What changed in this filing

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Item 1. Financial Statements

2022-05-16 compared with 2021-11-12 · 514 added, 579 removed, 124 unchanged (90% of the section changed)

Financial Statements

INDEX TO FINANCIAL STATEMENTS

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

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

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

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

TO FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021

Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021 (unaudited)

Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2022, and 2021 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 (unaudited)

Notes to the Condensed Consolidated Financial Statements (unaudited)

The OLB Group, Inc.

OLB Group, Inc.

and Subsidiaries

Condensed Consolidated

Balance Sheets

September 30,

Consolidated Balance Sheets

Current Assets:

6 unchanged sentences

Intangible assets, net

Operating lease right-of-use assets, net

Operating lease right-of-use assets

Other long-term assets

Total Other Assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

2 unchanged sentences

Accrued expenses

Merchant portfolio purchase installment obligation

Operating lease liability – current portion

7 unchanged sentences

Stockholders’ Equity:

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

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

Common stock, $ 0.0001 par value;

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

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 shares issued and outstanding at March 31, 2022 and December 31, 2021

Common stock, $ 0.0001 par value, 200,000,000 shares authorized, 14,702,804 and 11,984,396 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

Additional paid-in capital

4 unchanged sentences

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

T he accompanying notes are an integral

part of these unaudited condensed consolidated financial statements.

The OLB Group, Inc.

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

OLB Group, Inc.

and Subsidiaries

Condensed Consolidated Statements of Operations

For the Three Months

September 30,

For the Nine Months

September 30,

Consolidated Statements of Operations

For the Three

Transaction and processing fees

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

Depreciation expense - cryptocurrency mining

Salaries and wages

Professional fees

General and administrative expenses

4 unchanged sentences

Interest expense

Interest expense, related party

Total other income (expense)

1 unchanged sentence

$ ( 1,099,857 )

$ ( 2,666,347 )

$ ( 1,709,974 )

Net loss per share, basic and diluted

Weighted average shares outstanding, basic and diluted

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements.

The OLB Group, Inc.

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

OLB Group, Inc.

and Subsidiaries

Condensed Consolidated Statements of Stockholders’

For the Three and Nine Months ended September

30, 2021 and 2020

Preferred Stock

Consolidated Statements of Stockholders’ Equity

the Three Months ended March 31, 2022 and 2021

Balance at January 1, 2022

1 unchanged sentence

Stock based compensation

Common stock issued for the exercise of warrants

Common stock issued for common control acquisitions

Common stock issued for exercise of warrants

( 1,455,596 )

2 unchanged sentences

$ ( 27,062,560 )

Common stock issued for the exercise of options – related party

Stock based compensation

Balance at June 30, 2021

$ ( 22,394,599 )

Common stock and warrants sold for cash

Warrants converted to common stock

Stock based compensation

Options issued for intangible assets

Balance at September 30, 2021

$ ( 23,294,953

Preferred Stock

Balance at January 1, 2021

$ ( 20,628,606 )

$ ( 2,800,400 )

Stock based compensation

Balance at March 31, 2020

( 19,394,086 )

( 3,268,011 )

Stock based compensation

Balance at June 30, 2020

Common stock issued for

the exercise of Warrants

( 1,099,857 )

Stock based compensation

Conversion of debt – related party

Common stock units sold for cash

Warrants sold for cash

Warrants converted to common stock

Common stock issued to directors

Warrants issued for services

Balance at September 30, 2020

Balance at March 31,

$ ( 21,728,463 )

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements.

The OLB Group, Inc.

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

OLB Group, Inc.

and Subsidiaries

Condensed Consolidated Statements of Cash Flows

For the Nine Months

September 30,

Consolidated Statements of Cash Flows

For the Three

CASH FLOWS FROM OPERATING ACTIVITIES:

4 unchanged sentences

Stock based compensation

Common stock issued for services – related party

Operating lease expense

Changes in assets and liabilities:

Accounts receivable, net

Accounts receivable

Prepaid expenses and other current assets

2 unchanged sentences

Accrued expenses – related party

Accrued expenses

Deferred revenue

Other accrued liabilities

Net cash used in operating activities

( 1,602,406 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of intangible assets

Purchase of property and equipment

( 6,003,300 )

Net Cash used in Investing Activities

( 6,068,300 )

CASH FLOWS FROM FINANCING ACTIVITIES:

2 unchanged sentences

( 7,654,845 )

( 1,370,155 )

Proceeds from exercise of warrants

Net proceeds from sale of common stock and warrants

Proceeds from sale of warrants

Payment of offering costs

Net Cash (used in) provided by Financing Activities

Net cash provided by financing activities

Net change in cash

3 unchanged sentences

Cash paid for:

Supplemental Non-Cash Disclosure:

Establish operating lease asset and related liability

Stock options issued for intangible asset

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements.

