What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2022-03-28 compared with 2021-03-30 · 945 added, 930 removed, 159 unchanged (92% of the section changed)

Financial Statements and Supplementary Data

OLB Group, Inc.

31, 2020 and 2019 Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2020 and 2019

Consolidated Statements of Operations for the Years Ended December 31, 2020 and 2019

Consolidated Statements of Stockholders’

Deficit for the Years Ended December 31, 2020 and 2019

Consolidated Statements of Cash Flows for the Years Ended December 31, 2020 and 2019

Notes to the Consolidated Financial Statements

of Independent Registered Public Accounting Firm

Financial Statements and Supplementary

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID # 229 ) F-2

Consolidated Balance Sheets at December 31, 2021 and 2020 F-4

Consolidated Statements of Operations for the Years Ended December 31, 2021 and 2020 F-5

Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2021 and 2020 F-6

Consolidated Statements of Cash Flows for the Years Ended December 31, 2021 and 2020 F-7

Notes to the Consolidated Financial Statements F-8

Report of Independent Registered Public Accounting

To the Board of Directors and Stockholders

2 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance

sheet of The OLB Group, Inc.

(the “Company”) at December 31, 2020, and the related consolidated statements operations, stockholders’

equity and cash flows for the year ended December 31, 2020, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31,

2020, and the results of its operations and its cash flows for the year ended December 31, 2020, in conformity with accounting principles

generally accepted in the United States of America.

We have audited the accompanying consolidated

balance sheet of The OLB Group, Inc.

(the “Company”) at December 31, 2021 and 2020, and the related consolidated statements

operations, stockholders’ equity and cash flows for each of the two years in the periods ended December 31, 2021 and 2020, and the

related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all

material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash

flows for each of the two years in the period ended December 31, 2021 and 2020, in conformity with accounting principles generally accepted

in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are

required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

These consolidated financial statements are the

responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements

based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated

3 unchanged sentences

As part of our audits, we are required to obtain an understanding

of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material

misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as

evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for

Critical Audit Matter

The critical audit matter communicated below are matters

arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,

subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements,

taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit

matters or on the accounts or disclosures to which they relate.

Intangible Assets Impairment

As described in Notes 2 and

4 to the consolidated financial statements, the Company has goodwill and intangible assets of $9.5 million at December 31, 2020.

cases, no directly observable market inputs are available to measure the fair value to determine if the asset is impaired.

an estimate is derived indirectly and is based on net present value techniques utilizing post-tax cash flows and discount rates.

The estimates

that management used in calculating the net present values depend on assumptions specific to the nature of the service activities with

regard to the amount and timing of projected future cash flows;

Our audits included performing procedures to assess

the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide

a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below

is a matter arising from the current period audit of the financial statements that were communicated or required to be communicated to

the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our

especially challenging, subjective, or complex judgments.

The communication of critical audit matter does not alter in any way our opinion

on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions

on the critical audit matter or on the accounts or disclosures to which they relate.

Continued from previous page

Intangible Assets Impairment Assessments

As described in Notes 2 and 4 to the consolidated

financial statements, the Company has goodwill and intangible assets of $28.9 million at December 31, 2021.

In most cases, no directly

observable market inputs are available to measure the fair value to determine if the asset is impaired.

Therefore, an estimate is derived

indirectly and is based on net present value techniques utilizing post-tax cash flows and discount rates.

The estimates that management

used in calculating the net present values depend on assumptions specific to the nature of the management service activities with regard

to the amount and timing of projected future cash flows;

long-term forecasts;

actions of competitors (competing services), future

tax and discount rates.

The principal considerations

for our determination that performing procedures relating to the intangible assets impairment assessment is a critical audit matter are

the significant judgment by management when developing the net present value of the intangible assets.

This in turn led to a high degree

of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related

to the amount and timing of projected future cash flows and the discount rate.

Addressing the matter involved

performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing management’s process for developing the fair value estimate;

evaluating the appropriateness of

the net present value techniques;

actions of competitors (competing services), future tax

and discount rates.

The principal considerations for our determination

that performing procedures relating to the intangible assets impairment assessment is a critical audit matter are the significant judgment

by management when developing the net present value of the intangible assets.

This in turn led to a high degree of auditor judgment, subjectivity,

and effort in performing procedures and evaluating management’s significant assumptions related to the amount and timing of projected

future cash flows and the discount rate.

In addition, the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures

and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures

included testing management’s process for developing the fair value estimate;

evaluating the appropriateness of the net present

value techniques;

testing the completeness and accuracy of underlying data used in the model;

and evaluating the significant

assumptions used by management, including the amount and timing of projected future cash flows and the discount rate.

Evaluating management’s

and evaluating the significant assumptions

used by management, including the amount and timing of projected future cash flows and the discount rate.

Evaluating management’s

assumptions related to the amount and timing of projected future cash flows and the discount rate involved evaluating whether the assumptions

3 unchanged sentences

Daszkal Bolton LLP

We have served as the Company’s

auditor since 2020

We have served as the Company’s auditor since 2020

Boca Raton, Florida

March 24, 2022

REPORT OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM

To the Shareholders and Board of Directors

The OLB Group, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated

balance sheet of The OLB Group, Inc.

and Subsidiaries (the “Company”) as of December 31, 2019, and the related consolidated

statements of operations, changes in stockholders’

deficit and cash flows for the year then ended, and the related notes

(collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly,

in all material respects, the financial position of the Company as of December 31, 2019, and the results of its operations and

its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility

of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with

the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether

the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have,

nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required

to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the

effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures

to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures

in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable

basis for our opinion.

/s/ Marcum llp

We served as the Company’s auditor from 2019 to 2020.

April 29, 2020

OLB Group, Inc.

and Subsidiaries

8 unchanged sentences

Intangible assets, net

Deferred offering costs

Operating lease right-of-use asset

Operating lease right-of-use assets

Other long-term assets

LIABILITIES AND STOCKHOLDERS’

EQUITY (DEFICIT)

Total Other Assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts payable

Accrued expenses –

related party

Accrued expenses

Operating lease liability –

current portion

Deferred revenue

Note payable –

current portion

Note payable –

related parties –

current portion

Merchant portfolio purchase installment obligation

Operating lease liability – current portion

Note payable – current portion

Total Current Liabilities

Long Term Liabilities:

Note payable –

related party

Notes payable, net of current portion

Operating lease liability –

net of current portion

Operating lease liability – net of current portion

Total Liabilities

Commitments and contingencies (Note 10)

Stockholders’

Equity (Deficit):

Stockholders’ Equity:

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

Common stock, $0.0001 par value;

200,000,000 shares authorized, 6,170,054 and 5,411,905 shares issued and outstanding, respectively

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

Common stock, $ 0.0001 par value, 200,000,000 shares authorized, 11,984,396 and 6,170,054 shares issued and outstanding at December 31, 2021 and 2020, respectively

Additional paid-in capital

2 unchanged sentences

( 20,628,606 )

Total Stockholders’

Equity (Deficit)

TOTAL LIABILITIES AND STOCKHOLDERS’

EQUITY (DEFICIT)

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

OLB Group, Inc.

Total Stockholders’ Equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

T he accompanying notes are an integral part

of these consolidated financial statements.

The OLB Group, Inc.

and Subsidiaries

3 unchanged sentences

Merchant equipment rental and sales

Revenue, net - cryptocurrency mining

Other revenue from monthly recurring subscriptions

2 unchanged sentences

Processing and servicing costs, excluding merchant portfolio amortization

Amortization expense

Amortization and depreciation expense

Salaries and wages

Professional fees

General and administrative expenses

1 unchanged sentence

Loss from operations

( 4,764,739 )

Other income (expense):

1 unchanged sentence

Interest expense, related party

Gain on settlement of payables

Gain on forgiveness of debt

Litigation expense

Total other expense

1 unchanged sentence

$ ( 4,978,358 )

$ ( 1,776,727 )

Net loss per share, basic and diluted

Weighted average shares outstanding, basic and diluted

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

OLB Group, Inc.

The accompanying notes are an integral part

of these consolidated financial statements.

The OLB Group, Inc.

and Subsidiaries

Statements of Stockholders’

Equity (Deficit)

the Years ended December 31, 2020 and 2019

Consolidated Statements of Stockholders’

For the Years

ended December 31, 2021 and 2020

Preferred Stock

3 unchanged sentences

Stock based compensation

Conversion of debt – related party

Common stock units issued for cash

Warrants sold for cash

Common stock issued for exercise of Warrants

Common stock issued for services – related party

( 1,776,727 )

Balance at December 31, 2020

1 unchanged sentence

Stock based compensation

Conversion of debt –

related party

Common stock issued exercise of warrants – related party

Options issued for intangible assets

Common stock units issued for cash

Warrants sold for cash

Common stock issued exercise of Warrants

Common stock issued for services –

related party

Common stock issued for director service

Common stock issued for exercise of warrants

( 4,978,358 )

Balance at December 31, 2021

$ ( 25,606,964 )

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

OLB Group, Inc.

The accompanying notes are an integral part

of these consolidated financial statements.

The OLB Group, Inc.

and Subsidiaries

4 unchanged sentences

$ ( 1,776,727 )

Adjustments to Reconcile Net Loss to Net Cash Used in Operations:

Adjustments to reconcile net loss to net cash provided by and used in operations:

Depreciation and amortization

Stock based compensation

Common stock issued for services –

related party

Common stock issued for services – related party

Operating lease expense

Gain on forgiveness of debt

Changes in assets and liabilities:

3 unchanged sentences

Accounts payable

Accrued expenses –

related party

Accrued expenses – related party

Other accrued liabilities

Deferred revenue

Net Cash (used in) provided by Operating Activities

Net cash provided by (used in) operating activities

( 3,508,082 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of property and equipment

( 9,596,599 )

Acquisition of intangible assets

( 16,065,001 )

Net cash used in investing activities

( 25,661,600 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from notes payable –

related party

Proceeds from note payable

Payments on note payable

( 7,654,845 )

( 1,845,155 )

Proceeds from exercise of warrants

Proceeds from sale of common stock units

Proceeds from exercise of options – related party

Proceeds from sale of warrants

2 unchanged sentences

Net change in cash

Beginning of Year

Cash – beginning of year

Cash – end of year

Cash paid for:

1 unchanged sentence

Establishment of ROU operating lease asset and related liability

Conversion of debt –

related party

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

OLB Group, Inc.

Conversion of debt – related party

Merchant portfolio purchase installment obligation

Options issued for acquisition of natural gas rights

The accompanying notes are an integral part

of these consolidated financial statements.

The OLB Group, Inc.

and Subsidiaries

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.

