, during the four-year period commencing twelve months from the effective date of

the Registration Statement.

The Representative’s Warrants also provide for one demand registration right of the shares underlying

the Representative’s Warrants, and unlimited “piggyback”

registration rights with respect to the registration

of the shares of common stock underlying the Representative’s Warrants and customary anti-dilution provisions.

The aggregate fair value of the 35,000

warrants, totaled $363,958 based on the Black Scholes Merton pricing model using the following estimates:

exercise price of $11.25,

0.21% risk free rate, 315.6% volatility and expected life of the warrants of 6 years.

The value of the warrants has been netted

against the proceeds of the offering proceeds and accounted for in additional paid in capital.

holder of the Warrants will be subject to a requirement that they will not have the right to exercise the Warrants to the extent that,

after giving effect to such exercise, such holder (together with its affiliates) would beneficially own in excess of 4.99% (subject to

increase to 9.99%) of the shares of our common stock outstanding immediately after giving effect to such exercise.

Warrants are callable in the event that the last sales price of our common stock for any twenty (20) consecutive trading day period on

or after the date of issuance (the “Measurement Period”) exceeds $9.00.

The Company may, within ten (10) trading days of

the end of such Measurement Period, call for the redemption of all or any portion of the outstanding and unexercised Warrants for consideration

equal to the Black Scholes Value (as defined therein) of the remaining unexercised portion of the Warrants called for redemption on such

to the Underwriting Agreement, the Company issued to Aegis a warrant (the “Representative’s Warrants”) to purchase

35,000 shares of common stock.

The Representative’s Warrants will be exercisable at a per share exercise price equal to $11.25

and is exercisable at any time and from time to time, in whole or in part, during the four-year period commencing twelve months from

the effective date of the Registration Statement.

The Representative’s Warrants also provide for one demand registration right

of the shares underlying the Representative’s Warrants, and unlimited “piggyback”

registration rights with respect

to the registration of the shares of common stock underlying the Representative’s Warrants and customary anti-dilution provisions.

aggregate fair value of the 35,000 warrants, totaled $363,958 based on the Black Scholes Merton pricing model using the following estimates:

exercise price of $11.25, 0.21% risk free rate, 315.6% volatility and expected life of the warrants of 6 years.

The value of the warrants

has been netted against the proceeds of the offering proceeds and accounted for in additional paid in capital.

Number of Warrants

3 unchanged sentences

Outstanding, December 31, 2018

Outstanding, December 31, 2019

Warrant A Granted (1)

3 unchanged sentences

Underwriter Warrant Exercised

(1) Includes 210,000 Warrant A granted to Underwriters upon exercise of overallotment in connection

with the Offering

(2) Includes 52,5000 Warrant B granted to Underwriters upon exercise of overallotment in connection

with the Offering

NOTE 8 –

RELATED PARTY TRANSACTIONS

On July 30, 2018, pursuant to the terms

of the Amendment, the Company issued to Mr.

John Herzog, a significant stockholder of the Company a subordinated promissory note

in the principal amount of $1,000,000 (the “Note”) for cash proceeds of $1,000,000.

The Note initially matured on March

31, 2019 (though the Company had the right to prepay the Note, in whole or in part, at any time prior to maturity) and bears interest

at a rate of 12% per annum, compounding annually.

The Note is subordinated to the Credit Agreement.

The Company used the proceeds

received to make the initial payment under the Credit Agreement.

On November 14, 2018, the Company issued

to John Herzog, a subordinated promissory note in the principal amount of $2,000,000 for cash proceeds of $2,000,000.

On March 1, 2019, the Company entered into

Amendment No.

1 to Subordinated Promissory Note (the “Subordinated Note Amendment”) with Mr.

The purpose of

the Subordinated Note Amendment was to amend that certain subordinated promissory note issued on July 26, 2018 in the principal

amount of $1,000,000 to reflect an increase in the amount of principal due under the note from $1,000,000 to $3,000,000 reflecting

a payment made by the payee to the Company of $2,000,000 on November 14, 2018 (the proceeds of which were used by the Company to

make a second required payment under the Credit Agreement) and to extend the maturity date of the Note from March 31, 2019 to September

On June 25, 2019, the Company entered into Amendment No.

2 to the subordinated promissory note with Mr.

of the amendment was to amend the maturity date of such subordinated promissory note such that it will be extended until September

Total interest expense on the two loans

Herzog for the three and nine months ended September 30, 2019 was $90,740 and $269,260, respectively.

Total interest expense on the loans from

Herzog for the three and nine months ended September 30, 2020 was $33,321 and $212,827, respectively.

Total accrued interest

as of September 30, 2020 and December 31, 2019 was $0 and $402,849, respectively.

On May 13, 2020, Mr.

Herzog agreed

to convert, concurrently with the public offering of the Company’s securities, $3,522,191 in principal amount of indebtedness

(plus any additional accrued interest and other fees thereon that accrues prior to the offering) into shares of convertible Series

A Preferred Stock to be designated concurrently with the offering.

On July 24, 2020, the terms of such conversion were amended

such that Mr.

Herzog agreed to convert such an aggregate of $3,582,355 of indebtedness and accrued interest into Series A

Preferred Stock and warrants to purchase common stock at an exercise price determined by the public offering (“Conversion

Warrants”), which Series A Preferred Stock and conversion warrants would be issued concurrently with the closing of

the public offering.

The Company has determined Mr.

Herzog’s debt is being extinguished in order to protect his equity investment

in the Company.

Herzog is considered a principal owner with 10.3% of voting interests of the Company prior a conversion.

Company believes the equity investment in the Company is significant and indicates that Mr.

Herzog entered into the exchange to

protect his equity investment.

In accordance with ASC 470-50-40-2, an extinguishment transaction between related entities may be

capital transactions.

If the extinguishment accounting is applied, any gain or loss that results should be reflected in equity.

As a result, we believe the extinguishment did not and will not have any impact to the Company’s future financial statements.

As of September 30, 2020 and December 31,

2019, the Company has total accrued compensation due to Mr.

Yakov of $0 and $568,027, respectively, and advances to be repaid to

Yakov of $0 and $17,684, respectively.

Yakov, CEO has loaned funds to the

Company for working capital purposes.

As of September 30, 2020 and December 31, 2019 the balance on these loans is $0 and $386,467,

respectively.

The loans are unsecured, bear interest at 12% and are due on demand.

As of September 30, 2020 and December 31, 2019

there is $0 and $22,279 of interest accrued, respectively, on these loans.

Interest expense for the three months ended September

30, 2020 and 2019 was $0 and $4,375, respectively.

Interest expense for the nine months ended September 30, 2020 and 2019 was $23,125

and $10,538, respectively.

