What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-03-30 compared with 2022-03-28 · 585 added, 487 removed, 617 unchanged (63% of the section changed)

Financial Statements and Supplementary

Financial Statements and Supplementary Data

INDEX TO FINANCIAL STATEMENTS

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Notes to the Consolidated Financial Statements F-7

Report of Independent Registered Public Accounting

Report of Independent Registered Public

Accounting Firm

To the Board of Directors and Stockholders

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in the United States of America.

Emphasis of Matter

As discussed in Note 2, the accompanying consolidated

financial statements at and for the year ended December 31, 2021 have been revised.

Basis for Opinion

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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

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;

Intangible Assets

Impairment Assessments

As described in Notes

2 and 4 to the consolidated financial statements, the Company has goodwill and intangible assets of $27.2 million at December 31, 2022.

In most 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 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.

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;

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

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.

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

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market and industry data, and whether these assumptions were consistent with evidence obtained in other areas of the audit.

/s/ Daszkal Bolton LLP

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

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Balance Sheets

2021 (Revised)

Current Assets:

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Accrued expenses

Preferred dividend payable (related parties)

Merchant portfolio purchase installment obligation

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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 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

Preferred stock, $ 0.0001 par value, 1,000,000 shares authorized

Series A Preferred stock, $ 0.0001 par value, 10,000 shares authorized, 1,021 and 4,633 shares issued and outstanding at December 31, 2022 and 2021, respectively

Common stock, $ 0.0001 par value, 50,000,000 shares authorized, 15,207,714 and 11,984,396 shares issued, 15,081,542 and 11,984,396 shares outstanding at December 31, 2022 and 2021, respectively

Treasury stock, at cost ( 126,272 shares)

Additional paid-in capital

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Amortization and depreciation expense

Depreciation expense - cryptocurrency mining

Salaries and wages

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( 8,170,459 )

( 4,764,739 )

Other income (expense):

Interest expense

Interest expense, related party

Gain on forgiveness of debt

Litigation expense

Total other expense

Total other income (expense)

$ ( 7,787,269 )

$ ( 4,978,358 )

Preferred dividends (related parties)

Net loss to common shareholders

( 8,189,172 )

$ ( 5,534,318 )

Net loss per share, basic and diluted

Weighted average shares outstanding, basic and diluted

The accompanying notes are an integral part

of these consolidated financial statements.

The accompanying notes

are an integral part of these consolidated financial statements.

The OLB Group, Inc.

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ended December 31, 2022 and 2021

Preferred Stock

Common Stock to

Balance at December 31, 2020

$ ( 20,628,606 )

$ ( 2,800,400 )

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 for exercise of Warrants

Common stock issued for services – related party

Common stock issued for director

Common stock issued for exercise

Preferred stock dividends (related

( 4,978,358 )

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Stock based compensation

Common stock issued exercise of warrants – related party

Options issued for intangible assets

Common stock units issued for cash

Common stock issued for director service

Common stock issued for exercise of warrants

Common stock issued for common control

Common stock issued for exercise

Repurchase of shares

Conversion of preferred shares –

related party

Preferred stock dividends (related

( 7,787,269 )

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$ ( 110,000 )

$ ( 33,394,233 )

The accompanying notes are an integral part

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$ ( 4,978,358 )

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

Adjustments to reconcile net loss to net cash used in operations:

Non-cash mining revenue

Depreciation and amortization

Stock based compensation

Common stock issued for services – related party

Common stock to be issued for services to Directors

Operating lease expense

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Accounts payable

Accrued expenses – related party

Other accrued liabilities

Deferred revenue

Net cash provided by (used in) operating activities

Net cash (used in) operating activities

( 1,921,381 )

( 3,508,082 )

CASH FLOWS FROM INVESTING ACTIVITIES:

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( 1,562,361 )

( 9,596,599 )

Acquisition of intangible assets

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( 1,562,361 )

( 25,661,600 )

CASH FLOWS FROM FINANCING ACTIVITIES:

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( 7,654,845 )

( 1,845,155 )

Proceeds from exercise of warrants

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Proceeds from exercise of options – related party

Proceeds from sale of warrants

Payment of deferred offering costs

Cash used for acquisition of treasury stock

Net cash provided by financing activities

Net change in cash

( 3,036,313 )

Cash – beginning of year

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Establishment of ROU operating lease asset and related liability

Conversion of debt – related party

Merchant portfolio purchase installment obligation

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

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

Fintech Services:

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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

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

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

To date, the activities of this subsidiary have

been nominal.