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

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”

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

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.

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 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 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.

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 December 31,

2020, most employees were no longer working remotely.

However, the Company continues to monitor and follow the advice of federal

and state authorities.

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”).

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.

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.

Notes to the Consolidated Financial Statements

December 31, 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 and business

Fintech Services:

The Company provides integrated financial and

transaction processing services (“Fintech Services”) to businesses throughout the United States.

Through its eVance Capital,

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.

(“Securus365”)

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 $ 1,000,000 -$ 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”).

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.

Cryptocurrency 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 (“Cryptocurrency

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.

The Company generates its revenue through two

business segments its Fintech Services and Cryptocurrency Business segments.

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 December 31, 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.

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 year ended December 31, 2020.

segments are defined as components of an enterprise about which separate financial information is available that is evaluated

regularly by the chief operating decision maker, or decision–making group in deciding how to allocate resources and in assessing

Our chief operating decision–making group is composed of the chief executive officer.

We currently operate

in one segment surrounding our ISO operations.

and Cash Equivalents

Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties, and all highly liquid debt

instruments purchased with a maturity of three months or less as cash and cash equivalents.

The carrying amount of financial instruments

included in cash and cash equivalents approximates fair value because of the short maturities for the instruments held.

had no cash equivalents as of December 31, 2020 and 2019.

Concentration

of Credit Risk

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”).

As of December 31, 2020, the Company had $3,573,882 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 potentially outstanding shares of common stock during the period.

The weighted average number of common shares

for the year ended December 31, 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 year ended December

31, 2019 and 2018 does not include 172,438 and 223,249 options, respectively, to purchase common stock because of their anti-dilutive

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

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

December 31, 2020 and 2019, 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 back”

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.

For the years ended December 31, 2020 and 2019, we

had losses related to chargebacks of approximately $5,000 and $111,500, respectively.

and Equipment

and equipment is stated at cost less accumulated depreciation and amortization.

Depreciation of property and equipment is calculated

using the straight-line method over the estimated useful lives of the assets, which range from three to seven years.

improvements are amortized over the lesser of the remaining term of the lease or the estimated useful life of the asset.

for repairs and maintenance are expensed as incurred.

of Long-Lived Assets

Company periodically reviews the carrying value of its long-lived assets held and used at least annually or when events and circumstances

warrant such a review.

If significant events or changes in circumstances indicate that the carrying value of an asset or asset

group may not be recoverable, the Company performs a test of recoverability by comparing the carrying value of the asset or asset

group to its undiscounted expected future cash flows.

Cash flow projections are sometimes based on a group of assets, rather than

a single asset.

If cash flows cannot be separately and independently identified for a single asset, the Company determines whether

impairment has occurred for the group of assets for which it can identify the projected cash flows.

If the carrying values are

in excess of undiscounted expected future cash flows, it measures any impairment by comparing the fair value of the asset group

to its carrying value.

If the fair value of an asset or asset group is determined to be less than the carrying amount of the asset

or asset group, impairment in the amount of the difference is recorded.

portfolios are valued at fair value of merchant customers on the date of acquisition and are amortized over their estimated useful

lives (7 years).

Company accounts for business combinations under the acquisition method of accounting in accordance with Accounting Standards

Codification (“ASC”) 805, “Business Combinations,”

where the total purchase price is allocated to the

tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values.

price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after

obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates.

The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed

is recognized as goodwill.

Company tests for indefinite lived intangibles and goodwill impairment in the fourth quarter of each year and whenever events

or circumstances indicate that the carrying amount of the asset exceeds its fair value and may not be recoverable.

In accordance

with ASU 2017-04, Intangibles - Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment ., the

Company performed a quantitative assessment of indefinite lived intangibles and goodwill and determined there was no impairment

as of at December 31, 2020 and 2019.

are accounted for using the acquisition method of accounting.

The purchase price of an acquisition is allocated to the assets

acquired and liabilities assumed using the estimated fair values at the acquisition date.

Transaction costs are expensed as incurred.

Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible

assets acquired and identified based on their estimated fair values.

The excess of the fair value of purchase consideration over

the fair values of these identifiable assets and liabilities is recorded as goodwill.

Such valuations require management to make

significant estimates and assumptions, especially with respect to intangible assets.

Significant estimates in valuing certain

intangible assets include, but are not limited to, future expected cash flows from acquired customer lists, acquired technology,

and trade names from a market participant perspective, useful lives and discount rates.

Management’s estimates of fair value

are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual

results may differ from estimates.

During the measurement period, which is one year from the acquisition date, we may record adjustments

to the assets acquired and liabilities assumed, with the corresponding offset to goodwill.

Upon the conclusion of the measurement

period, any subsequent adjustments are recorded to earnings.

account for equity-based transactions with nonemployees under the provisions of ASC Topic No.

505-50, Equity-Based Payments

to Non-Employees (“ASC 505-50”).

ASC 505-50 establishes that equity-based payment transactions with nonemployees

shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever

is more reliably measurable.

The fair value of common stock issued for payments to nonemployees is measured at the market price

on the date of grant.

The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option

valuation model.

In general, we recognize the fair value of the equity instruments issued as deferred stock compensation and amortize

the cost over the term of the contract.

account for employee stock-based compensation in accordance with the guidance of Financial Accounting Standards Board (“FASB”)

ASC Topic 718, Compensation —

Stock Compensation, which requires all share-based payments to employees, including

grants of employee stock options, to be recognized in the financial statements based on their fair values.