On May 13, 2020, Mr.

to convert, concurrently with the public offering of the Company’s securities, $1,011,016 in principal amount of indebtedness

and accrued interest, which includes deferred salary and unreimbursed expenses, most of which was outstanding for more than one

year, (plus any additional accrued interest and other fees thereon that accrues prior to the offering), into shares of convertible

Series A Preferred Stock to be designated concurrently with the offering.

On July 24, 2020, the terms of such conversion were

amended such that Mr.

Yakov agreed to convert an aggregate of $1,017,573 of accrued salary, indebtedness and accrued interest

into Series A Preferred Stock and Conversion Warrants, which Series A Preferred Stock and conversion warrants were issued concurrently

with the closing of the offering.

In accordance with ASC 470-50-40-2, an extinguishment transaction between related entities

may be a capital transaction.

As the extinguishment accounting is applied, any gain or loss that results will be reflected in equity.

As a result, the extinguishment did not have any impact to the Company’s future financial statements and further disclosures

related to ASC 855-10-50-2 is not necessary.

On July 24, 2020, the terms of the

agreement whereby Mr.

Herzog agreed to convert, concurrently with the public offering of the Company’s securities, $3,522,191

in principal amount of indebtedness (plus any additional accrued interest and other fees thereon that accrues prior to the offering)

into shares of convertible Series A Preferred were amended such that Mr.

Herzog agreed to convert such an aggregate of $3,582,355

of indebtedness and accrued interest into Series A Preferred Stock and Conversion Warrants, which Series A Preferred Stock

and Conversion Warrants would be issued concurrently with the closing of the public offering.

On August 11, 2020, Mr.

Herzog converted

$3,612,940 of indebtedness into 3,612 shares of Series A Preferred Stock (the terms of which are described below) and 802,875 Series

A Conversion Warrants with an exercise price of $9.00 and 200,719 Series B Conversion Warrants with an exercise price of $4.50.

On July 24, 2020, the terms of the

agreement whereby Mr.

Yakov agreed to convert, concurrently with the public offering of the Company’s securities, $1,017,753

in principal amount of indebtedness and accrued interest, which includes deferred salary and unreimbursed expenses (plus any additional

accrued interest and other fees thereon that accrues prior to the offering), into shares of convertible Series A Preferred Stock

to be designated concurrently with the offering such conversion were amended such that Mr.

Yakov agreed to convert an aggregate

of $1,017,573 of accrued salary, indebtedness and accrued interest into Series A Preferred Stock and conversion warrants, which

Series A Preferred Stock and conversion warrants would be issued concurrently with the closing of the offering.

11, 2020, Mr.

Yakov converted $1,021,512 of indebtedness into 1,021 shares of Series A Preferred Stock (the terms of which are

described in Note 10 below) and 227,003 Series A Conversion Warrants with an exercise price of $9.00 and 56,751 Series B Conversion

Warrants with an exercise price of $4.50.

NOTE 9 –

Outstanding, December 31, 2020

Warrant A Exercised

Warrant B Exercised

Outstanding, March 31, 2021

210,000 Warrant A granted to Underwriters upon exercise of overallotment in connection with the Offering

525,000 Warrant B granted to Underwriters upon exercise of overallotment in connection with the Offering

OPERATING LEASE

On June 24, 2020, eVance, Inc.

(“eVance”),

a Delaware corporation and an indirect, wholly owned subsidiary of The OLB Group, Inc.

(the “Company”), entered

into a Lease Agreement dated June 24, 2020 (the “Lease”) with Pergament Lodi, LLC (the “Lessor”) relating

to approximately 4,277 square feet of property located at 960 Northpoint Parkway, Alpharetta, Georgia, Suite 400.

The term of the

Lease is for thirty-nine (39) months commencing September 1, 2020.

The monthly base rent is $8,019 for the first twelve (12)

months increasing thereafter to $8,768.

The total rent for the entire lease term is $315,044 and $8,768 is payable as a security

June 24, 2020, eVance, Inc.

(“eVance”), a Delaware corporation and an indirect, wholly owned subsidiary of The OLB Group, Inc.

(the “Company”), entered into a Lease Agreement dated June 24, 2020 (the “Lease”) with Pergament Lodi, LLC (the

“Lessor”) relating to approximately 4,277 square feet of property located at 960 Northpoint Parkway, Alpharetta, Georgia,

The term of the Lease is for thirty-nine (39) months commencing September 1, 2020.

The monthly base rent is $8,019 for

the first twelve (12) months increasing thereafter to $8,768.

The total rent for the entire lease term is $315,044 and $8,768 is payable

as a security deposit.

The first three months of rent will be abated so long as eVance is not in default of any portion of the Lease.

Balance Sheet Classification

September 30,

Operating lease asset

8 unchanged sentences

Total lease liability

obligations at September 30 , 2020 consisted of the following:

obligations at March 31, 2021 consisted of the following:

For the year ended December 31:

4 unchanged sentences

Lease obligation –

expense for the three-and-nine months ended September 30 , 2020 was $26,848 and $83,300,

respectively.

Rent expense for the three and nine months ended September 30 , 2019

was $24,777 and $70,908, respectively.

September 30 , 2020, the weighted average remaining lease term is 3.17 years and the

weighted average discount rate is 5%.

NOTE 10 –

expense for the three months ended March 31, 2021 and 2020, was $24,909 and $27,818, respectively.

March 31, 2021, the weighted average remaining lease term is 2.67 years and the weighted average discount rate is 5%.

PREFERRED STOCK

Our certificate of incorporation authorizes

the issuance of 50,000,000 shares of blank check preferred stock with such designation, rights and preferences as may be determined

from time to time by our board of directors.

No shares of preferred stock are currently issued or outstanding.

Series A Preferred Stock

On August 7, 2020, we filed a Certificate

of Designations, Preferences and Rights of Series A Preferred Stock (the “Certificate of Designations”) with the Secretary

of State of Delaware.

The Certificate of Designations will provide that the Company may issue up to 10,000 shares of Series A Preferred

Stock at a stated value (the “Stated Value”) of $1,000.00 per share.

Holders of Series A Preferred Stock are entitled

to the following rights and preferences:

The Series A Preferred Stockholders are

entitled to receive cash dividends at a rate per share (as a percentage of the Stated Value per share) of 12% per annum.

accrue quarterly.

Dividends are to be paid to the holders from funds legally available for payment and as approved for payment

by the Board of Directors of the Company.

The Series A Preferred Stock holders may

convert, at their option, on or after the date on which the Term Loan is repaid in full, each share of Series A Preferred Stock

(along with accrued but unpaid dividends thereon) into such number of shares of common stock as determined by dividing the Stated

Value by the conversion price.

The conversion price for the Series A Preferred Stock will be equal to the offering price per Unit

in this offering and will be subject to adjustment for splits and the like.