The OLB Group, Inc.

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

OLB Group, Inc.

and Subsidiaries

Notes to the Condensed Consolidated Financial

September 30, 2021

NOTE 1 – BACKGROUND

The OLB Group, Inc.

(“OLB” the “Company”)

was incorporated in the State of Delaware on November 18, 2004 and provides services through its wholly-owned subsidiaries.

The Company provides integrated financial and

transaction processing services to businesses throughout the United States.

to the Consolidated Financial Statements

1 – BACKGROUND

OLB Group, Inc.

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

services through its wholly-owned subsidiaries and business segments.

Company provides integrated financial and transaction processing services (“Fintech Services”) to businesses throughout the

United States.

Through its eVance Capital, Inc.

subsidiary (“eVance”),

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

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

in physical “brick and mortar” business environments, on the internet and in retail settings requiring both wired and wireless

mobile payment solutions.

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

contracts in exchange for future residual payments.

As a wholesale ISO, eVance has a direct contractual relationship with the merchants

and takes greater responsibility in the approval and monitoring of merchants than do retail ISOs and as a result, receives additional

consideration for this service and risk.

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

As a wholesale ISO, eVance has a direct contractual relationship with the merchants and takes greater responsibility in the

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

The Company’s Securus365, Inc.

subsidiary operates as a retail ISO and receives residual

income as commission for merchants it places with third party processors.

CrowdPay.us, Inc.

(“CrowdPay”) is

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

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

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.

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

a wholly owned subsidiary (“DMINT”).

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

On July 28, 2021, the Company entered into an

exclusive agreement with Cai Energy Blockchain, Inc.

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

supply agreement (the “Services”).

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

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

of $ 0.0001 per share.

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

The Company also provides ecommerce development

and consulting services on a project-by-project basis.

COVID-19 Impact

On January 30, 2020, the World Health Organization

declared the COVID-19 (coronavirus) outbreak a “Public Health Emergency of International Concern” and on March 10, 2020, declared

it to be a pandemic.

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

impact on the economies and financial markets of many countries, including the geographical areas in which the Company operates.

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

it has been focusing on servicing merchants that sell products with an extended delivery time frame, that have products that are paid

for in advance, and that work in the catering, ticketing, limo and travel related businesses which have been directly impacted by the

social distancing requirement of the pandemic.

Further, for those of the Company’s employees that are able to perform their job

remotely, the Company implemented a “remote work” policy and provided employees with the technology necessary to continue

to do their jobs from home and for those employees that are unable to perform their job from a remote location, the Company has taken

steps to ensure appropriate distancing, continue to require wearing masks in the office and added sanitizing stations along with requiring

frequent hand washing and work station cleaning.

In addition, the Company has been encouraging its employees to get vaccinated, if possible.

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

However, the Company continues to

monitor and follow the advice of federal and state authorities.

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

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

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING

Basis of Presentation

The Company’s consolidated financial statements

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

Use of Estimates

The preparation of financial statements in conformity

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

of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during

the reporting period.

(“Securus365”) 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 $ 1,000,000 -$ 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”) 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.

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

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 Business”).

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 is being used in connection with the Company’s,

newly launched, cryptocurrency mining business.

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

Company generates its revenue through two business segments its Fintech Services and Cryptocurrency Business segments.

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

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

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

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

areas in which the Company operates.

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

to the purchase patterns of consumers.

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

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

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

Further, for those of the Company’s employees

that are able to perform their job remotely, the Company implemented a “remote work” policy and provided employees with the

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

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

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

In addition, the Company has been encouraging its employees

to get vaccinated, if possible.

At March 31, 2022, most employees were no longer working remotely and had returned to the office.

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

The Company has not seen a material impact on

its business since states began to roll back restrictions on businesses in the United States.

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation

Company’s unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting

principles in the United States of America (“U.S.