To date, the activities of this subsidiary

have been nominal.

OmniSoft.io, Inc.

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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:

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

related to its emerging lending and transactional business leveraging the Company’s Cryptocurrency Business and Fintech Services

The Company also provides ecommerce development

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

Cryptocurrency Mining 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

The purpose of DMINT is to operate its business related to Bitcoin mining (“Cryptocurrency

On July 28, 2021, the Company entered into an

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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.

of $ 0.0001 per share (the “CAI Options”).

The natural gas was being used in connection with the Cryptocurrency Business

prior to opening the Selmer, Tennessee location.

On November 22, 2022, Mr.

Ronny Yakov purchased

the CAI Options, in a privately negotiated transaction, for $ 700,000 using his personal funds.

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

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

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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.

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

However, the Company continues to

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intercompany transactions and balances have been eliminated.

Correction of Immaterial Error

Subsequent to the initial issuance of the Company’s

2021 financial statements on March 28, 2022, management discovered it did not record the accrual for dividends on its Series A Preferred

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.

In accordance with Staff Accounting Bulletin (“SAB”)

99, “Materiality,” and SAB No.

108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements

in Current Year Financial Statements,” the Company evaluated the error and determined that the related impact did not materially

misstate previously issued consolidated financial statements.

Although the Company concluded that the misstatement was not

material to its previously issued consolidated financial statements, the Company has determined it is appropriate to adjust its previously

issued consolidated financial statements to correct for the error in the context of comparative financial statements.

The following

are the relevant line items from the Company’s consolidated financial statements which illustrate the effect of the corrections

to the periods presented:

Balance sheet:

As Previously

December 31, 2021

Preferred dividend payable

Total liabilities

Additional paid-in capital

( 25,605,721 )

Total stockholders’ equity

$ ( 824,674 )

Statement of operations

As Previously

Year ended December 31, 2021

$ ( 4,978,358 )

Preferred stock dividends

Net loss allocable to common shareholders

( 4,978,358 )

( 5,534,318 )

Loss per share

Weighted average common shares outstanding

Reclassifications

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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.

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

As of December 31, 2022, the Company had no 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”),

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.

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

The Company has two operating segments as of

December 31, 2021.

The Company has two operating segments as

of December 31, 2022 and 2021.

See Note 15, “Segment Information”.

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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.

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.

However, 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

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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.

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 years ended December 31, 2022 and 2021

does not include warrants to acquire 8,563,127 and 9,963,127 shares of common stock, respectively, because of their anti-dilutive effect.

The weighted average number of common shares for the year ended December 31, 2022 and 2021 does not include 2,362,321 and 772,362 options,

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

Property and Equipment

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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.

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.

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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.

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

If cash flows cannot be separately and independently

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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).

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

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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

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

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

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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.

however, CrowdPay

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

Disputes between a cardholder and a merchant

periodically arise as a result of, among other things, cardholder dissatisfaction with merchandise quality or merchant services.

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

Other Current Assets

Other current assets comprised of the following:

Cryptocurrency at cost

Investment in cryptocurrency-based fund

Other current assets

Revenue Recognition and Cost of Revenues

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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.

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

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revenue disaggregated by revenue source:

For the Years

For the Years Ended

Revenue from contracts with customers:

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Other transaction and processing fees

Cryptocurrency mining 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

The 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;

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Determination of the transaction price;

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

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.

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

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.

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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.

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 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.

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

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.

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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.