The holders of Series A Preferred Stock will only be

permitted to convert their shares of Series A Preferred Stock into shares of common stock at such time as the Term Loan has been

certificate of incorporation authorizes the issuance of 50,000,000 shares of blank check preferred stock with such designation, rights

and preferences as may be determined from time to time by our board of directors.

No shares of preferred stock are currently issued or

A Preferred Stock

August 7, 2020, we filed a Certificate of Designations, Preferences and Rights of Series A Preferred Stock (the “Certificate of

Designations”) with the Secretary of State of Delaware.

The Certificate of Designations will provide that the Company may issue

up to 10,000 shares of Series A Preferred Stock at a stated value (the “Stated Value”) of $1,000.00 per share.

Series A Preferred Stock are entitled to the following rights and preferences:

Series A Preferred Stockholders are entitled to receive cash dividends at a rate per share (as a percentage of the Stated Value per share)

of 12% per annum.

Dividends accrue quarterly.

Dividends are to be paid to the holders from funds legally available for payment and as

approved for payment by the Board of Directors of the Company.

Series A Preferred Stock holders may convert, at their option, on or after the date on which the Term Loan is repaid in full, each share

of Series A Preferred Stock (along with accrued but unpaid dividends thereon) into such number of shares of common stock as determined

by dividing the Stated Value by the conversion price.

The conversion price for the Series A Preferred Stock will be equal to the offering

price per Unit in this offering and will be subject to adjustment for splits and the like.

The holders of Series A Preferred Stock will

only be permitted to convert their shares of Series A Preferred Stock into shares of common stock at such time as the Term Loan has been

repaid in full and there is no further outstanding obligations regarding such indebtedness.

Each holder of a share of Series A Preferred

Stock will have the right to vote its shares of Series A Preferred Stock with the common stock on an as-converted basis, and with

respect to such votes, such holder shall have full voting rights and powers equal to the voting rights and powers of the holders

of common stock, and shall be entitled, to notice of any stockholders’

meeting in accordance with the Company’s bylaws,

and shall be entitled to vote, together with holders of common stock, with respect to any question upon which holders of common

stock have the right to vote.

holder of a share of Series A Preferred Stock will have the right to vote its shares of Series A Preferred Stock with the common stock

on an as-converted basis, and with respect to such votes, such holder shall have full voting rights and powers equal to the voting rights

and powers of the holders of common stock, and shall be entitled, to notice of any stockholders’

meeting in accordance with the

Company’s bylaws, and shall be entitled to vote, together with holders of common stock, with respect to any question upon which

holders of common stock have the right to vote.

Fractional votes shall not be permitted, and such shares shall be rounded up.

Liquidation Preference

Each share of Series A Preferred Stock

will have a liquidation preference equal to the Stated Value plus any accrued but unpaid dividends thereon.

In the event of a liquidation,

dissolution or winding up of the Company (which includes any merger, reorganization, sale of assets in which control of the Company

is transferred or event which results in all or substantially all of the Company’s assets being transferred), the holders

of Series A Preferred Stock shall be entitled to receive out of the assets of the Company, before any payment is made to the holders

of the Company’s common stock and either in preference to or pari pasu with the holders of any other series of preferred

stock that may be issued in the future, a per share amount equal to the liquidation preference.

NOTE 11 –

share of Series A Preferred Stock will have a liquidation preference equal to the Stated Value plus any accrued but unpaid dividends

In the event of a liquidation, dissolution or winding up of the Company (which includes any merger, reorganization, sale of

assets in which control of the Company is transferred or event which results in all or substantially all of the Company’s assets

being transferred), the holders of Series A Preferred Stock shall be entitled to receive out of the assets of the Company, before any

payment is made to the holders of the Company’s common stock and either in preference to or pari pasu with the holders of

any other series of preferred stock that may be issued in the future, a per share amount equal to the liquidation preference.

COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Company

may be involved in legal proceedings, claims and assessments arising in the ordinary course of business.

The Company records legal

costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements.

On October 20, 2017, the Company entered

into a new employment agreement with its founder and president for 7 years effective January 1, 2018 through December 31, 2024.

The agreement provides for an annual salary of $375,000, fringe benefits ($2,500 monthly automobile allowance, any benefit plans

of the Company and 4 weeks paid vacation), an incentive bonus of $200,000 based on the achievement of certain performance criteria

and an acquisition bonus equal to two (2%) percent of the gross purchase price paid in connection therewith upon the closing of

any acquisition directly or indirectly by the Company or its subsidiaries during the Employment Period of any company or business

(including purchases of all or substantially all of the assets of any such entity) having then existing sales of not less than

three million five hundred thousand dollars ($3,500,000).

As of September 30, 2020, no bonuses have been earned or paid.

NOTE 12 –

the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course

The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable

October 20, 2017, the Company entered into a 7-year term employment agreement with its founder and President, effective January 1, 2018

through December 31, 2024.

The agreement provides for an annual salary of $375,000, fringe benefits ($2,500 monthly automobile allowance,

any benefit plans of the Company and 4 weeks paid vacation), an incentive bonus of $200,000 based on the achievement of certain performance

criteria and an acquisition bonus equal to two (2%) percent of the gross purchase price paid in connection therewith upon the closing

of any acquisition directly or indirectly by the Company or its subsidiaries during the Employment Period of any company or business

(including purchases of all or substantially all of the assets of any such entity) having then existing sales of not less than three

million five hundred thousand dollars ($3,500,000).

During the year ended December 31, 2020, Mr.

Yakov was paid a $400,000 bonus ($200,000

per year for 2019 and 2020).

SUBSEQUENT EVENTS

Amendment No.

5 to Loan and Security

On October 23, 2020,

the Company entered into Amendment No.

5 to Loan and Security Agreement (“Amendment No.

5”) amending the Loan and Security

Agreement (as amended by Amendment No.

1 to Loan and Security Agreement dated July 30, 2018, Amendment No.

3 to Loan and Security

Agreement dated February 5, 2019, Amendment No.

4 to Loan and Security Agreement dated April 24, 2020, the “Credit Agreement”),

dated as of April 9, 2018, by and among the Company’s subsidiaries Securus365, Inc., eVance Capital, Inc., and eVance

Inc., (the “Purchasers”) and GACP Finance Co., LLC, a Delaware limited liability company (“GACP”), as administrative

agent and collateral agent (“Agent”), and as the initial sole lender thereunder.

The purpose of Amendment No.

to remove the financial covenant whereby the Company’s was required to have a Fixed Charge Coverage Ratio not be less than

1.20:1.00, measured in each case on a trailing twelve-month basis.

In consideration for the removal of the

financial covenant requirement, the Credit Agreement was amended to include a requirement that the Company maintain a cash balance

in its controlled operating bank account of not less than $1,000,000.