GAAP”), and pursuant to the rules and regulations of the Securities and

Exchange Commission (the “SEC”) and reflect all adjustments, consisting of normal recurring adjustments, which management

believes are necessary to fairly present the financial position, results of operations and cash flows of the Company as of and for the

three month period ending March 31, 2022 and not necessarily indicative of the results to be expected for the full year ending December

These unaudited financial statements should be read in conjunction with the financial statements and related notes included

in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the

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

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

Actual results could differ from those estimates.

The Company’s accounting estimates include the collectability

of receivables, useful lives of long-lived assets and recoverability of those assets, impairment in fair value of goodwill, valuation

allowances for income taxes, stock-based compensation.

Principles of Consolidation

The accompanying consolidated financial statements

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

OLBit and DMINT.

All significant

intercompany transactions and balances have been eliminated.

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

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

of Consolidation

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

Securus, CrowdPay, Omnisoft, OLBit, DMINT and Crowd Ignition, Inc.

All significant intercompany transactions and balances have been eliminated.

Reclassifications

Certain reclassifications have been made to the

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

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

Net Loss per Share

Basic net loss per share of common stock is computed

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

Diluted net loss per common

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

of common stock during the period.

The weighted average number of common shares for the three and nine months ended September 30, 2021

and 2020 does not include warrants to acquire up to 3,778,533 and 3,353,698 shares of common stock, respectively, because

of their anti-dilutive effect.

The weighted average number of common shares for the three and nine months ended September 30, 2021 and

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

Accounts Receivable

Accounts receivable represent contractual residual

payments due from the Company’s processing partners or other customers.

Residual payments are determined based on transaction fees

and revenues from the credit and debit card processing activity of merchants for which the Company’s processing partners pay the

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

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

however, CrowdPay has

a recorded an allowance of approximately $ 38,000 as of both September 30, 2021 and December 31, 2020.

Reserve for Chargeback Losses

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 Three Months

September 30,

For the Nine Months

September 30,

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

for the three months ended March 31, 2022.

Concentration

of Credit Risk

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

Company’s cash is deposited with major financial institutions.

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

Insurance Corporation insurable amount (“FDIC”).

As of March 31, 2022, the Company had $ 2,831,494 of cash in excess

of the FDIC’s $ 250,000 insurance limit.

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 March 31, 2022.

See Note 13, “Segment Information”.

Loss per Share

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 March 31, 2022 and 2021 does not include warrants to acquire 8,563,127 and 2,368,978 shares of common stock, respectively,

because of their anti-dilutive effect.

The weighted average number of common shares for the three months ended March 31, 2022 and 2021

does not include 779,029 and 11,112 options, respectively, to purchase common stock because of their anti-dilutive effect.

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

Residual payments

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

processing partners pay the Company.

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

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

however, CrowdPay has a recorded an allowance of approximately $ 0 and $ 38,000 as of March 31, 2022 and December 31, 2021, 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.

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:

the Three Months Ended

Revenue from contracts with customers:

2 unchanged sentences

Other transaction and processing fees

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.

NOTE 3 – LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2021, the Company had cash of

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

As such, the Company believes it has sufficient liquidity

to fund its future operations and capital requirements for a period of at least twelve months from the date these condensed consolidated

financial statements are issued.

NOTE 4 – INTANGIBLE ASSETS

Intangible assets, net, consist of the following

September 30,

Cryptocurrency mining

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

The Company determines

revenue recognition through the following steps:

Identification of a contract

with a customer;

Identification of the performance

obligations in the contract;

Determination of the transaction

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.

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.

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

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

The Company will recognize revenue

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

best measure of the transfer of control.

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

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

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

risk of chargebacks and other merchant losses.

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

criteria established by the Company.

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

related interchange and other processing fees within cost of revenues.

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

relationship with the merchant.

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

interchange and other processing fees, as revenue.

equipment sales and other

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

The Company satisfies its performance obligation upon delivery

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

The Company allows for customer returns which are accounted for

as variable consideration.

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

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

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

The Company allocates a portion

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

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

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

Pursuant to practical expedients afforded under ASC 606,

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

Cryptocurrency

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.

The 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.

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.

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.

3 – LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2022, the Company had cash of approximately

$ 3.6 million and working capital of approximately $ 2.8 million.

As such, the Company believes it has sufficient liquidity to fund

its future operations and capital requirements for a period of at least twelve months from the date these consolidated financial statements

4 – INTANGIBLE ASSETS

assets, net, consist of the following as of:

Merchant Portfolios

3 unchanged sentences

Net residual portfolios

September 30,

Less accumulated amortization

2 unchanged sentences

Net trade name

Total intangible assets, net

September 30,

Mineral rights for natural gas

CBD Merchant Portfolio

Less accumulated amortization

Net CBD merchant portfolio

Exclusive agreement to purchase

Less accumulated amortization

Net mineral rights

Total intangible assets, net

Total intangible assets,

Amortization expense for the three months ended

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

Amortization expense for the nine months ended

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

The Company’s merchant portfolios and tradename

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

The following sets forth the estimated amortization

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

2021 (three months)

The weighted average remaining useful life of

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

NOTE 5 – 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.

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

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

The loan has been accounted for as long-term debt, which, if forgiven

will result in a gain on forgiveness of debt in the period forgiveness is obtained.

The bank that funded the loan has not yet started

the process to have the loan forgiven.

NOTE 6 – 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 $0.001per share and expire in three years after each vest date.

The aggregate fair value of the options

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

exercise price of $ 0.001 , 0.16 %

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

The fair value is being amortized over the

applicable vesting period and credited to additional paid in capital.

On July 28, 2021, the Company entered into an

exclusive agreement with Cai Energy Blockchain, Inc.

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

supply agreement (the “Services”).

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

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

of $ 0.0001 per share.

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

using the following estimates:

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

A summary of the status of the Company’s

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

March 31, 2022 and 2021 was $ 995,069 and $ 215,904 , respectively.

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

Company’s agreement to purchase natural gas is being amortized over the useful life of 10 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 5.95 years at March 31, 2022.

5 – PROPERTY AND EQUIPMENT

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

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.

and repair expenses, as incurred, are charged to expense.

Betterments and renewals are capitalized in plant and equipment accounts.

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 following:

Furniture and Fixtures

Office Equipment

Computer Software

Leasehold Improvements

Cryptocurrency Mining Equipment

Less accumulated depreciation

( 2,054,929 )

( 1,154,470 )

Property and Equipment, net

Depreciation expense for the three months ended

March 31, 2022 and 2021 was $ 895,277 and $ 3,521 , respectively.

6 – NOTE PAYABLE

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

was $ 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

recognized a liability for the contingent payment amount.

On November 29, 2021, the Company entered into a Master Equipment Finance

Agreement (the “MFA”) with VFS LLC (“VFS”) which would allow the Company to finance the purchase of certain equipment.

The collateral and interest rate are determined at the time the Company borrows funds.

During the three months ended March 31, 2022, the

Company received, as an initial draw on the MFA, $875,000 from VFS (the “Equipment Loan”).

The Equipment Loan is secured by

cryptocurrency mining computers being utilized by DMINT.

The Equipment Loan requires monthly payments of $24,837.75 until the loan is

repaid in full or it matures on November 29, 2024 requiring a full payment of all principal and accrued and unpaid interest.

7 – STOCK OPTIONS

Weighted Average

Options outstanding at January 1, 2020

summary of the status of the Company’s outstanding stock options and changes during the three months ended March 31, 2022 is presented

Stock Options

Options outstanding December 31, 2020

Options outstanding September 30, 2021

Shares exercisable at September 30, 2021

NOTE 7 – 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 anticipates using the remainder of the net proceeds from the Offering to invest in or acquire companies

or technologies that are synergistic with or complimentary to our business, expand and market our current products and for working capital

and other general corporate purposes (including payment of outstanding accounts payable).

The Warrants were issued in registered form under

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

Outstanding, December 31, 2018

Outstanding, December 31, 2019

Warrant A Granted (1)

Warrant B Granted (2)

Warrant B Exercised

Underwriter Warrant

Underwriter Warrant Exercised

Options outstanding December 31, 2021

Options outstanding March 31, 2022

Shares exercisable at March 31, 2022

summary of the status of the Company’s outstanding stock warrants and changes during the three months ended March 31, 2022 is presented

Outstanding, December 31, 2020

2 unchanged sentences

Warrant B Exercised

Outstanding, September 30, 2021

(1) Includes 210,000 Warrant

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

(2) Includes 525,000 Warrant

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

NOTE 8 – OPERATING LEASE

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.

Balance Sheet Classification

September 30,

Operating lease asset

Right of use asset

Underwriter Warrant

( 1,176,364 )

Outstanding, December 31, 2021

Underwriter Warrant

( 1,400,000 )

Outstanding, March 31, 2022

9 – OPERATING LEASES

June 24, 2020, eVance, Inc.