Company records the net amount it receives from the processor, after interchange and other interchange and other processing fees, as

Merchant equipment sales and other

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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

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.

Bitcoin Mining

The Company has entered into digital asset mining

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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.

fractional share of the fixed Bitcoin 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 Bitcoin 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.

Providing computing power to solve complex cryptographic

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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.

Impairment of cryptocurrency assets is tested

annual or more frequently if events or circumstances change.

At December 31, 2022, the Company had 31.06 Bitcoin and the fair value

of the Company’s digital assets was $ 515,710 based on the price of Bitcoin being $ 16,603.67 .

On March 23, 2023, the Financial Accounting Standards Board issued

an Exposure Draft “Intangibles – Goodwill and Other – Crypto Assets” (Subtopic 350-60), Accounting for and Disclosure

of Crypto Assets.

Under the provisions of this Exposure Draft, an entity would be required to present crypto assets separately from other

intangible assets in the balance sheet, and measure crypto assets at fair value with changes recognized in net income each reporting period.

Upon effectiveness, an entity would reflect a cumulative-effect adjustment to the opening balance of retained earnings.

Issuance of the

final Standard is subject to public comment and deliberations.

Adoption of this Exposure Draft in its current form would result in a charge

to retained earnings in the amount of approximately $ 514,500 .

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.

The Company’s consolidated financial

statements have been prepared in accordance with US GAAP, which assumes that the Company’s management will evaluate whether it

will be able to meet its obligations and continue its operations in the normal course of business.

At December 31, 2022, the Company

had cash of approximately $ 434,000 , accounts receivable of approximately $ 1,083,000 and bitcoin at cost of $ 1,030,000 (with the fair value of approximately $ 515,710 based on the price of

Bitcoin being $ 16,603.67 at December 31, 2022), and accounts

payable and accrued expenses of approximately $ 1,020,000 .

To date the Company has generated cash flows from issuances of equity and

indebtedness.

Management believes that its current

available resources will be sufficient to fund the Company’s planned expenditures over the next 12 months.

However, management

recognizes that it may be required to obtain additional resources via issuances of indebtedness or equity to successfully execute

its business plans.

No assurances can be given that management will be successful in raising additional capital, if needed, or on

acceptable terms.

These financial statements do not include any adjustments relating to the recoverability and classification of

recorded asset amounts and classification of liabilities that might be necessary should the Company determine it shall be unable to

continue as a going concern.

NOTE 4 – INTANGIBLE ASSETS

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Net trade name

CBD Merchant Portfolio

Acquired Merchant Portfolio

Less accumulated amortization

( 2,476,191 )

Net trade name

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31, 2022 and 2022 was $ 3,664,488 and $ 1,241,589 , respectively.

The Company’s merchant portfolios

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

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

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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.

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.

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

Property and equipment are first recorded at cost.

Property and equipment are first recorded at

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

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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

Assets stated at cost, less accumulated depreciation consisted of

the following:

Furniture and Fixtures

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Leasehold Improvements

Cryptocurrency Mining Equipment

Bitcoin Mining Equipment

Plant and Machinery

Less accumulated depreciation

( 4,363,897 )

( 1,154,470 )

Property and Equipment, net

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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.

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

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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

we acquired a portfolio of merchants utilizing financial

transaction processing services (the “Acquired Merchant Portfolio”).

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.

However, on July 18, 2022, the Company notified the Seller of certain breaches of contract relating to, among other things,

representations made by Seller in the Agreement, for which it will seek a reduction or cancellation of the final payment and a potential

reduction in the overall purchase price.

The Company has filed a claim for breach of contract against Seller and Seller has filed a breach

of contract counterclaim against the Company.

The matter is currently in the early stages and no date for an arbitration or court hearing

has been scheduled.

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 the funds.

the year ended December 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 Bitcoin 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

NOTE 7 – STOCK OPTIONS

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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.

risk free rate, 135.03 % volatility (expected volatility based on weighted-average historical volatility of the Company on the grant

date) 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

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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

of $ 0.0001 per share (the “CAI Options”).