Further, the repayment schedule under the note was amended

whereby the Company paid an amount equal to $450,000 upon execution of Amendment No.

Management’s Discussion

and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

The information in

this report contains forward-looking statements.

All statements other than statements of historical fact made in this report are

April 2021, the Company files a registration statement for the sale of securities of up to $75,000,000.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking

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

12 unchanged sentences

or other variations or similar words.

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, 2019 filed with the Securities and Exchange Commission.

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

You are cautioned not

to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q

or, in the case of documents referred to or incorporated by reference, the date of those documents.

The following discussion

and analysis should be read in conjunction with our unaudited financial statements, included herewith.

This discussion should not

be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached

herein will necessarily be indicative of actual operating results in the future.

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,

2020 filed with the Securities and Exchange Commission.

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.

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.

are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report

on Form 10-Q or, in the case of documents referred to or incorporated by reference, the date of those documents.

following discussion and analysis should be read in conjunction with our unaudited financial statements, included herewith.

This discussion

should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion

reached herein will necessarily be indicative of actual operating results in the future.

Such discussion represents only the best present

assessment of our management.

Company Overview and Description of

We were incorporated

in the State of Delaware on November 18, 2004 for the purpose of merging with OLB.com.

The merger was done for the purpose of changing

our state of incorporation from New York to Delaware.

In April 2018, we completed an acquisition of substantially all of the net

assets of Excel and its subsidiaries Payprotec Oregon, LLC, Excel Business Solutions, Inc.

Overview and Description of Business

were incorporated in the State of Delaware on November 18, 2004 for the purpose of merging with OLB.com.

The merger was done for the

purpose of changing our state of incorporation from New York to Delaware.

In April 2018, we completed an acquisition of substantially

all of the net assets of Excel and its subsidiaries Payprotec Oregon, LLC, Excel Business Solutions, Inc.

and eVance Processing, Inc.

are the foundation of our eVance business).

(such assets are the foundation of our eVance business).

In May 2018, we entered into share exchange agreements with Crowdpay and Omnisoft,

affiliate companies of our company’s majority stockholder, pursuant to which each of Crowdpay and Omnisoft became solely

owned subsidiaries of our Company.

affiliate companies of our company’s majority stockholder, pursuant to which each of Crowdpay and Omnisoft became solely owned

subsidiaries of our Company.

Our Company’s headquarters is located at 200 Park Avenue, Suite 1700, New York, NY 10166.

Our telephone number is (212) 278-0900.

We are a FinTech company

and PayFac that focuses on a suite of products in the merchant services and payment facilitator verticals 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

Our telephone

number is (212) 278-0900.

are a FinTech company and PayFac that focuses on a suite of products in the merchant services and payment facilitator verticals 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

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

We expect to build out our OmniSoft software business and to rely more on our PayFac model 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.

With respect to our

eVance business, our merchants are currently processing over $82,000,000 in gross transactions monthly and average approximately

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 our PayFac model 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.

respect to our eVance business, our merchants are currently processing over $82,000,000 in gross transactions monthly and average approximately

1,400,000 transactions a month.

These transactions come from a variety of sources including direct accounts and ISO channels.

accounts consist of businesses across the United States with no concentration of industries or merchants.

We have integrated

all the applications for OmniSoft and the ShopFast Omnicommerce solution with the eVance mobile payment gateway, SecurePay.comTM.

consist of businesses across the United States with no concentration of industries or merchants.

have integrated all the applications for OmniSoft and the ShopFast Omnicommerce solution with the eVance mobile payment gateway, SecurePay.comTM.

SecurePay.comTM, 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 will provide 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.

In July 2019, we launched a new merchant and ISO

boarding system that will be able to onboard merchants instantly.

This will provide 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.

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.

The total purchase price was

$270,000 (the “Purchase Price”) with $125,000 payable at closing;

(b) $25,000 payable within 90 days of the closing

and (c) $120,000 payable within 180 days of the closing.

The Purchase Price may be reduced by an amount that is equal to the percentage

of the decrease in average monthly revenue in the period from August 1, 2020 through October 31, 2020 compared with the

period from March 1, 2020 through April 30, 2020.

As of the date of this Report, the Company has not finalized the calculation

to determine if a reduction of the Purchase Price will occur.

Results of Operations

$215,000 (the “Purchase Price”) following post-closing adjustments.

of Operations

Management’s

discussion and analysis of financial condition and results of operations (“MD&A”) includes a discussion of the

consolidated results from operations of The OLB Group, Inc.

and its subsidiaries for the three and nine months ended September

30, 2020 and 2019.

Three Months Ended September 30,

2020 Compared to the Three Months Ended September 30, 2019

For the three months

ended September 30, 2020, we had total revenue of $2,308,037 compared to $2,477,432 of revenue for the three months ended September

30, 2019, a decrease of $327,166 or 13%.

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 months ended March 31, 2021 and 2020.

Months Ended March 31, 2021 Compared to the Three Months Ended March 31, 2020

the three months ended March 31, 2021, we had total revenue of $2,226,404 compared to $2,613,993 of revenue for the three months ended

March 31, 2020, a decrease of $387,589 or 14.8%.

We earned $2,090,264 in transaction and processing fees, $18,507 in merchant equipment

rental and sales and $157,248 in other revenue from monthly recurring subscriptions, during the three months ended September 30,

2020, compared to $2,455,937 in transaction and processing fees, $15,294 in merchant equipment rental and sales and $6,201 in other

revenue from monthly recurring subscriptions, in the same period in the prior period.

Our transaction and

processing fee revenue decreased $327,166 compared with the prior period, primarily due to initial impact of the COVID-19 pandemic

and the reduction in transactions processed while businesses were closed and customers stayed home in 2020.

While the volume of

processing transactions by merchants in March was relatively in-line with the Company’s expectations that the number

of transactions during March would be below the prior year because states in the United States began to implement stay-at-home orders,

the number of transactions and resulting revenue was approximately 15% lower in March than in February and 30% lower in April than

In May, when some states began to reopen businesses and relax stay-at-home orders, the number of transactions increased

whereby they were 5% higher than in April, and in June, transactions were 7% higher than May.

July, August and September have shown

month over month increases of 3%, 3% and 7% respectively.

For the three months

ended September 30, 2020, we had processing and servicing costs of $1,486,257 compared to $1,700,048 of processing and servicing

costs for the three months ended September 30, 2019.

Processing and servicing costs decreased by $213,791 or 13% because of the

decrease in the number of transactions processed during the period and the reasons discussed above relating to the COVID-19 pandemic.