(“eVance”) 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 to $8,768.

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

$8,768 is payable as a security deposit.

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

portion of the Lease.

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 per month.

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

Sheet Classification

Total lease asset

1 unchanged sentence

Current operating lease liability

Operating lease liability – noncurrent portion

Long-term operating lease liability

Operating lease liability

– noncurrent portion

Long-term operating

lease liability

Total lease liability

Lease obligations at September 30, 2021 consisted

of the following:

For the year ended December 31:

2021 – three months

obligations at March 31, 2022 consisted of the following:

the year ended December 31:

Total payments

Amount representing interest

Amount representing

Lease obligation, net

Less current portion

Lease obligation – long term

Rent expense for the three months ended September

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

Rent expense for the nine months ended September

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

At September 30, 2021, the weighted average remaining

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

NOTE 9 – 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 $1,000.00 per share.

Holders of Series A Preferred Stock are entitled to the following

rights and preferences:

The Series A Preferred Stockholders are entitled

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

Dividends accrue

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.

Lease obligation –

expense for the three months ended March 31, 2022 and 2021, was $ 42,409 and $ 24,909 , respectively.

10 - COMMON STOCK

January 2022, Armistice Capital, received 1,400,000 shares of common stock upon the exercise of 1,400,000 warrants at $0.0001.

11 – 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.

4,633 shares of preferred stock are currently issued

and 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 per share.

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.

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.

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

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

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

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

holders of common stock have the right to vote.

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

Liquidation Preference

Each share of Series A Preferred Stock will have

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

In the event of a liquidation, dissolution

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

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

Stock shall be entitled to receive out of the assets of the Company, before any payment is made to the holders of the Company’s

common stock and either in preference to or pari pasu with the holders of any other series of preferred stock that may

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

NOTE 10 – 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).

NOTE 11 – SUBSEQUENT EVENTS

On October 25, 2021, the Board of Directors of

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

shareholders of Crowd Ignition, Inc.

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

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

The value of the Shares

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

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

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

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

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

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

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

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

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

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

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

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

Subject to certain ownership limitations,

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

initial registration statement filed with respect to the Common Shares.

The Prefunded Warrants are immediately exercisable upon issuance

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

The Company received notice on October 11, 2021

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

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 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.

12 – RELATED PARTY TRANSACTIONS

January 3, 2022, the Company entered into a share exchange agreement with all of the shareholders of Crowd Ignition, Inc.

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.

The purchase price was used solely to establish

the price between the parties and not for accounting purposes.

Ignition is a web-based crowdfunding software system.

Ronny Yakov, Chairman and CEO of the Company and John Herzog, a significant shareholder

of the Company, collectively owned 100 % of the equity of Crowd Ignition.

The acquisition of Crowd Ignition., was determined to be a common

control transaction as each Company has the same two shareholders with a majority ownership.

As a result, the assets and liabilities

assumed were recorded on the Company’s condensed consolidated financial statements at their respective carry-over basis;

as of January 3, 2022, Crowd Ignition has no assets, liabilities or other operations.

13 – COMMITMENTS AND CONTINGENCIES

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

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

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 Agreement”).

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.

role as the Company’s Vice President, Finance unless terminated or upon his resignation.

The Yakov Agreement increases Mr.

Yakov’s 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 Company’s existing option plan will need to be amended to increase the number

of available shares before the options to Mr.

Yakov can be granted.

Yakov Agreement also states that, if Mr.

Yakov’s 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.

the termination is in connection with Mr.

Yakov’s 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.

Smith’s 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 Company’s existing option

plan will need to be amended to increase the number of available shares before the options to Mr.

Smith can be granted.

Smith Agreement also states that, if Mr.

Smith’s 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.

the termination is in connection with Mr.

Smith’s 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.

Company had an adverse litigation judgment against it during the fiscal year which included damages and attorney fees in favor of the

The Company has appealed the judgment of both the award of damages and attorney fees.

The timeline for a ruling on the appeal

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.

14 - SEGMENTS

Company applies ASC 280, Segment Reporting , in determining its reportable segments.

The Company has two reportable segments

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’

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.

following tables details revenue, operating expenses, and assets for the Company’s reportable segments for the three months ended

March 31, 2022.

For the Three

Reportable segment revenue:

Revenue, net - cryptocurrency mining

Fintech services revenue

Total segment and consolidated revenue

Total Assets:

Cryptocurrency

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements