What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-12 compared with 2021-08-12 · 323 added, 221 removed, 380 unchanged (59% of the section changed)

Financial Statements

TO FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets as of June 30, 2021 (unaudited) and December 31, 2020

Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)

Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2021, and 2020 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020 (unaudited)

INDEX TO FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets as of September 30, 2021 (unaudited) and December 31, 2020

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)

Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2021, and 2020 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020 (unaudited)

Notes to the Condensed Consolidated Financial Statements (unaudited)

OLB Group, Inc.

The OLB Group, Inc.

and Subsidiaries

Consolidated Balance Sheets

Condensed Consolidated

Balance Sheets

September 30,

Current Assets:

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Stockholders’ Equity:

Preferred stock, ($ 0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding at June 30, 2021 and December 31, 2020)

Series A Preferred stock, ($ 0.01 par value, 10,000 shares authorized, 4,633 shares issued and outstanding at June 30, 2021 and December 31, 2020)

Preferred stock, ($ 0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding at September 30, 2021 and December 31, 2020)

Series A Preferred stock, ($ 0.01 par value, 10,000 shares authorized, 4,633 shares issued and outstanding at September 30, 2021 and December 31, 2020)

Common stock, $ 0.0001 par value;

200,000,000 shares authorized, 7,273,877 and 6,170,054 shares issued and outstanding at June 30, 2021 and December 31, 2020

200,000,000 shares authorized, 8,701,532 and 6,170,054 shares issued and outstanding, respectively

Additional paid-in capital

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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

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

OLB Group, Inc.

T he accompanying notes are an integral

part of these unaudited condensed consolidated financial statements.

The OLB Group, Inc.

and Subsidiaries

Consolidated Statements of Operations

For the Three Months Ended

For the Six Months Ended

Condensed Consolidated Statements of Operations

For the Three Months

September 30,

For the Nine Months

September 30,

Transaction and processing fees

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Weighted average shares outstanding, basic and diluted

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

OLB Group, Inc.

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements.

The OLB Group, Inc.

and Subsidiaries

Consolidated Statements of Stockholders’ Equity

the Three and Six Months ended June 30, 2021 and 2020

Condensed Consolidated Statements of Stockholders’

For the Three and Nine Months ended September

30, 2021 and 2020

Preferred Stock

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$ ( 22,394,599 )

Common stock and warrants sold for cash

Warrants converted to common stock

Stock based compensation

Options issued for intangible assets

Balance at September 30, 2021

$ ( 23,294,953

Preferred Stock

Balance at January 1, 2020

9 unchanged sentences

( 3,703,824 )

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

OLB Group, Inc.

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

Warrants issued for services

Balance at September 30, 2020

$ ( 20,561,853 )

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements.

The OLB Group, Inc.

and Subsidiaries

Consolidated Statements of Cash Flows

For the Six Months Ended

Condensed Consolidated Statements of Cash Flows

For the Nine Months

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

4 unchanged sentences

Stock based compensation

Common stock issued for services – related party

Operating lease expense

11 unchanged sentences

Acquisition of intangible assets

Purchase of property and equipment

( 6,003,300 )

Net Cash used in Investing Activities

( 6,068,300 )

CASH FLOWS FROM FINANCING ACTIVITIES:

2 unchanged sentences

( 7,654,845 )

( 1,370,155 )

Proceeds from exercise of warrants

Net proceeds from sale of common stock and warrants

Proceeds from sale of warrants

Payment of offering costs

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Cash Paid For:

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

OLB Group, Inc.

Supplemental Non-Cash Disclosure:

Establish operating lease asset and related liability

Stock options issued for intangible asset

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements.

The OLB Group, Inc.

and Subsidiaries

to the Condensed Consolidated Financial Statements

1 – BACKGROUND

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.

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.

Notes to the Condensed Consolidated Financial

September 30, 2021

NOTE 1 – BACKGROUND

The 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’s Securus365, Inc.