Amortization expense

for the three months ended September 30, 2020 was $222,090 compared to $203,214 for the three months ended September 30, 2019,

an increase of $18,876 or 9%.

rental and sales and $117,633 in other revenue during the three months ended March 31, 2021, compared to $2,336,479 in transaction and

processing fees, $20,262 in merchant equipment sales and $257,252 in other revenue during the three months ended March 31, 2020.

Our transaction and processing

fee revenue decreased $246,215 compared with the prior period, primarily due to initial impact of the COVID-19 pandemic and the reduction

in the number of transactions processed while businesses were not at full capacity and customers stayed home in during the period.

more businesses reopen and expand capacity, transaction volume has continued to increase.

The Company expects volume to continue to increase

but still remain at a depressed level compared to pre-COVID volumes.

The depressed level can be attributed to the fact numerous businesses

are still operating at a limited capacity and that business have closed down.

In addition, the Company provides processing services to

businesses all across the United States.

Some areas of the United States continue to remain at lower-than-normal operating capacity more

than other regions.

the three months ended March 31, 2021, we had processing and servicing costs of $1,547,274 compared to $1,720,413 of processing and servicing

costs for the three months ended March 31, 2020.

Processing and servicing costs decreased by $173,139 or 10.1% because of the decrease

in the number of transactions processed during the period and the reasons discussed above relating to the COVID-19 pandemic.

expense for the three months ended March 31, 2021 was $215,904 compared to $203,214 for the three months ended March 31, 2020, an increase

of $12,690 or 6.2%.

We recorded amortization expense on our merchant portfolio and trademarks.

Salary and wage expense

for the three months ended September 30, 2020 was $318,682 compared to $342,338 for the three months ended September 30, 2019,

a decrease of $23,656 or 7%.

Salary and wage expense decreased in the current period due to the reductions in our sales force,

and other personnel made during 2019.

General and administrative

expenses (“G&A”) for the three months ended September 30, 2020 was $706,430 compared to $316,962 for the three

months ended September 30, 2019, an increase of $389,458 or 123%.

In the current period we had increases of our legal expense of

approximately $37,000 and our audit expense of approximately $69,000.

We also recognized an additional $170,000 of stock-based

compensation in the current period.

For the three months

ended September 30, 2020, we incurred $233,211 of interest expense, compared to $316,389 for the three months ended September 30,

2019, a decrease of $83,178 or 74%.

The decrease in interest expense is primarily due the conversion of all related party debt

during the quarter.

Our net loss for the

three months ended September 30, 2020 was $657,358 compared to $401,859 for the three months ended September 30, 2019.

increase in our net loss of $255,499 for the reasons discussed above.

Nine Months Ended September

30, 2020 Compared to the Nine Months Ended September 30, 2019

For the nine months

ended September 30, 2020, we had total revenue of $6,922,065 compared to $7,650,266 of revenue for the nine months ended September

30, 2019, a decrease of $1,281,415 or 17%.

We earned $6,297,146 in transaction and processing fees, $60,828 in merchant equipment

rental and sales and $564,091 in other revenue from monthly recurring subscriptions, during the nine months ended September 30,

2020, compared to $7,578,561 in transaction and processing fees, $53,118 in merchant equipment rental and sales and $18,587 in

other revenue from monthly recurring subscriptions in the same period in the prior period.

Our transaction and

processing fee revenue decreased $1,281,415 in the current period primarily due to merchant attrition and the initial impact of

the COVID-19 pandemic and the reduction in transactions processed while businesses were closed and customers stayed home.

the volume of processing transactions by merchants in March was relatively in-line with the Company’s expectations that

the number of transactions during March would be below the prior year because states in the United States began to implement stay-at-home orders,

the number of transactions and resulting revenue was approximately 15% lower in March than in February and 30% lower in April than

In May, when some states began to reopen businesses and relax stay-at-home orders, the number of transactions increased

whereby they were 5% higher than in April, and in June, transactions were 7% higher than May.

July, August and September have shown

month over month increases of 3%, 3% and 7% respectively.

For the nine months

ended September 30, 2020, we had processing and servicing costs of $4,501,274 compared to $5,096,694 of processing and servicing

costs for the nine months ended September 30, 2019.

Processing and servicing costs decreased by $595,420 or 12% because of the

decrease in the number of transactions processed during the period and the reasons discussed above relating to the COVID-19 pandemic.

Amortization expense

for the nine months ended September 30, 2020 was $628,519 compared to $609,643 for the nine months ended September 30, 2019, an

increase of $18,876 or 3%.

We record amortization expense on our merchant portfolio and trademarks.

Salary and wage expense

for the nine months ended September 30, 2020 was $1,036,068 compared to $1,143,733 for the nine months ended September 30,

2019, a decrease of $107,665 or 9%.

Salary and wage expense decreased in the current period due to the reductions in our sales

force, and other personnel made during 2019 and 2020 and not replaced in 2020.

G&A expense for

the nine months ended September 30, 2020 was $1,602,685 compared to $1,153,504 for the nine months ended September 30, 2019, an

increase of $449,181 or 39%.

Some of our larger G&A expenses included rent, stock-based compensation, professional fees and

computer and internet expense.

In the current period we incurred additional professional fees related to the completions of our

public offering and amendments to our senior and subordinated loans.

Audit fees were increased by approximately $39,000 and legal

and other professional fees increased by approximately $123,000.

We also recognized an additional $187,000 of stock-based compensation

in the current period.

For the nine months

ended September 30, 2020, we incurred $865,397 of interest expense, compared to $929,143 for the nine months ended September 30,

and wage expense for the three months ended March 31, 2021 was $820,091 compared to $400,188 for the three months ended March 31, 2020,

an increase of $419,903 or 104.9%.

Salary and wage expense increased in the current period due to bonuses paid to our CEO and President

for the Company’s performance in 2019 and 2020.

and administrative expenses (“G&A”) for the three months ended March 31, 2021 was $626,269 compared to $515,367 for the

three months ended March 31, 2020, an increase of $110,902 or 21.5%.

In the current period we had increases of our legal expense of approximately

$146,000 relating to ongoing litigation matters and the prepayment of the Term Loan.

This was offset by a decrease in our audit fees

the three months ended March 31, 2021, we incurred $116,736 of interest expense, compared to $317,441 for the three months ended March

31, 2020, a decrease of $200,705 or 146%.

The decrease in interest expense is primarily due the conversion of all related party debt

during the quarter.

for the nine months ended September 30, 2020 was $1,709,974 compared to $1,281,642 for the nine months ended September 30, 2019.

We had an increase in our net loss of $428,332 for the reasons discussed above.

Liquidity and Capital Resources

Trends and Uncertainties

The Company’s

future financial condition and results of operations may be adversely affected by the recent COVID-19 pandemic.