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

(expected volatility based on weighted-average historical volatility of the Company on the grant date) and expected life of the options

On November 22, 2022, Mr.

Ronny Yakov purchased the CAI Options, in a privately negotiated transaction, for $ 700,000

using his personal funds.

In January 2022, the Company entered into new

employment contracts with Mr.

Yakov (CEO) and Mr.

Smith (Vice President, Finance).

Pursuant to the terms on the employment agreements

they were entitled to stock options to purchase shares of common stock ( 200,000 – Mr.

Yakov (similar amount granted annually

during employment contract) and 275,000 – Mr.

Smith (granted only in 2022)).

The options had an exercise price of $ 0.001 per share.

Options of Mr.Yakov vested during the year, and options of Mr.

Smith vested equally over five years.

However, as per 2020 Equity Incentive

Plan then in force, only 178,162 stock options remained authorized for issue on that date.

Therefore only 178,162 stock options were considered

granted initially (the number has been allocated between Mr.

Yakov and Mr.

Smith pro rata).

The aggregate fair value of the options totaled

$ 368,627 based on the Black Scholes Merton pricing model using the following estimates:

exercise price of $ 0.001 , 1.325 % risk

free rate, 125.9 % volatility (expected volatility based on weighted-average historical volatility of the Company on the grant date)

and expected life of the options of 4 years.

On December 22, 2022 shareholders of the Company

have approved Amended and Restate Equity Incentive Plan, increasing the number of stock options Company is allowed to use in stock-based

compensation agreements with employees.

Simultaneously, the Company modified the stock

option agreements with Mr.

Yakov and Mr.

Smith as follows.

Out of stock options to purchase 200,000 shares

of common stock granted to Mr.

Yakov, 100,000 options immediately vested with an additional 50,000 vested on January 1, 2023, and

the remaining 50,000 vesting on January 1, 2024.

Yakov is entitled to a similar grant annually during his employment period.

have an exercise price of $ 0.01 per share.

The aggregate fair value of the options totaled $ 1,217,264 based on the Black Scholes

pricing model using the following estimates:

exercise price of $ 0.01 , risk free rates ranging from 3.9 % to 4.6 %, 118 % volatility

(expected volatility based on weighted-average historical volatility of the Company on the grant date) and expected life of the options

of ranging from 1 to 3 years.

Out of stock options to purchase 275,000 shares

of common stock granted to Mr.

Smith, 137,500 options immediately vested with an additional 68,750 vested on January 1, 2023, and

the remaining 68,750 vesting on January 1, 2024.

The options have an exercise price of $ 0.01 per share.

The aggregate fair value

of the options totaled $ 279,412 based on the Black Scholes pricing model using the the same estimates as stated above.

Modification of option contracts with 2 officers

of the Company in December 2022 resulted in total incremental compensation cost of $ 91,361 .

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:

outstanding stock options and changes during the year ended December 31, 2022 is presented below:

Stock Options

Weighted Average

Options outstanding at January 1, 2020

Options outstanding December 31, 2020

Options outstanding December 31, 2021

Shares exercisable at December 31, 2021

Options outstanding on December 31, 2020

Options outstanding on December 31, 2021

Options outstanding on December 31, 2022

Options exercisable on December 31, 2022

Weighted-average grant-date fair value of options

Those nonvested at the beginning of the 2022 year

Those nonvested at the end of the 2022 year

Those that during the 2022 year were:

Granted (last year - $ 5.9 )

Weighted-average remaining contractual term of

options outstanding as at December 31, 2022 is 7.8 years.

Weighted-average remaining contractual term of options exercisable as at December

31, 2022 is 8.1 years.

Total compensation cost related to nonvested awards

not yet recognized as of December 31, 2022 amounted to $ 1,335,923 .

The weighted-average period over which it is expected to be recognized

is 4.3 years.

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 August 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.

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

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Outstanding, December 31, 2020

Warrant A Granted (1)

Warrant B Granted (2)

Warrant B Exercised

Underwriter Warrant

Underwriter Warrant Exercised

Outstanding, December 31, 2020

Underwriter Warrants

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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

Underwriter Warrant Exercised

( 1,400,000 )

Outstanding, December 31, 2022

NOTE 9 – OPERATING LEASES

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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 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

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

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of approximately $22,918,000.

On January 2022, Armistice Capital, received

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

On July 12, 2022, the Board of the Company authorized

a share repurchase program, pursuant to which the Company may repurchase up to 1 million shares of its outstanding shares of common stock.

The Board authorized the Company to purchase its common stock from time to time on a discretionary basis through open market purchases,

privately negotiated transactions or other means, including trading plans intended to qualify under Rule 10b5-1 of the Exchange Act,

in accordance with applicable federal securities laws and other applicable legal requirements.

The Company expects to fund these repurchases

through existing cash balances.

Decisions regarding the amount and the timing of purchases under the program will be influenced by the

Company’s cash on hand, cash flows from operations, general market conditions and other factors.

The Company is not obligated to

acquire any particular amount of its common stock.

This program has no set termination date and may be suspended or discontinued by the

Board at any time.

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.

Our certificate of incorporation, as amended,

authorizes the issuance of 1,000,000 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.

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 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

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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.

at their option, on or after the date on which the certain 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 of $ 9 .

The holders of Series A Preferred Stock are permitted to convert their shares of Series A Preferred Stock into

shares of common stock at such time as the Term Loan has already 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.

has 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 has full voting rights and powers equal to the voting rights and powers of the holders of common stock, and is entitled,

to notice of any stockholders’ meeting in accordance with the Company’s bylaws, and is 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

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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 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

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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

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

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 purchased

100% of the equity of Crowd Ignition in exchange for 1,318,408 shares of the common stock, par value $0.0001 of the Company (the “CI

Issued Shares”).

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

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

Crowd Ignition of $ 5.3 million.

The purchase price was used solely to establish the agreed upon purchase price between the parties and

not for accounting purposes.

Crowd 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;

however, as of

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

On December 14, 2022,

Herzog converted 3,612 shares of Series A Preferred Stock together with $ 932,193 of accrued dividends into 504,910 shares of common

The Company is obliged to issue shares worth of

$ 165,000 to Directors for their service during the year ended December 31, 2022 – a provision for this compensation has been accrued

in the balance sheet as of December 31, 2022.

Refer to Note 7 for options to purchase shares

of common stock issued to the CEO and shareholder.

NOTE 13 – COMMITMENTS AND CONTINGENCIES

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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).

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.

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

20 unchanged sentences

At December 31, 2022,

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.

the Company had operating loss carry forwards of approximately $21,900,00, $3,200,000 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 applies ASC 280, Segment

Reporting , in determining its reportable segments.

The Company has two reportable segments during 2021:

Cryptocurrency Mining and Fintech Services.

Cryptocurrency Mining and

Fintech Services.

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

4 unchanged sentences

The following tables details revenue, operating

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

expenses, and assets for the Company’s reportable segments for the year ended December 31, 2022 and 2021.

For the Year ended

Reportable segment revenue:

2 unchanged sentences

Total segment and consolidated revenue

Reconciling Items:

Processing and servicing costs, excluding merchant portfolio amortization

( 13,480,212 )

Amortization and depreciation expense

Operating Expenses

Cryptocurrency mining

( 3,193,683 )

Depreciation expense - cryptocurrency mining

Salaries and wages

Fintech services

( 26,857,523 )

Professional fees

( 15,183,613 )

Segment profit

General and administrative expenses

( 8,715,769 )

Interest expense

Gain on forgiveness of debt

Litigation expense

( 6,104,387 )

Loss from operations

$ ( 8,397,996 )

$ ( 4,764,739 )

Total Assets:

1 unchanged sentence

Fintech services

NOTE 16 – Quarterly Data - Unaudited

Revised Interim Financial Information

The following tables represent amounts previously

reported and revised as a result of the error associated with the accounting for our Series A Preferred Stock.

See Note 2 for additional

As Previously

March 31, 2022

Preferred dividend payable

Total liabilities

Additional paid-in capital

( 27,061,045 )

Total shareholders’ deficit

$ ( 963,664 )

As Previously

June 30, 2022

Preferred dividend payable

Total liabilities

Additional paid-in capital

( 1,102,654 )

( 28,498,999 )

Total shareholders’ deficit

$ ( 1,102,654 )

As Previously

September 30, 2022

Preferred dividend payable

Total liabilities

Additional paid-in capital

( 30,211,561 )

Total shareholders’ deficit

As Previously

Quarter ended March 31, 2022

$ ( 1,455,596 )

Preferred stock dividends

Net loss allocable to common shareholders

$ ( 1,455,596 )

$ ( 138,990 )

( 1,594,586 )

Loss per share

Weighted average common shares outstanding

Impact of correction of error - quarter

Impact of correction of error - year to date

As Previously

Quarter ended June 30, 2022

$ ( 1,437,954 )

$ ( 2,893,550 )

Preferred stock dividends

$ ( 277,980 )

Net loss allocable to common shareholders

$ ( 1,437,954 )

$ ( 138,990 )

$ ( 1,576,944 )

$ ( 2,893,550 )

$ ( 277,980 )

$ ( 3,171,530 )

Loss per share

Weighted average common shares outstanding

Impact of correction of error - quarter

Impact of correction of error - year to date

As Previously

Quarter ended September 30, 2022

$ ( 1,712,562 )

$ ( 4,606,112 )

Preferred stock dividends

$ ( 416,970 )

Net loss allocable to common shareholders

$ ( 1,712,562 )

$ ( 138,990 )

$ ( 1,851,552 )

$ ( 4,606,112 )

$ ( 416,970 )

$ ( 5,023,082 )

Loss per share

Weighted average common shares outstanding

NOTE 17 – 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

On February 14, 2023, a shareholder reported

to the Company that is had incurred short swing profits of $ 114,654.46 in connection with a series of purchases and sales of the Company’s

stock on the open market.

The shareholder disgorged such short-swing profits to the Company on February 28, 2023.

On March 29, 2023, DMINT entered into a Surrender and Release Agreement

with Bradford Regional Airport Authority relating to the property in Bradford, Pennsylvania whereby DMINT agreed to pay $ 50,000 in exchange

for an early termination of the Leases.

March 31, 2023 is the final day DMINT occupied the property and all mining computers have been

moved to the Selmer, Tennessee location.

Changes in and Disagreements

with Accountants on Accounting and Financial Disclosure

On March 13, 2023,

The OLB Group, Inc.

(the “Company”) was informed by Daszkal Bolton LLP (“Daszkal”), the Company’s

independent registered public accounting firm, that it had completed a business combination agreement with CohnReznick LLP.

result of this transaction Daszkal will resign as the Company’s independent registered public accounting firm following its

filing of the Annual Report on Form 10-K for the year ended December 31, 2022 with the Securities and Exchange Commission.

Daszkal’s reports

on the Company’ financial statements for the past two years did not contain an adverse opinion or a disclaimer of opinion, and were

not qualified or modified as to uncertainty, audit scope, or accounting principles.

During the years ended

December 31, 2021, and 2020, and the subsequent interim periods through November 14, 2022, there were (i) no disagreements (as described

in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) between OLB and Daszkal on any matter of accounting principles or

practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to Daszkal’s satisfaction, would

have caused Daszkal to make reference thereto in its reports on the financial statements for such years;

and (ii) no “reportable

events” within the meaning of Item 304(a)(1)(v) of Regulation S-K, except that Daszkal advised

the Company of material weaknesses in its internal control over financial reporting as of December 31, 2021 and 2020.

On March 28, 2023, the Company approved the engagement

of MAC Accounting Group, LLP (“MAC”) as the Company’s new independent registered public accounting firm, effective

following the Company’s filing of its Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

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