The fair value of the

equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during

which services are rendered.

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 merchant, the Company records the amount it receives from the processor net

of interchange and other processing fees as revenue.

Disaggregation

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

For the Years Ended

Certain reclassifications have been made to the

prior year financial information to conform to the presentation used in the financial statements for year ended December 31, 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”).

As of December 31, 2021, the Company had $ 3,220,339 of cash in excess of the FDIC’s $ 250,000 coverage limit.

Operating Segments

Operating segments are defined as components of

an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”),

or decision maker group, in deciding how to allocate resources to an individual segment and in assessing performance.

Our chief operating

decision–making group is composed of the chief executive officer and Vice President.

The Company has two operating segments as of

December 31, 2021.

See Note 15, “Segment Information”.

Stock-based compensation

We account for equity-based transactions with

employees and non-employees under the provisions of FASB ASC Topic 718, “Compensation – Stock Compensation” (Topic

718) , which establishes that equity-based payments to employees and non-employees are recorded at the grant date the fair value of

the equity instruments the entity is obligated to issue when the employees and non-employees have rendered the requisite service and satisfied

any other conditions necessary to earn the right to benefit from the instruments.

Topic 718 also states that observable market prices

of identical or similar equity or liability instruments in active markets are the best evidence of fair value and, if available, should

be used as the basis for the measurement for equity and liability instruments awarded in these share-based payment transactions.

if observable market prices of identical or similar equity or liability instruments are not available, the fair value shall be estimated

by using a valuation technique or model that complies with the measurement objective, as described in FASB ASC Topic 718.

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 year ended December 31, 2021 and 2020 does not

include warrants to acquire 9,963,127 and 3,353,698 shares of common stock, respectively, because of their anti-dilutive effect.

average number of common shares for the year ended December 31, 2021 and 2020 does not include 772,362 and 172,438 options, respectively,

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

Property and Equipment

Property and equipment is stated at cost less

accumulated depreciation and amortization.

Depreciation of property and equipment is calculated using the straight-line method over the

estimated useful lives of the assets, which range from three to seven years.

Leasehold improvements are amortized over the lesser of the

remaining term of the lease or the estimated useful life of the asset.

Expenditures for repairs and maintenance are expensed as incurred.

Impairment of Long-Lived Assets

The Company periodically reviews the carrying

value of its long-lived assets held and used at least annually or when events and circumstances warrant such a review.

If significant

events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable, the Company performs

a test of recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows.

flow projections are sometimes based on a group of assets, rather than a single asset.

If cash flows cannot be separately and independently

identified for a single asset, the Company determines whether impairment has occurred for the group of assets for which it can identify

the projected cash flows.

If the carrying values are in excess of undiscounted expected future cash flows, it measures any impairment

by comparing the fair value of the asset group to its carrying value.

If the fair value of an asset or asset group is determined to be

less than the carrying amount of the asset or asset group, impairment in the amount of the difference is recorded.

Merchant Portfolios

Merchant portfolios are valued at fair value of

merchant customers on the date of acquisition and are amortized over their estimated useful lives ( 7 years).

The Company accounts for business combinations

under the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805, “Business

Combinations,” where the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities

assumed based on their estimated fair values.

The purchase price is allocated using the information currently available, and may be adjusted,

up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed

and revisions to preliminary estimates.

The purchase price in excess of the fair value of the tangible and identified intangible assets

acquired less liabilities assumed is recognized as goodwill.

The Company tests for indefinite lived intangibles

and goodwill impairment in the fourth quarter of each year and whenever events or circumstances indicate that the carrying amount of the

asset exceeds its fair value and may not be recoverable.

In accordance with ASU 2017-04, Intangibles - Goodwill and Other (Topic

Simplifying the Test for Goodwill Impairment , the Company performed a quantitative assessment of indefinite lived intangibles

and goodwill and determined there was no impairment at December 31, 2021 and 2020.

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 $ 0 and $ 38,000 as of December 31, 2021 and 2020, respectively.

Reserve for Chargeback Losses

Disputes 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 back” 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.

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.

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 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:

For the Years

Revenue from contracts with customers:

2 unchanged sentences

Other transaction and processing fees

Total Revenue

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

(“ASC 606”).

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.

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.

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.

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.

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

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.

Company allocates a portion of the consideration received from these arrangements to a financing component when it determines

that a significant financing component exists.

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.

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.

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.

During the year ended December 31, 2020, the Company

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

As such, $99,594 of revenue recognized during the year ended December 31, 2020 pertained to services provided in the

prior period.

As of December 31, 2020, there was no revenue that required deferment.

During the year ended December 31, 2019,

$223,670 of revenue was recognized from performance obligations satisfied (or partially satisfied) in previous periods in connection

with a legal settlement.

Adopted Accounting Standards

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

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.

The Company adopted the ASU effective January 1, 2020,

using the modified retrospective transition method.

Under this method, there was no cumulative impact adjustment necessary with

the adoption to our accumulated deficit on January 1, 2020.

Our 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 840.

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 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 Impairment .

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

December 31, 2019, the Company had liabilities in excess of assets in the amount of approximately $2.8 million.

During 2020, the

Company incurred a net loss of approximately $1.8 million and consumed cash in operating activities of approximately $0.3 million.

During 2020, the Company received proceeds of approximately $4.9 million from the sale of common stock units, and extinguished

approximately $4.6 million of indebtedness from the conversion of related party debt.