The New York and Atlanta

areas, which include the location of the Company’s corporate headquarters and its operations business, have experienced and

continue to experience a significant impact of the COVID-19 pandemic in the U.S.

The Company is currently following the recommendations

of local health authorities to minimize exposure risk for its employees and visitors.

However, the scale and scope of the ongoing

pandemic is unknown, and the duration of the business disruption and related financial impact cannot be reasonably estimated at

While the Company is currently implementing specific business continuity plans to reduce the potential impact of the

ongoing COVID-19 pandemic during 2020 and believe that its business being principally operated using digital platforms, in the

long-term, will suffer minimal negative impact, there is no guarantee that the Company’s continuity plan will be successful,

that the Company’s merchants will meet the number of forecasted transactions due to a change in consumer activity around

point of sale purchasing resulting from the temporary closure of businesses.

The Company has already

experienced certain disruptions to its business and disruptions for the Company’s customers and merchants that may materially

affect the number of transactions processed by the Company.

Similarly, the response to and duration of the COVID-19 pandemic could

have a long-term impact on the Company’s customers and/or merchants during and after 2020 which could reduce their demand

for Company products.

The extent to which the COVID-19 pandemic or any other health epidemic may impact the Company’s results

for 2020 and beyond will depend on future developments, which are highly uncertain and cannot be predicted, including new information

which may emerge concerning the severity of the economic impact of the response to the COVID-19 pandemic.

Accordingly, the COVID-19

pandemic could have a material adverse effect on the Company’s business, results of operations, financial condition and prospects

during 2020 and beyond.

Changes in Cash Flows

For the nine months

ended September 30, 2020, $529,118 of cash was used by operating activities, which included our net loss, offset by $616,813

for amortization and depreciation expense, $223,788 for stock-based compensation and net changes in operating assets and liabilities

For the nine months ended September 30, 2019, $188,957 in cash was used by operating activities, offset by $422,502

for amortization and depreciation expense, $132,525 for stock-based compensation, and net changes in operating assets and liabilities

For the nine months

ended September 30, 2020 and 2019, we used $125,000 and $0, respectively, of cash used for investing activities.

The $125,000 represents

the purchase price in connection with the POSaBIT Asset Acquisition.

For the nine months

ended September 30, 2020, we received net cash of $4,269,142 from financing activities.

$1,370,155 was repaid on our loan

We received $236,231 from the Paycheck Protection Program loan under the CARES Act and a total of $4,942,881 from the

sale of stock and warrants.

During the nine months ended September 30, 2019, $132,789 in cash was provided by financing activities

from related party loans.

Liquidity and

Capital Resources

At September 30, 2020,

the Company had cash of $4,122,640 and working capital of $3,412,449.

For the three and nine months ended September 30, 2020, the

Company’s net loss was $657,358 and $1,709,974, respectively.

In connection with

the response to the COVID-19 pandemic in the United States, the Company has experienced disruptions to its business and has observed

disruptions with its customers and merchants, which has resulted in a decline in transaction volume.

While the volume of processing

transactions by merchants in March was relatively in-line with the Company’s expectations that the number of transactions

during March would be below the prior year because states in the United States began to implement stay-at-home orders, the

number of transactions and resulting revenue was approximately 15% lower in March than in February and 30% lower in April than

In May, when some states began to reopen businesses and relax stay-at-home orders, the number of transactions increased

whereby they were 5% higher than in April, and in June, transactions were 7% higher than May.

July, August and September have shown

month over month increases of 3%, 3% and 7%, respectively.

The Company’s

revenue during the period of time decreased and then increased in the amount similar to the percentage of month-to-month transaction

Despite recent increases in volume, the Company estimates that the number of transactions will continue to stay at a depressed

level or further decline from the prior year, along with revenues, until the response to the COVID-19 pandemic relaxes further

stay-at-home restrictions and allows customers to make more point of purchase transactions for merchants, customers become

more comfortable shopping in stores and/or more merchants provide for additional contactless and online purchase options.

The anticipated

amount of decline from prior year is unknown, but it will be impacted by when consumers return to the level of purchasing that

occurred in the prior year and before the pandemic.

However, additional closings and reopenings of businesses or if additional

businesses cease to operate in the future will likely result in a month over month decline and then increase similar to what occurred

in March through June 2020.

On August 11, 2020,

the Company closed an offering of its securities (the “Offering”) for gross proceeds of $6.45 million.

sold 700,000 units consisting of (a) one share of our common stock;

The decrease in interest expense is due the conversion of all related party debt and the repayment

of the Term Loan.

net loss for the three months ended March 31, 2021 was $1,099,857 compared to $542,207 for the three months ended March 31, 2020.

had an increase in our net loss of $557,650 for the reasons discussed above.

and Capital Resources

and Uncertainties

Company’s future financial condition and results of operations may be adversely affected by the prolongation of theCOVID-19 pandemic

and any need to institute additional business capacity restrictions or temporary closures.

New York and Atlanta areas, which include the location of the Company’s corporate headquarters and its operations business, have

experienced and continue to experience a significant impact of the COVID-19 pandemic in the U.S.

In New York, certain types of businesses

continue to remain at a reduced capacity.

The Company is continues to follow the recommendations of local health authorities to minimize

exposure risk for its employees and visitors.

However, the scale and scope and duration of the ongoing pandemic remains unknown, and

the ongoing business disruption and related financial impact cannot be reasonably estimated at this time as different states have different

regulations relating to business capacity.

While the Company has implemented specific business continuity plans to reduce the potential

impact of the ongoing COVID-19 pandemic during 2021 and believe that its business being principally operated using digital platforms,

in the long-term, will suffer minimal negative impact, there is no guarantee that the Company’s continuity plan will be successful,

that the Company’s merchants will meet the number of forecasted transactions due to a change in consumer activity around point

of sale purchasing resulting from the temporary closure of businesses.

In 2020 and the first three months

of 2021, the Company continued to experience certain disruptions to its business and disruptions for the Company’s customers and

merchants, along with closures, that may materially affect the number of transactions processed by the Company.

Similarly, the COVID-19

pandemic could have a long-term impact on the Company’s customers and/or merchants during 2021 which could reduce their demand for

Company products, if pre-pandemic levels of purchasing activity does not resume.

The extent to which the COVID-19 pandemic or any other

health epidemic may impact the Company’s results for 2021 and beyond will depend on future developments, which are highly uncertain

and cannot be predicted, including the impact of vaccinations, the impact of the reopening of international travel and new information

which may emerge concerning the severity of the economic impact of the response to the COVID-19 pandemic on the retail and service industries

where the Company has many customers and merchants.