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.

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.

To date, the activities of this subsidiary have

been nominal.

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 customers to sell a store’s

products in a physical, retail setting.

To date, the activities of this subsidiary have been nominal when compared to the overall business.

On May 14, 2021, the Company formed OLBit, Inc., a wholly owned subsidiary (“OLBit”).

of OLBit is to hold the Company’s assets and operate its business related to its emerging cryptocurrency-related lending and transactional

The 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 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 June 30, 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 not seen a material impact on its business since states began to roll back restrictions on businesses in the United States.

2 – 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.

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.

(“OmniSoft”) operates

a software platform for small merchants.

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

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

To date, the activities of this subsidiary have been nominal when compared

to the overall business.

On May 14, 2021, the Company formed OLBit, Inc.,

a wholly owned subsidiary (“OLBit”).

The purpose of OLBit is to hold the Company’s assets and operate its business related

to its emerging cryptocurrency-related lending and transactional business.

On July 23, 2021, the Company formed DMINT, Inc.,

a wholly owned subsidiary (“DMINT”).

The purpose of DMINT is to operate its business related to cryptocurrency mining.

On July 28, 2021, the Company entered into an

exclusive agreement with Cai Energy Blockchain, Inc.

(“CAI”) whereby CAI provided the Company with an exclusive natural gas

supply agreement (the “Services”).

In exchange for the Services, the Company granted CAI options to purchase up to 767,918 shares

of Common Stock, $ 0.0001 par value (with a fair value of approximately $ 4.5 million on the date of grant) at an exercise price

of $ 0.0001 per share.

The natural gas will be used in connection with the Company’s, newly launched, cryptocurrency mining

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.

to the pandemic, the Company has been working with merchants to address potential changes to the purchase patterns of consumers.

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 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 September 30, 2021, most employees were no longer working remotely and had returned to the office.

However, the Company continues to

monitor and follow the advice of federal and state authorities.

The Company has not seen a material impact on its business since states

began to roll back restrictions on businesses in the United States.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING

Basis of Presentation

The Company’s consolidated financial statements

have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

Use of Estimates

The preparation of financial statements in conformity

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.

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.

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, Omnisoft.

OLBit and DMINT.

All significant

intercompany transactions and balances have been eliminated.

Reclassifications

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

for the three and six months ended June 30, 2021.

Concentration

of Credit Risk

Financial instruments that potentially expose the Company to concentration

of credit risk consist primarily of cash and accounts receivable.

The Company’s cash is deposited with major financial institutions.

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, 2021.

Concentration of Credit Risk

Financial instruments that potentially expose

the Company to concentration of credit risk consist primarily of cash and accounts receivable.

The 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”).

30, 2021, the Company had $ 1,496,003 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 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 dilutive potentially outstanding shares of common stock during the period.

The weighted average number of common

shares for the six months ended June 30, 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 six months

ended June 30, 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 June 30, 2021 and December 31, 2020.

As of September 30, 2021, the Company had $ 913,055 of cash above the FDIC’s $ 250,000 coverage limit.

Net Loss per Share

Basic net loss per share of common stock 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 dilutive 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, 2021

and 2020 does not include warrants to acquire up to 3,778,533 and 3,353,698 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, 2021 and

2020 does not include up to 11,112 and 172,437 options, respectively, to purchase common stock because of their anti-dilutive

Accounts Receivable

Accounts 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

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 September 30, 2021 and December 31, 2020.

Reserve for Chargeback Losses

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revenue disaggregated by revenue source:

For the Three Months Ended

For the Six Months Ended

For the Three Months

September 30,

For the Nine Months

September 30,

Revenue from contracts with customers:

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NOTE 3 – LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2021, the Company had cash of approximately

$ 2.1 million and working capital of approximately $ 1.9 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 these condensed consolidated financial

statements are issued.

At September 30, 2021, the Company had cash of

approximately $ 1.2 million and working capital of approximately $ 869,000 .

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 these condensed consolidated

financial statements are issued.

NOTE 4 – INTANGIBLE ASSETS

Intangible assets, net, consist of the following

September 30,

Merchant Portfolios

3 unchanged sentences

Net residual portfolios

September 30,

Less Accumulated Amortization

3 unchanged sentences

Total intangible assets, net

September 30,

Mineral rights for natural gas

Less Accumulated Amortization

Net mineral rights

Total intangible assets, net

Amortization expense for the three months ended

June 30, 2021 and 2020 was $ 215,903 and $ 203,214 , respectively.

Amortization expense for the six months ended

June 30, 2021 and 2020 was $ 431,807 and $ 406,429 , respectively.

September 30, 2021 and 2020 was $ 269,475 and $ 222,090 , respectively.

Amortization expense for the nine months ended

September 30, 2021 and 2020 was $ 701,280 and $ 628,519 , respectively.

The Company’s merchant portfolios and tradename

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

2021 (six months)

2021 (three months)

The weighted average remaining useful life of

amortizing intangible assets was 2.58 years at June 30, 2021.

amortizing intangible assets was 2.33 years at September 30, 2021.

NOTE 5 – NOTE PAYABLE

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(the “Credit Agreement”).

On 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.

On 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

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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.

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

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.

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.

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options to purchase 6,667 shares of common stock pursuant to the terms on the Company’s employment agreement with Mr.

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

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.

On July 28, 2021, the Company entered into an

exclusive agreement with Cai Energy Blockchain, Inc.

(“CAI”) whereby CAI provided the Company with an exclusive natural gas

supply agreement (the “Services”).

In exchange for the Services, the Company granted CAI options to purchase up to 767,918 shares

of Common Stock, $ 0.0001 par value (with a fair market value equal to $ 4.5 million on the date of grant) at an exercise price

of $ 0.0001 per share.

The aggregate fair value of the options totaled $ 4,499,952 based on the Black Scholes Merton pricing model

using the following estimates:

exercise price of $ 0.0001 , 1.26 % risk free rate, 143.3 % volatility and expected life of the options

A summary of the status of the Company’s

outstanding stock options and changes during the six months ended June 30, 2021 is presented below:

outstanding stock options and changes during the nine months ended September 30, 2021 is presented below:

Stock Options

Weighted Average Exercise Price

Aggregate Intrinsic Value

Weighted Average

Options outstanding at January 1, 2020

Options outstanding December 31, 2020

Options outstanding June 30, 2021

Shares exercisable at June 30, 2021

Options outstanding September 30, 2021

Shares exercisable at September 30, 2021

NOTE 7 – WARRANTS

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(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,” and together with the Series A Warrants, the “Warrants”), with each whole Series B Warrant entitling the

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,” 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

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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.

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

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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” basis pursuant to a formula set

forth in the terms of the Series B Warrants.

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” basis pursuant

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

Each holder of the Warrants will be subject to

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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.

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

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.

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.

18, 2021, the Company sold, in a registered direct offering, an aggregate of 1,418,605 shares of common stock and in a concurrent

private placement, warrants to purchase up to 1,418,605 shares of common stock, at an aggregate purchase price of $ 4.30 per Share and

associated Warrant.

The Warrants will be exercisable six months from the date of issuance at an exercise price of $5.42 per share and

will expire five and one-half years following the initial date of issuance.

Outstanding, December 31, 2018

6 unchanged sentences

Outstanding, December 31, 2020

Underwriter Warrants

Warrant A Exercised

Warrant B Exercised

Outstanding, June 30, 2021

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

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

Outstanding, September 30, 2021

(1) Includes 210,000 Warrant

A granted to Underwriters upon exercise of overallotment in connection with the Offering

(2) Includes 525,000 Warrant

B granted to Underwriters upon exercise of overallotment in connection with the Offering

NOTE 8 – OPERATING LEASE

6 unchanged sentences

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.

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

6 unchanged sentences

Total lease liability

Lease obligations at June 30, 2021 consisted of

the following:

Lease obligations at September 30, 2021 consisted

of the following:

For the year ended December 31:

2021 – six months

2021 – three months

Total payments

3 unchanged sentences

Lease obligation – long term

Rent expense for the three months ended June 30,

Rent expense for the three months ended September

30, 2021 and 2020, was $ 24,909 and $ 26,848 , respectively.

Rent expense for the six months ended June 30,

Rent expense for the nine months ended September

30, 2021 and 2020, was $ 74,726 and $ 83,300 , respectively.

At June 30, 2021, the weighted average remaining

At September 30, 2021, the weighted average remaining

lease term is 2.17 years and the weighted average discount rate is 5 %.

1 unchanged sentence

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.

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.

2 unchanged sentences

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

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.

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.

Dividends accrue

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,

19 unchanged sentences

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.

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 10 – COMMITMENTS AND CONTINGENCIES

6 unchanged sentences

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 ).

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.

1 unchanged sentence

NOTE 11 – SUBSEQUENT EVENTS

On July 23, 2021, the Company formed DMINT, Inc.,

a wholly owned subsidiary (“DMINT”).

The purpose of DMINT is to operate its business related to cryptocurrency mining.

On July 28, 2021, the Company entered into an

exclusive agreement with Cai Energy Blockchain, Inc.

(“CAI”) whereby CAI provided the Company with an exclusive natural gas

supply agreement (the “Services”).

In exchange for the Services, the Company granted CAI options to purchase up to 767,918

shares of Common Stock, $ 0.0001 par value (with a fair market value equal to $ 4.5 million on the date of grant) at an exercise price of

$ 0.0001 per share.

The natural gas will be used in connection with the Company’s, newly launched, cryptocurrency-related mining

On October 25, 2021, the Board of Directors of

the Company approved entry by the Company into a share exchange agreement (“Agreement”) between the Company and all of the

shareholders of Crowd Ignition, Inc.

(“Crowd Ignition”) whereby the Company would purchase 100 % of the equity of Crowd Ignition

in exchange for 1,318,408 shares of the common stock, par value $ 0.0001 of the Company (the “Shares”).

The value of the Shares

was, for purposes of the Agreement, based on the closing trading price of the Company on October 1, 2021 (the date on which a third-party

fairness opinion was issued), resulting in an aggregate purchase price for Crowd Ignition of $ 5.3 million.

On November 2, 2021, the Company entered into a securities purchase

agreement (the “Purchase Agreement”) with certain institutional accredited investors (the “Investors”) pursuant

to which the Company issued and sold, in a private placement (the “Private Placement”), (i) 1,969,091 shares (the “Shares”)

of its common stock, par value $0.0001 per share (the “Common Stock”),(ii) pre-funded warrants (the “Prefunded Warrants”)

exercisable for a total of up to 2,576,364 shares of Common Stock (the “Prefunded Warrant Shares”) with an exercise price

of $0.0001 per Prefunded Warrant Share, and (iii) warrants (the “Common Warrants”) exercisable for a total of 4,545,455 shares

of Common Stock (the “Common Warrant Shares” and together with the Prefunded Warrant Shares, the “Warrant Shares”)

with an exercise price of $6.50 per Common Warrant Share.

The purchase price of each share of Common Stock and associated Common Warrant

is $ 5.50 and the purchase price of each Prefunded Warrant and associated Common Warrant is $ 5.4999 .

Subject to certain ownership limitations,

the Common Warrants are immediately exercisable upon issuance and will expire on the five-year anniversary of the effective date of the

initial registration statement filed with respect to the Common Shares.

The Prefunded Warrants are immediately exercisable upon issuance

and may be exercised at any time until all of the Prefunded Warrants are exercised in full.

The Company received notice on October 11, 2021

that the $236,000 PPP Loan had been entirely forgiven.

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