December 31, 2020, the Company had cash of approximately $3.8 million and working capital of approximately $3.2 million.

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

assets, net, consist of the following as of:

Total transactions and processing fees

The Company recognizes revenue under ASC 606,

“Revenue from Contracts with Customers” (“ASC 606”).

The Company determines revenue recognition through the following

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.

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

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

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.

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.

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 exists.

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.

Cryptocurrency mining

The Company has entered into digital asset mining

pools by executing contracts, as amended from time to time, with the mining pool operators to provide computing power to the mining pool.

The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the

Company provides computing power to the mining pool operator.

In exchange for providing computing power, the Company is entitled to a

fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining

pool operator which are immaterial and are recorded as a deduction from revenue), for successfully adding a block to the blockchain.

Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to

the total computing power contributed by all mining pool participants in solving the current algorithm.

Providing computing power to solve complex cryptographic

algorithms in support of the Bitcoin blockchain (in a process known as “solving a block”) is an output of the Company’s

ordinary activities.

The provision of providing such computing power is the only performance obligation in the Company’s contracts

with mining pool operators.

The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures

at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company

has earned the award from the pools.

The consideration is all variable.

Because it is not probable that a significant reversal of cumulative

revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first

to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized.

There is no significant financing component in these transactions.

Fair value of the cryptocurrency award received

is determined using the quoted price of the related cryptocurrency at the time of receipt.

Each individual unit of cryptocurrency held

by the Company is a separate unit of account.

There is currently no specific definitive guidance under GAAP or alternative accounting

framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in

determining the appropriate accounting treatment.

In the event authoritative guidance is enacted by the Financial Accounting Standards

Board (“FASB”), the Company may be required to change its policies, which could have an effect on the Company’s consolidated

financial position and results from operations.

NOTE 3 – LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2021, the Company had cash of

approximately $ 3.5 million and working capital of approximately $ 1,800,000 .

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 consolidated financial

statements are issued.

NOTE 4 – INTANGIBLE ASSETS

Intangible assets, net, consist of the following

Merchant Portfolios

Less accumulated amortization

( 1,562,798 )

( 1,199,184 )

Net residual portfolios

Less accumulated amortization

( 1,500,000 )

( 1,000,000 )

Net trade name

expense for the years ended December 31, 2020 and 2019 was $844,423 and $812,857, 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:

weighted average remaining useful life of amortizing intangible assets was 3.08 years at December 31, 2020.

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”).

April 24, 2020, the Company entered into Amendment No.

4 to Loan and Security Agreement amending the Credit Agreement.

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

(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.

In addition, 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.

Further, 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.

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.

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

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.

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.

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

following the execution of Amendment No.

4, we are in compliance, we have been out of compliance at certain times with these obligations

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.

Total interest expense for the GACP loan incurred

during the years ended December 31, 2020 and 2019 was $807,982 and $866,875, respectively.

Accrued interest as of December 31,

CBD Merchant Portfolio

Less accumulated amortization

Net trade name

Exclusive agreement to purchase natural gas

Less accumulated amortization

Net mineral rights

Total intangible assets, net

Amortization expense for the years ended December

31, 2021 and 2020 was $ 1,241,589 and $ 844,423 , respectively.

5 to Loan and Security Agreement

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

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

The purpose of Amendment No.

5 was 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.

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.

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.

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

STOCK OPTIONS

On January 1, 2019, 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 $0.03 and expire in three years after

each vest date.

The aggregate fair value of the options totaled $39,814 based on the Black Scholes Merton pricing model using the

following estimates:

exercise price of $0.03, 2.47% risk free rate, 104.8% 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 November 13, 2019, the Company entered

into an agreement with the above holder of 265,172 common stock options and on November 25, 2019, the Company entered into an agreement

with the holder of 13,334 common stock options, whereby the Company and option holders each agreed that the exercise price pertaining

to those options would not be adjusted for the effects of the Reverse Stock Split.

As are result, the exercise price of $0.03 associated

with the options granted to the VP of Finance was modified to be $0.0001, and the exercise price of $0.03 associated with the options

granted to Mr.

Yakov was modified to be $0.001.

The Company evaluated the impact of the option modification and concluded that

there was no material impact to the consolidated financial statements.

January 1, 2020, 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

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:

The Company’s merchant portfolios

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

The Company’s agreement to purchase natural

gas is being amortized over the useful life of 10 years.

The following sets forth the estimated amortization

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

The weighted average remaining useful life of

amortizing intangible assets was 6.20 years at December 31, 2021.

NOTE 5 – PROPERTY AND EQUIPMENT

Long lived assets, including property and equipment

assets to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying

value of the assets may not be recoverable.

Impairment losses are recognized if expected future cash flows of the related assets are less

than their carrying values.

Measurement of an impairment loss is based on the fair value of the asset.

Long-lived assets to be disposed

of are reported at the lower of carrying amount or fair value less cost to sell.

Property and equipment are first recorded at cost.

Depreciation and is computed using the straight-line method over the estimated useful lives of the various classes of assets.

Maintenance and repair expenses, as incurred,

are charged to expense.

Betterments and renewals are capitalized in plant and equipment accounts.

Cost and accumulated depreciation applicable

to items replaced or retired are eliminated from the related accounts with any gain or loss on the disposition included as income.

Assets stated at cost, less accumulated depreciation consisted of the

Furniture and Fixtures

Office Equipment

Computer Software

Leasehold Improvements

Cryptocurrency Mining Equipment

Less accumulated depreciation

( 1,154,470 )

Property and Equipment, net

Depreciation expense

Depreciation expense for the years ended December

31, 2021 and 2020 was $ 649,310 and $ 16,846 , respectively.

NOTE 6 – NOTE PAYABLE

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”).

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

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

On 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.

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.

received notice on October 11, 2021 that the $236,000 PPP Loan had been entirely forgiven resulting in the recognition of a gain on extinguishing

On November 24, 2021, we entered into an Asset

Purchase Agreement (the “Agreement”) dated as of November 15, 2021 with FFS Data Corporation (“Seller”) whereby

we acquired a portfolio of merchants in the Cannabidiol (or “CBD”) industry, along with other merchants utilizing financial

transaction processing services (the “Purchased Assets”).

The purchase price is $ 20 million, with $ 16 million paid at

closing, $ 2 million payable within six months after closing, and a $ 2 million payment to be transferred to an escrow account, contingent

upon an Attrition Adjustment, as described in the Agreement.

Company management has not recognized a liability for the contingent

payment amount.

NOTE 7 – STOCK OPTIONS

On 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 $0.001 per 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 year ended December 31, 2020 is

presented below:

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 nine months ended December 31, 2021 is presented below:

Stock Options

Exercise Price

Aggregate Intrinsic

Options outstanding at January 1, 2019

Weighted Average

Options outstanding at January 1, 2020

Options outstanding December 31, 2020

Options outstanding December 31, 2021

Shares exercisable at December 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,”

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 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 (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”).

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”).

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.

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.

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.

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 date.

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”

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

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

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

Pursuant to and as additional consideration

for the Term Loan under the Credit Agreement, on April 9, 2018 the Company issued to GACP a Warrant to purchase 40,000 shares of

common stock of the Company The warrants have an exercise price of $7.50 and expire in three years.

The aggregate fair value of

the warrants, which was charged to interest expense, totaled $7,660 based on the Black Scholes Merton pricing model using the following

exercise price of $7.50, 2.28% risk free rate, 114.11% volatility and expected life of the warrants of 3 years.

Number of Warrants

Weighted Average

Exercise Price

Weighted Average Remaining Contract Term

Outstanding, December 31, 2018

NOTE 8 – WARRANTS

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 of:

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

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.

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

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

$ 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 the remainder of the net proceeds from the Offering for working capital and other general corporate

purposes and to acquire merchant portfolios and technologies that are synergistic with or complimentary to our business and expand our

current products (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 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” 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” 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.

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.

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.

On November 2, 2021, the Company entered into

a series of securities purchase agreements with certain institutional accredited investors pursuant to which the Company issued and sold,

in a private placement (i) 1,969,091 shares of the Company’s Common Stock (ii) pre-funded warrants exercisable for a total of 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 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.

Outstanding, December 31, 2019

5 unchanged sentences

Outstanding, December 31, 2020

Includes 210,000

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

Includes 52,5000

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

RELATED PARTY TRANSACTIONS

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

The Company used the proceeds received to make the initial payment under the Credit Agreement.

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.

March 1, 2019, the Company entered into Amendment No.

1 to Subordinated Promissory Note (the “Subordinated Note Amendment”)

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 30, 2020.

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

2 to the subordinated

promissory note with Mr.

The purpose of the amendment was to amend the maturity date of such subordinated promissory note

such that it will be extended until September 30, 2022.

interest expense on the loans from Mr.

Herzog for the years ended December 31, 2020 was $33,321 and $360,000, respectively.

accrued interest as of December 31, 2020 and December 31, 2019 was $0 and $402,849, respectively.

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.

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.

The Company believes the equity investment in the Company is significant and indicates that

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.

of December 31, 2019, the Company had total accrued compensation due, and advances to be repaid, to Mr.

Yakov in the amounts of

$568,027 and $17,684, respectively.

No similar amounts were owed to Mr.

Yakov at December 31, 2020.

Yakov, CEO has loaned funds to the

Company for working capital purposes.

As of December 31, 2019 the balance on these loans was $386,467.

The loans were unsecured,

bear interest at 12% and were due on demand.

As of December 31, 2019 there was $22,279 of interest accrued on these loans.

loan amounts were owed to Mr.

Yakov at or during the year ended December 31, 2020.

expense for the years ended December 31, 2020 and 2019 was $23,125 and $21,096, respectively.

May 13, 2020, 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,

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.

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.

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.

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

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.

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

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.

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 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.

OPERATING LEASE

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.

Underwriter Warrants

Warrant A Exercised

Warrant B Exercised

Underwriter Warrant Exercised

( 1,176,364 )

Outstanding, December 31, 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 9 – OPERATING LEASES

On June 24, 2020, eVance, Inc.

entered into a Lease Agreement (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

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

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

On January 11, 2022, DMINT entered into two leases

(the “Leases”) in Bradford, Pennsylvania relating to a combined 10,000 square feet of property located at the Bradford Regional

Airport Authority multi-tenant building in Lafayette Township.

The facility is in the process of being converted into a cryptocurrency

mining data center powered on the local power grid in tandem with natural gas power.

The location will be used for DMINT’s mining

operation with capacity for up to 2,000 Antminer S19j PRO machines.

The Leases are each for a term of five years , ending on the later

of the date of occupancy and November 10, 2026.

The monthly base rent for “Cell 3”, comprising 4,000 square feet, is $ 1,667

The monthly base rent for “Cell 4”, comprising 6,000 square feet, is $ 2,500 per month.

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.

lease term of the Leases is $ 250,00 and $ 8,768 is payable as a security deposit.

Balance Sheet Classification

2 unchanged sentences

Total lease asset

Operating lease liability –

current portion

Operating lease liability – current portion

Current operating lease liability

Operating lease liability –

noncurrent portion

Operating lease liability – noncurrent portion

Long-term operating lease liability

Total lease liability

obligations at December 31, 2020 consisted of the following:

Lease obligations at December 31, 2021 consisted

of the following:

For the year ended December 31:

3 unchanged sentences

Less current portion

Lease obligation –

expense for the year ended December 31, 2020 was $91,052 and $97,488, respectively.

December 31, 2020, the weighted average remaining lease term is 2.92 years and the weighted average discount rate is 5%.

PREFERRED STOCK

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.

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

Holders of 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.

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.

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’

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.

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

COMMITMENTS AND CONTINGENCIES

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.

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,

Lease obligation – long term

Rent expense for the years ended December 31,

2021 and 2020, was $ 106,201 and $ 91,052 , respectively.

NOTE 10 - COMMON STOCK

On August 18, 2021, the Company sold,

in a registered direct offering, units comprised of 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,

for total net proceeds of $ 6,100,000 .

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 common stock, along with warrants to purchase up to 7,121,819 shares of common stock, for total net proceeds

of approximately $22,918,000.

Refer to Note 12 for common stock issued to related

NOTE 11 – 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.

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 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

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

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.

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 include,s 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 12 – RELATED PARTY TRANSACTIONS

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.

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.

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.

The Company believes the equity investment in the Company is significant and indicates

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.

On May 13, 2020, 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, 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.

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.

On July 24, 2020, the terms of the agreement

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

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.

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 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.

On November 19, 2021, the company granted 10,800

shares of common stock to Alina Dulimof, Director, for services.

The shares were valued at $ 4.63 , the closing stock price on the date

of grant, for total non-cash stock compensation expense of $ 50,004 .

On November 19, 2021, the company granted 10,800

shares of common stock to Amir Sternhell, Director, for services.

The shares were valued at $ 4.63 , the closing stock price on the date

of grant, for total non-cash stock compensation expense of $ 50,004 .

On November 19, 2021, the company granted 14,039

shares of common stock to Ehud Ernst, Director, for services.

The shares were valued at $ 4.63 , the closing stock price on the date of

grant, for total non-cash stock compensation expense of $ 65,001 .

NOTE 13 – 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 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).

On December 11, 2019, the Company

entered into a settlement agreement to resolve disputes in ongoing litigation it initiated, relating to a portfolio of merchants

acquired by the Company when it acquired Payprotec Oregon, LLC (the “Portfolio”), whereby it received the sum of $734,250.

The Company recorded $172,390 of the settlement to a gain in other income.

This was the portion of the settlement allocated to

the period prior to April 9, 2018.

The remaining $561,860 has been recognized in revenue for the year ended December 31, 2019,

out of which $223,670 are performance obligations relating to the prior year.

taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating

loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences.

Temporary differences

are the differences between the reported amounts of assets and liabilities and their tax bases.

Deferred tax assets are reduced

by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred

tax assets will not be realized.

deferred tax assets consist of the following components as of December 31:

See Note 16 - Subsequent Events for additional information on changes in 2022.

The Company had an adverse litigation judgment

against it during the fiscal year which included damages and attorney fees in favor of the Plaintiff.

The Company has appealed the judgment

of both the award of damages and attorney fees.

The timeline for a ruling on the appeal is unknown.

The Company believes that it has sufficient

grounds to prevail on its appeal.

As the amount of the judgement is known the Company has accounted for it as an accrued expense.

NOTE 14 — INCOME TAX

Deferred taxes are provided on a liability method

whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred

tax liabilities are recognized for taxable temporary differences.

Temporary differences are the differences between the reported amounts

of assets and liabilities and their tax bases.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management,

it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Net deferred tax assets consist of the following

components as of December 31:

Deferred Tax Assets:

NOL Carryover

Payroll accrual

Allowance for Doubtful Accounts

Related party accrual

Depreciation and amortization

Less valuation allowance

( 3,129,605 )

( 2,268,658 )

Net deferred tax assets

income tax provision differs from the amount of income tax determined by applying the U.S.

federal income tax rate to pre-tax

income from continuing operations for the period ended December 31, due to the following:

The income tax provision differs from the amount

of income tax determined by applying the U.S.

federal income tax rate to pre-tax income from continuing operations for the period ended

December 31, due to the following:

$ ( 1,045,000 )

$ ( 373,000 )

Meals and entertainment

Stock based compensation

Non deductible expenses

Other adjustments

Adjustment to deferred tax asset

Valuation allowance

December 31, 2020, the Company had operating loss carry forwards of approximately $6,630,000, $3,415,000 of which expire from

2040, and no expiration on the remaining amount.

In accordance with Section 382 of the Internal Revenue code, the

usage of the Company’s net operating loss carryforwards may be limited in the event of a change in ownership.

A full Section

382 analysis has not been prepared and NOLs could be subject to limitation under Section 382.

Company’s policy is to record interest and penalties on uncertain tax positions as a component of income tax expense.

interest or penalties were recorded during the years ended December 31, 2020 and 2019.

The Company is currently not aware of any

issues under review that could result in significant payments, accruals or material deviation from its position in the next twelve

Company files income tax returns in the U.S.

federal jurisdiction, New York and Georgia which remain subject to examination by

the various taxing authorities beginning with the tax year ended December 31, 2017 (or the tax year ended December 31, 2001 if

the Company were to utilize its NOLs).

No tax audits were commenced or were in process during the years ended December 31, 2020

SUBSEQUENT EVENTS

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.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

At December 31, 2021,

the Company had operating loss carry forwards of approximately $9,006,000, $3,417,000 of which expire from 2021 – 2040, and no expiration

on the remaining amount.

In accordance with Section 382 of the Internal Revenue code, the usage of the Company’s net operating loss

carryforwards may be limited in the event of a change in ownership.

A full Section 382 analysis has not been prepared and NOLs could be

subject to limitation under Section 382.

NOTE 15 - SEGMENTS

The Company applies ASC 280, Segment Reporting ,

in determining its reportable segments.

The Company has two reportable segments during 2021:

Cryptocurrency Mining and Fintech Services.

The guidance requires that segment disclosures present the measure(s) used by the Chief Operating Decision Maker (“CODM”)

to decide how to allocate resources and for purposes of assessing such segments’ performance.

The Company’s CODM is comprised

of several members of its executive management team who use revenue and expenses of our two reporting segments to assess the performance

of the business of our reportable operating segments.

The following tables details revenue, operating

expenses, and assets for the Company’s reportable segments for the year ended December 31, 2021.

For the Year ended

Reportable segment revenue:

Revenue, net - cryptocurrency mining

Fintech services revenue

Total segment and consolidated revenue

Reconciling Items:

Processing and servicing costs, excluding merchant portfolio amortization

( 13,480,212 )

Amortization and depreciation expense

( 1,255,674 )

Depreciation expense - cryptocurrency mining

Salaries and wages

( 2,126,451 )

Professional fees

( 1,590,520 )

General and administrative expenses

( 2,387,416 )

Interest expense

Gain on forgiveness of debt

Litigation expense

$ ( 4,978,358 )

Total Assets:

Cryptocurrency mining

Fintech services

NOTE 16 – SUBSEQUENT EVENTS

On January 3, 2022, the Company entered into a

share exchange agreement with 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

“CI Issued Shares”).

The value of the CI Issued Shares was, for purposes of the Agreement, based on the closing trading price

of the Company on October 1, 2021 (the date on which a third-party fairness opinion was issued), resulting in an aggregate purchase price

for Crowd Ignition of $ 5.3 million.

On January 11, 2022, the Company entered into

a new employment agreement with Mr.

Yakov (the “Yakov Agreement”) and a new employment agreement with Mr.

Smith (the “Smith

The Yakov Agreement maintains Mr.

Yakov’s role as the Company’s Chief Executive Officer through December

31, 2027 and extended for one-year terms thereafter.

The Smith Agreement maintains Mr.

Smith’s role as the Company’s Vice

President, Finance unless terminated or upon his resignation.

The Yakov Agreement increases Mr.

base salary to $ 750,000 and he will continue to be eligible for insurance coverages and benefits available to the Company’s employees

pursuant to the terms of such plans.

Yakov also received a $ 490,000 bonus for acquisitions closed by the Company in 2020 and 2021

and he will be eligible to receive an acquisition bonus equal to two percent ( 2 %) of the gross purchase price paid in connection with

a future acquisition.

Yakov shall be eligible to receive an annual bonus of Three Hundred Thousand Dollars ($ 300,000 ) based on performance

criteria established by the Board.

In addition, on an annual basis, Mr.

Yakov shall receive options to purchase up to 200,000 shares of

common stock of the Company at an exercise price of $ 0.001 per share.

The Yakov Agreement also states that, if Mr.

employment is terminated without cause or he voluntarily terminates his employment for good reason, he will continue to receive his base

salary for the remainder of the term along with all earned bonuses.

In the event the termination is in connection with Mr.

death, disability or bankruptcy of the Company, he will receive the pro rata amount of his base salary through the termination date and

all bonuses earned through the termination date.

The Smith Agreement increases Mr.

base salary to $ 350,000.00 and he will continue to be eligible for insurance coverages and benefits available to the Company’s employees

pursuant to the terms of such plans.

Smith shall be eligible to receive an annual bonus of One Hundred Fifty Thousand Dollars ($ 150,000 )

based on performance criteria established by the Committee.

In addition, Mr.

Smith shall receive options (the “Options”) to

purchase up to 275,000 shares of common stock of the Company at an exercise price of $ 0.001 per share.

The Options vest equally over five

years at the rate of one-fifth (1/5 th ) beginning on the anniversary of the Effective Date of the Agreement.

The Smith Agreement also states that, if Mr.

employment is terminated without cause or he voluntarily terminates his employment for good reason, he will continue to receive his base

salary for the remainder of the term along with all earned bonuses.

In the event the termination is in connection with Mr.

death, disability or bankruptcy of the Company, he will receive the pro rata amount of his base salary through the termination date and

all bonuses earned through the termination date.

In January 2022, Armistice Capital, received 1,400,000

shares of common stock upon the exercise of 1,400,000 warrants at $ 0.0001 .

Changes in and Disagreements with

Accountants on Accounting and Financial Disclosure

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-K

Item 8. Financial Statements and Supplementary Data