Accordingly, the COVID-19 pandemic could continue to have a material adverse effect

on the Company’s business, results of operations, financial condition and prospects during 2021 and beyond.

in Cash Flows

the three months ended March 31, 2021, $939,764 of cash was used by operating activities, which included our net loss, offset by $154,425

for amortization and depreciation expense, $74,011 for stock-based compensation and net changes in operating assets and liabilities of

the three months ended March 31, 2021 and 2020, no cash was used for investment activities.

For the three months ended March

31, 2021, we used net cash of $493,903 in financing activities.

$7,654,845 was repaid on our loan to GACP.

We received a total of $7,160,940

from the exercise of warrants issued in the Offering.

and Capital Resources

At March 31, 2021, the Company

had cash of $2,390,822 and working capital of $2,325,957.

For the three months ended March 31, 2021, the Company’s net loss was

In connection with the response to the COVID-19 pandemic in the United States, the Company has experienced disruptions to

its business and has observed disruptions with its customers and merchants, which has resulted in a decline in transaction volume.

to the first three months of 2020, the first three months of 2021 volume declined by 11%.

This decrease began in March 2020 as COVID-19

restrictions and business capacity rules were implemented across the United States.

After a decrease during March through June of 2020,

transaction volume began to increase throughout 2020 as third quarter 2020 transaction volume increased by 16% compared to the second

quarter of 2020.

During the first quarter of 2021, transaction volume increased by 2% compared to the fourth quarter of 2020 reflecting

continued recovery of transaction volume, despite the year over year decrease of 11% during the first three months of 2021 compared with

As COVID-19 restrictions and business capacity rules ease across the country, the Company expects transactions volume to continue

Company’s revenue during the period of time decreased and then increased in the amount similar to the percentage of month-to-month

transaction volume.

Despite recent increases in volume, the Company estimates that the number of transactions will continue to stay at

a depressed level, along with revenues, until the economic impact of and response to the COVID-19 pandemic allows customers to make

more point of purchase transactions for merchants, customers become more comfortable shopping in stores and/or more merchants provide

for additional contactless and online purchase options.

The anticipated amount of decline from prior year is unknown, but it will be

impacted by when consumers return to the level of purchasing that occurred in the prior year and before the pandemic.

However, additional

closing and reopening of businesses or if additional businesses cease to operate in the future will likely result in a month over month

decline and then increase similar to what occurred in March through June 2020.

August 11, 2020, the Company closed an offering of its securities (the “Offering”) for gross proceeds of $6.45 million.

Company sold 700,000 units consisting of (a) one share of our common stock;

(b) two Series A Warrants, and (c) one-half of

one Series B warrant.

In addition, the underwriter fully exercised its option to purchase 210,000 Series A warrants and 52,500

Series B warrants.

While 20% of the net proceeds of $5.5 million was used to repay a portion of our outstanding Term Loan, immediately

following the Offering, the Company had cash of $5.6 million on hand.

As such, the Company believes it will be able fund future

liquidity and capital requirements through cash flows generated from its operating activities for a period of at least twelve months

from the date its condensed consolidated financial statements are issued.

On August 11, 2020,

Herzog converted $3,612,940 of indebtedness into 3,612 shares of Series A Preferred Stock (the terms of which are described

below) and 802,875 Series A Conversion Warrants with an exercise price of $9.00 and 200,719 Series B Conversion Warrants with an

exercise price of $4.50.

Also, on August 11,

Yakov converted $1,021,512 of indebtedness into 1,021 shares of Series A Preferred Stock (the terms of which are described

below) and 227,003 Series A Conversion Warrants with an exercise price of $9.00 and 56,751 Series B Conversion Warrants with an

exercise price of $4.50.

Following the reduction

in the Term Loan and conversion of debt held by Messrs.

Herzog and Yakov, the Company has $8.4 million of outstanding debt.

In addition, the underwriter fully exercised its option to purchase 210,000 Series A warrants and 52,500 Series

While 20% of the net proceeds of $5.5 million was used to repay a portion of our outstanding Term Loan, immediately following

the Offering, the Company had cash of $5.6 million on hand.

As such, the Company believes it will be able fund future liquidity and capital

requirements through cash flows generated from its operating activities for a period of at least twelve months from the date its condensed

consolidated financial statements are issued.

August 11, 2020, Mr.

Herzog converted $3,612,940 of indebtedness into 3,612 shares of Series A Preferred Stock (the terms of which are

described below) and 802,875 Series A Conversion Warrants with an exercise price of $9.00 and 200,719 Series B Conversion Warrants with

an exercise price of $4.50.

on August 11, 2020, Mr.

Yakov converted $1,021,512 of indebtedness into 1,021 shares of Series A Preferred Stock (the terms of which

are described below) and 227,003 Series A Conversion Warrants with an exercise price of $9.00 and 56,751 Series B Conversion Warrants

with an exercise price of $4.50.

March 2, 2021, the Company, utilizing a portion of funds received upon the exercise of outstanding warrants, paid approximately $7.7

million to the Agent under the Credit Agreement (the “Prepayment”).

This Prepayment resulted in the discharge in full of

all of the obligations under the Credit Agreement.

In connection with the extinguishment of the obligations under the Credit Agreement,

40,000 warrants to purchase Common Stock were cancelled.

the payment and discharge of the Term Loan and conversion of indebtedness held by Messrs.

Herzog and Yakov, the Company has approximately

$549,200 of outstanding liabilities.

addition, the Company has received a Paycheck Protection Program loan under the CARES Act for approximately $236,000 (the “PPP

Loan”).

The Paycheck Protection Program provides that the use of PPP Loan proceeds were limited to certain

qualifying expenses and may be partially or wholly forgiven in accordance with the requirements set forth in the CARES Act.

Company believes it has used the PPP Loan for permitted uses whereby it will be forgiven in full, although no assurance

can be given that the Company will obtain forgiveness of all or any portion of amounts due under the PPP Loan.

The Company reviewed

its cash flow for 2020, projected cash flow from operations for 2021 and 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.

As a result of the improved transaction volume trends the Company experienced

in the three months ended September 30, 2020, as well as the above discussed capital raises, the Company believes it has sufficient

liquidity in order to sustain operations for a period of at least twelve months .

Additional Information Regarding Our

Credit Agreement

On August 10, 2020

GACP, as agent to the senior lenders, waived the Company’s default on June 30, 2020 of the financial covenant relating to

GACP further acknowledged and agreed that the Company’s payment of 20% of the net proceeds of its public offering

which closed on August 11, 2020 does not constitute a scheduled payment required to be included when calculating the Fixed Charge

Coverage Ratio.

On October 23, 2020,

the Company entered into Amendment No.

5 to Loan and Security Agreement (“Amendment No.

5”) amending the Loan and Security

Agreement (as amended by Amendment No.

1 to Loan and Security Agreement dated July 30, 2018, Amendment No.

3 to Loan and Security

Agreement dated February 5, 2019, Amendment No.

4 to Loan and Security Agreement dated April 24, 2020, the “Credit Agreement”),

dated as of April 9, 2018, by and among the Company’s subsidiaries Securus365, Inc., eVance Capital, Inc., and eVance

Inc., (the “Purchasers”) and GACP Finance Co., LLC, a Delaware limited liability company (“GACP”), as administrative

agent and collateral agent (“Agent”), and as the initial sole lender thereunder.

The purpose of Amendment No.

to remove the financial covenant whereby the Company’s was required to have a Fixed Charge Coverage Ratio not be less than

1.20:1.00, measured in each case on a trailing twelve-month basis.

In consideration for

the removal of the financial covenant requirement, the Credit Agreement was amended to include a requirement that the Company maintain

a cash balance in its controlled operating bank account of not less than $1,000,000.

Further, the repayment schedule under the

note was amended whereby the Company paid an amount equal to $450,000 upon execution of Amendment No.

Although, we believe

we are currently in compliance, we have not complied with these obligations at certain times since the Credit Agreement was entered

into and were obligated to obtain certain waivers and modifications of these provisions to avoid an acceleration event under the

Credit Agreement.

If we are not able to remain in compliance with these obligations, the creditor may accelerate the maturity of

the loan or may require us to adhere to stricter financial covenants in exchange for a waiver.

While we expect to comply with these

financial covenants, we cannot guarantee our ability to do so.

the Because the maturity date is April 9, 2022, the Company is exploring

refinancing solutions for more advantageous terms for its long-term debt.

If the Company is unable to refinance its debt or is

unable to satisfy its obligations as they become due, the Company may be required to sell assets to repay all or part of the debt

or replace the debt with less favorable terms.

Pursuant to the terms

of the Credit Agreement and following Amendment No.

5, the Company is required to maintain the following financial covenants in

order to avoid an event of default, ) net revenue of the Company shall not be less than (x) until June 30, 2021 $9,000,000 and

(y) from and after July 1, 2021, $10,000,000.

on a trailing twelve-month basis.

The Fixed Charge Coverage Ratio is defined as the

ratio of (A) EBITDA for each fiscal month minus unfinanced capital expenditures (but not less than zero) for such fiscal month

to (B) the sum of (i) all principal payments scheduled to be made during or with respect to such period, plus (ii) all interest

expense for such period paid or required to be paid in cash during such period, plus (iii) all federal, state, and local income

taxes paid or required to be paid for such period, plus (iv) all cash distributions, dividends, redemptions and other cash payments

made or required to be made during such period with respect to equity issued by the Company.

Other Indebtedness

On July 24, 2020,

the terms of the agreement whereby Mr.

Herzog agreed to convert, concurrently with the public offering of the Company’s securities,

$3,522,191 in principal amount of indebtedness (plus any additional accrued interest and other fees thereon that accrues prior

to the offering) into shares of convertible Series A Preferred were amended such that Mr.

The Paycheck Protection Program provides that the use of PPP Loan proceeds was limited to certain qualifying

expenses and may be partially or wholly forgiven in accordance with the requirements set forth in the CARES Act.

The Company believes

it has used the PPP Loan for permitted uses whereby it will be forgiven in full, although no assurance can be given that

the Company will obtain forgiveness of all or any portion of amounts due under the PPP Loan.

The Company has reviewed projected operating cash

flows for 2021 and 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.

As a result of the improved transaction volume

trends the Company experienced in the three month period ended March 31, 2021, as well as the funds received from the capital raises discussed

above, the Company believes it has sufficient liquidity in order to sustain operations for at least of the following twelve months.

July 24, 2020, the terms of the agreement whereby Mr.

Herzog agreed to convert, concurrently with the public offering of the Company’s

securities, $3,522,191 in principal amount of indebtedness (plus any additional accrued interest and other fees thereon that accrues

prior to the offering) into shares of convertible Series A Preferred were amended such that Mr.

Herzog agreed to convert such an

1 unchanged sentence

Preferred Stock and Conversion Warrants would be issued concurrently with the closing of the public offering.

On August 11, 2020,

Herzog converted $3,612,940 of indebtedness into 3,612 shares of Series A Preferred Stock (the terms of which are described

below) and 802,875 Series A Conversion Warrants with an exercise price of $9.00 and 200,719 Series B Conversion Warrants with an

exercise price of $4.50.

On July 24, 2020,

the terms of the agreement whereby Mr.

Yakov agreed to convert, concurrently with the public offering of the Company’s securities,

$1,011,016 in principal amount of indebtedness and accrued interest, which includes deferred salary and unreimbursed expenses (plus

any additional accrued interest and other fees thereon that accrues prior to the offering), into shares of convertible Series A

On August 11, 2020, Mr.

Herzog converted $3,612,940 of indebtedness into 3,612 shares of Series A Preferred Stock (the terms of which are described below) and

802,875 Series A Conversion Warrants with an exercise price of $9.00 and 200,719 Series B Conversion Warrants with an exercise price

July 24, 2020, the terms of the agreement whereby Mr.

Yakov agreed to convert, concurrently with the public offering of the Company’s

securities, $1,011,016 in principal amount of indebtedness and accrued interest, which includes deferred salary and unreimbursed expenses

(plus any additional accrued interest and other fees thereon that accrues prior to the offering), into shares of convertible Series A

Preferred Stock to be designated concurrently with the offering such conversion were amended such that Mr.

Yakov agreed to

convert an aggregate of $1,017,573 of accrued salary, indebtedness and accrued interest into Series A Preferred Stock and conversion

warrants, which Series A Preferred Stock and conversion warrants would be issued concurrently with the closing of the offering.

August 11, 2020, Mr.

Yakov converted $1,021,512 of indebtedness into 1,021 shares of Series A Preferred Stock (the terms of which

are described below) and 227,003 Series A Conversion Warrants with an exercise price of $9.00 and 56,751 Series B Conversion Warrants

with an exercise price of $4.50.

Critical Accounting Policies

Refer to our Form 10-K

for the year ended December 31, 2019, for a full discussion of our critical accounting policies.

QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

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.

Yakov agreed to convert

an aggregate of $1,017,573 of accrued salary, indebtedness and accrued interest into Series A Preferred Stock and conversion warrants,

which Series A Preferred Stock and conversion warrants would be issued concurrently with the closing of the offering.

11, 2020, Mr.

Yakov converted $1,021,512 of indebtedness into 1,021 shares of Series A Preferred Stock (the terms of which are described

below) and 227,003 Series A Conversion Warrants with an exercise price of $9.00 and 56,751 Series B Conversion Warrants with an exercise

price of $4.50.

Accounting Policies

to our Form 10-K for the year ended December 31, 2020, for a full discussion of our critical accounting policies.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements