What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-21 compared with 2023-05-15 · 230 added, 170 removed, 27 unchanged (94% of the section changed)

2 unchanged sentences

Forward-Looking Statements

The information in this report contains forward-looking statements.

The information in this report

contains forward-looking statements.

All statements other than statements of historical fact made in this report are forward-looking.

In particular, the statements herein

regarding industry prospects and future results of operations or financial position are forward-looking statements.

These forward-looking

statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,”

“probably,” anticipates,” “projects,” “expects,” “may,” “will,” or “should”

or other variations or similar words.

No assurances can be given that the future results anticipated by the forward-looking statements

will be achieved.

Forward-looking statements reflect management’s current expectations and are inherently uncertain.

If underlying

assumptions prove inaccurate or unknown risks or uncertainties materialize, our actual results may differ significantly from management’s

expectations.

These risks and uncertainties include those factors described in greater detail in the risk factors disclosed in our Form

10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission.

Should one or more of these risks

or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those

anticipated in these forward-looking statements.

The Company undertakes no obligation to update or revise any forward-looking statements,

whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

You are cautioned not to place undue reliance

on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or, in the case of documents

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

The following discussion and analysis should be

read in conjunction with our unaudited financial statements, included herewith.

This discussion should not be construed to imply that

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

of actual operating results in the future.

In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking

These forward-looking statements can be identified by the use of words such as “believes,” “estimates,”

“could,” “possibly,” “probably,” anticipates,” “projects,” “expects,”

“may,” “will,” or “should” or other variations or similar words.

No assurances can be given that the

future results anticipated by the forward-looking statements will be achieved.

Forward-looking statements reflect management’s current

expectations and are inherently uncertain.

If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, our

actual results may differ significantly from management’s expectations.

These risks and uncertainties include those factors described

in greater detail in the risk factors disclosed in our Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities

and Exchange Commission.

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect,

actual results may vary in material respects from those anticipated in these forward-looking statements.

The Company undertakes no

obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except

as may be required under applicable securities laws.

You are cautioned not to place

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

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

The following discussion and

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

This discussion should not be construed

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

be indicative of actual operating results in the future.

Such discussion represents only the best present assessment of our management.

Company Overview and Description of Business

We are a FinTech company that focuses on a suite of products in the

merchant services and payment facilitator verticals that seek to provide integrated business solutions to merchants throughout the United States.

We seek to accomplish this by providing merchants with a wide range of products and services through our various online platforms, including

financial and transaction processing services.

We also have products that provide support for crowdfunding and other capital raising initiatives.

We supplement our online platforms with certain hardware solutions that are integrated with our online platforms.

Our business functions

primarily through three wholly-owned subsidiaries, eVance, OmniSoft, and CrowdPay, though substantially all of our revenue has been

generated from our eVance business (we began generating revenue from our OmniSoft and CrowdPay businesses in the second half of 2019).

We expect to build out our OmniSoft software business and to rely more on our payment processing model for revenue so that we are not

dependent on our revenue from our eVance business but there is no guarantee that we will be able to do so.

With respect to our eVance business, our merchants

are currently processing over $100,000,000 in gross transactions monthly and average approximately 1,400,000 transactions a month.

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

The accounts consist of businesses across the

United States with no concentration of industries or merchants.

We have integrated all the applications for OmniSoft and the ShopFast

Omnicommerce solution with the eVance mobile payment gateway, SecurePay.comTM.

SecurePay.comTM, is currently used by approximately 3,000

merchants processing over 32,000 transactions and approximately $9,000,000 of monthly gross transactions (though our revenue from these

transactions is limited).

In July 2019, we launched a new merchant and ISO boarding system that will be able to onboard merchants instantly.

This provides the merchant with an automated approval and ISOs will have the ability to see all their merchants and their residuals as

they load into the system.

On May 22, 2020, the Company purchased certain

assets from POSaBIT Inc.

(“POSaBIT”), including its contracts and arrangements with the Doublebeam merchant payment processing

platform (the “POSaBIT Asset Acquisition”).

The assets included, but were not limited to, software source codes, customer

lists, customer contracts, hardware and website domains.

On May 14, 2021, the Company formed OLBit, Inc., a wholly-owned subsidiary

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

and transactional business.

On July 23, 2021, we formed DMINT, Inc., a wholly-owned subsidiary

(“DMINT”) to operate in the cryptocurrency mining industry.

DMINT has initiated the first phase of the Bitcoin mining operation

by placing purchase orders for data centers and ASIC-based Antminer S19J Pro mining computers specifically configured to mine Bitcoin.

The first lot of equipment is being used to establish a proof of concept before DMINT expands the number of computers in operation.

of September 30, 2022, DMint has purchased 1,000 computers, of which all computers have been delivered with 350 online and mining for

Bitcoin and 400 computers are in process of being installed at the Company’s newly acquired building in Selmer, Tennessee.

six data centers located in Pennsylvania where it has mined 25 Bitcoin.

It has entered into an exclusive agreement whereby it has rights

to all of the natural gas produced by 15 mines in Bradford, Pennsylvania.

The natural gas is taken directly from the well heads to generate

electricity required to power the mining computers.

As configured, it is expected that the computers purchased will have a combined computing

power of approximately 100 petahash per second.

If the initial mining operation results are as anticipated, DMINT plans to expand the

number of mining computers every quarter, whereby it would aim to have the computing power of 500 petahash per second by the end of 2022.

On November 24, 2021, we entered into an Asset

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

we acquired a portfolio of merchants utilizing financial transaction processing services (the “Acquired Merchant Portfolio”).

We are a FinTech company that

focuses on a suite of products in the merchant services and payment facilitator verticals that seek to provide integrated business solutions

to merchants throughout the United States.

We seek to accomplish this by providing merchants with a wide range of products and services

through our various online platforms, including financial and transaction processing services.

We also have products that provide support

for crowdfunding and other capital raising initiatives.

We supplement our online platforms with certain hardware solutions that are integrated

with our online platforms.

Our business functions primarily through three wholly-owned subsidiaries, eVance, OmniSoft, and CrowdPay,

though substantially all of our revenue has been generated from our eVance business (we began generating revenue from our OmniSoft and

CrowdPay businesses in the second half of 2019).

We expect to build out our OmniSoft software business and to rely more on our payment

processing model for revenue so that we are not dependent on our revenue from our eVance business but there is no guarantee that we will

be able to do so.

With respect to our eVance

business, our merchants are currently processing over $100,000,000 in gross transactions monthly and average approximately 1,400,000 transactions

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

The accounts consist of businesses

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

We have integrated all the

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

SecurePay.comTM,

is currently used by approximately 3,000 merchants processing over 32,000 transactions and approximately $9,000,000 of monthly gross transactions

(though our revenue from these transactions is limited).

In July 2019, we launched a new merchant and ISO boarding system that will be

able to onboard merchants instantly.

This provides the merchant with an automated approval and ISOs will have the ability to see all their

merchants and their residuals as they load into the system.

On May 22, 2020, the

Company purchased certain assets from POSaBIT Inc.

(“POSaBIT”), including its contracts and arrangements with the Doublebeam

merchant payment processing platform (the “POSaBIT Asset Acquisition”).

The assets included, but were not limited to, software

source codes, customer lists, customer contracts, hardware and website domains.

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 lending and transactional business.

On July 23, 2021, we formed

DMINT, Inc., a wholly-owned subsidiary (“DMINT”) to operate in the cryptocurrency mining industry.

DMINT has initiated the

first phase of the Bitcoin mining operation by placing purchase orders for data centers and ASIC-based Antminer S19J Pro mining computers

specifically configured to mine Bitcoin.

The first lot of equipment is being used to establish a proof of concept before DMINT expands

the number of computers in operation.

As of September 30, 2022, DMint has purchased 1,000 computers, of which all computers have been

delivered with 350 online and mining for Bitcoin and 400 computers are in process of being installed at the Company’s newly acquired

building in Selmer, Tennessee.

It has six data centers located in Pennsylvania where it has mined 25 Bitcoin.

It has entered into an exclusive

agreement whereby it has rights to all of the natural gas produced by 15 mines in Bradford, Pennsylvania.

The natural gas is taken directly

from the well heads to generate electricity required to power the mining computers.

As configured, it is expected that the computers purchased

will have a combined computing power of approximately 100 petahash per second.

If the initial mining operation results are as anticipated,

DMINT plans to expand the number of mining computers every quarter, whereby it would aim to have the computing power of 500 petahash per

second by the end of 2022.

On November 24, 2021, we entered

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

whereby we acquired a portfolio of merchants 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,

3 unchanged sentences

the overall purchase price.

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).

Crowd Ignition is a web-based crowdfunding software

Ronny Yakov, Chairman and CEO of the Company and John Herzog, a shareholder of the Company, owned 100% of the equity of Crowd

The software provides broker-dealer, merchant banks and law firms a platform to market crowdfunding offerings, collect payments

and issue securities.

The software has been developed in response to, and to comply with, recent changes in investment regulations including

Regulation D 506(b) and 506(v), Regulation A+ and Title III of the Jobs Act (Regulation CF), including raising the crowdfunding limit

from $1.07 million to $5.0 million.

Crowd Ignition is one of only about 50 companies registered with the SEC to provide the services permitted

under Regulation CF.

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).

Crowd Ignition is a web-based

crowdfunding software system.

Ronny Yakov, Chairman and CEO of the Company and John Herzog, a shareholder of the Company, owned 100% of

the equity of Crowd Ignition.

The software provides broker-dealer, merchant banks and law firms a platform to market crowdfunding offerings,

collect payments and issue securities.

The software has been developed in response to, and to comply with, recent changes in investment

regulations including Regulation D 506(b) and 506(v), Regulation A+ and Title III of the Jobs Act (Regulation CF), including raising the

crowdfunding limit from $1.07 million to $5.0 million.

Crowd Ignition is one of only about 50 companies registered with the SEC to provide

the services permitted under Regulation CF.

On June 15, 2023, the Company

acquired 80.1% of the membership interests of Cuentas SDI, LLC, a Florida limited liability company (“SDI”).

SDI will enable

the Company to focus on marketing to the underbanked communities utilizing the SDI debit and calling card platform’s ability for

users to reload cash to their account and provide instant access to digital products to their customers’ Mobile App and digital

wallet into its electronic portal.

The Company plans to market to the SDI merchant network, which currently has approximately 31,600 locations

in the United States, the ability of having one POS system that will allow the retail customer to purchase products using OLB’s

payment processing solutions along with the ability to reload payment cards and their mobile phone minutes.

Results of Operations

Management’s discussion and analysis of

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

of The OLB Group, Inc.

and its subsidiaries for the three months ended March 31, 2023 and 2022.

Three Months Ended March 31, 2023 Compared

to the Three Months Ended March 31, 2022

For the three months ended March 31, 2023, we

had total revenue of $6,622,589 compared to $8,786,459 of revenue for the three months ended March 31, 2022, a decrease of $2,163,870

We earned $6,353,471 in transaction and processing fees, $24,764 in merchant equipment rental and sales, $77,605 in other revenue

from monthly recurring subscriptions and $166,749 of other revenue from the Cryptocurrency Mining segment during the three months

ended March 31, 2023, compared to $ 8,413,429 in transaction and processing fees, $17,168 in merchant

equipment rental and sales, $91,522 in other revenue from monthly recurring subscriptions and $264,340 of other revenue from the

Cryptocurrency Mining segment during the three months ended March 31, 2022 .

The decrease in revenue was a result of a decrease

in the amount of fees earned from merchant processing transactions compared to the prior year primarily due to the removal and termination

of service of approximately 700 merchants that were part of the Acquired Merchant Portfolio due to their non-compliance with the credit

card processing rules.

The removal of the merchants is the subject of ongoing litigation discussed in the notes to our financial statements

Processing and servicing costs decreased by $1,180,703 or 18.9%, from $6,258,137 in the prior period to $5,077,434 for the same

Management’s discussion

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

from operations of The OLB Group, Inc.

and its subsidiaries for the three and six months ended June 30, 2023 and 2022.

Three Months Ended June 30, 2023 Compared

to the Three Months Ended June 30, 2022

For the three months ended June 30, 2023, we had total revenue of $8,344,012

compared to $8,372,435 of revenue for the three months ended June 30, 2022, a decrease of $58,721 or 0.8%.

We earned $7,755,248 in transaction

and processing fees, $22,519 in merchant equipment rental and sales, $71,268 in other revenue from monthly recurring subscriptions, $137,541

of revenue from the Cryptocurrency Mining segment and $357,436 of revenue from the sale of digital products.

For the three months ended

June 30, 2022, we earned $7,813,969 in transaction and processing fees, $18,174 in merchant equipment rental and sales, $332,326 in other

revenue from monthly recurring subscriptions and $207,966 of other revenue from the Cryptocurrency Mining segment.

The decrease in

revenue was a result of a decrease in the amount of fees earned from merchant processing transactions compared to the prior year primarily

due to the removal and termination of service of approximately 700 merchants that were part of the Acquired Merchant Portfolio due to

their non-compliance with the credit card processing rules.

The removal of the merchants is the subject of ongoing litigation discussed

in the notes to our financial statements above.

Processing and servicing costs decreased by $1,281,466 or 19.2%, from $6,672,141 in the

prior period to $5,390,675 for the same reason.

Amortization and depreciation expense for the

three months ended March 31, 2023, was $899,831 compared to $998,590 for the three months ended March 31, 2022, a decrease of $98,759

We record amortization expense on our merchant portfolio, trademarks and natural gas purchase rights.

Our amortization expense

for the three months ended March 31, 2023, decreased in the current year period due to the valuation of the agreement with Cai Energy

to purchase natural gas to operate the Bitcoin mining computers used in the Cryptocurrency Mining segment.

Depreciation expense for our

Cryptocurrency Mining segment for the three months ended March 31, 2023 was $799,717 compared to $891,756 for the three months ended March

31, 2022, a decrease of $92,039 or 10.3%.

Depreciation expense for our Cryptocurrency Mining segment decreased in the current year period

because no new equipment was acquired during the period.

three months ended June 30, 2023, was $899,831 compared to $903,353 for the three months ended June 30, 2022, a decrease of $3,522 or

0.4%, thus fairly consistent between periods.

We record amortization expense on our merchant portfolio, trademarks and natural gas purchase

Depreciation expense for our Cryptocurrency Mining segment for the three months ended June 30, 2023 was $799,716 compared to $702,494

for the three months ended June 30, 2022, an increase of $97,222 or 13.8% due to depreciating more bitcoin mining equipment in the current

Salary and wage expense for the three months ended

March 31, 2023, was $690,352 compared to $533,859 for the three months ended March 31, 2022, an increase of $156,493 or 29.3%.

and wage expense has increased due to an increase in salary and bonuses for our officers.

Professional fees for the three months ended March

31, 2023, were $369,344 compared to $324,407 for the three months ended March 31, 2023, an increase of $44,937 or 13.9%.

fees consist mainly of audit and legal fees.

The increase in the current period is due to litigation-related legal expenses.

General and administrative expenses (“G&A”) for the

three months ended March 31, 2023, was $1,188,045 compared to $1,235,317 for the three months ended March 31, 2022, a decrease of $47,272

Some of our larger G&A expenses included insurance policy expense of approximately $59,000 as a result of the cost to insure

the Bitcoin mining machines and the increase in the size of the Company’s business, expenses for outside services were $140,000,

a decrease from $259,000 in the same period of 2022, travel expense of $53,000 from $108,000 in the same period of 2022, and utilities

We also had a $106,100 reduction of our marketing expenses.

For the three months ended March 31, 2023, we

had total other expense of $213,271 from a realized loss of $327,925 on the sale of Bitcoin and other income of $114,654, compared to

other income of $11 for the three months ended March 31, 2022.

Our net loss for the three months ended March 31, 2023 was $2,615,405

compared to $1,455,596 for the three months ended March 31, 2023.

We had an increase in our net loss of $1,159,809 for the reasons discussed

June 30, 2023, was $692,480 compared to $622,914 for the three months ended June 30, 2022, an increase of $69,566 or 11.2%.

wage expenses have increased due to an increase in salary and bonuses paid to our officers during the 2023 period.

Professional fees for the three months ended June

30, 2023, were $219,782 compared to $294,747 for the three months ended June 30, 2023, a decrease of $74,965 or 25.4%.

Professional fees

consist mainly of audit and legal fees.

The decrease in the current period is due to less litigation-related legal expenses during the

General and administrative expenses for the three months ended June

30, 2023 was $973,264 compared to $1,007,908 for the three months ended June 30, 2022, a decrease of $34,644 or 3.4%, remaining fairly

consistent over time.

For the three months ended June 30, 2023, we had total other income

of $42,193 from a realized gain of $48,683 on the sale of cryptocurrency and an unrealized loss on investment of $6,490, compared to other

income of $393,168 for the three months ended June 30, 2022.

In the prior period we recognized a gain of $393,158 from the reversal of

a liability associated with a prior adverse judgement on appeal.

For the three months ended June 30, 2023, we had

$1,725 of net income attributed to the non-controlling interest of Cuentas SDI, LLC, due to the acquisition of 80.01% interest of the

entity during the current period.

Our net loss for the three months ended June 30, 2023, after the reduction

for minority interest, was $587,818 compared to $1,437,954 for the three months ended June 30, 2023.

This was an increase in our net loss

of $850,136 for the reasons discussed above.

Six Months Ended June 30, 2023 Compared

to the Six Months Ended June 30, 2022

For the six months ended June 30, 2023, we had total revenue of $14,966,601

compared to $17,158,894 of revenue for the six months ended June 30, 2022, a decrease of $2,118,679 or 13.1%.

We earned $14,108,719 in

transaction and processing fees, $47,283 in merchant equipment rental and sales, $148,873 in other revenue from monthly recurring subscriptions,

$304,290 of other revenue from the Cryptocurrency Mining segment and $357,436 of revenue from the sale of digital products during the

six months ended June 30, 2023, compared to $16,227,398 in transaction and processing fees, $35,342 in merchant equipment rental and sales,

$423,848 in other revenue from monthly recurring subscriptions and $472,306 of other revenue from the Cryptocurrency Mining segment

during the six months June 30, 2022.

The decrease in revenue was a result of a decrease in the amount of fees earned from merchant processing

transactions compared to the prior year primarily due to the removal and termination of service of approximately 700 merchants that were

part of the Acquired Merchant Portfolio due to their non-compliance with the credit card processing rules.

The removal of the merchants

is the subject of ongoing litigation discussed in the notes to our financial statements above.

Processing and servicing costs decreased

by $2,462,169 or 19% from $12,930,278 in the prior period to $10,468,109 for the same reason.

Amortization and depreciation expense for the

six months ended June 30, 2023, was $1,799,662 compared to $1,901,943 for the six months ended June 30, 2022, a decrease of $102,943 or

5.4% due to fully depreciating certain assets in the prior year.

We record amortization expense on our merchant portfolio, trademarks

and natural gas purchase rights.

Depreciation expense for our cryptocurrency mining segment was $1,599,433 in the current period compared

to $1,594,250 in the prior period, an increase of $5,183 or 0.3%, thus fairly consistent between periods.

Salary and wage expense for the six months ended

June 30, 2023 was $1,382,832 compared to $1,156,773 for the six months ended June 30, 2022 an increase of $226,059 or 19.5%.

wage expenses have increased due to an increase in salary and bonuses paid to our officers during the 2023 period.

Professional fees for the six months ended June 30, 2023 were $589,126

compared to $619,154 for the six months ended June 30, 2022, a decrease of $30,028 or 4.9%.

Professional fees consist mainly of audit

and legal fees and the decrease was due to less litigation-related legal expenses during the 2023 period.

General and administrative expenses (“G&A”)

for the six months ended June 30, 2023 was $2,161,309 compared to $2,243,225 for the six months ended June 30, 2022, a decrease of $81,916

Some of our larger G&A expenses included insurance policy expense of $216,000 as a result of the cost to insure the cryptocurrency

mining machines and the increase in the size of the Company’s business, travel of $160,000 from $179,000 in the same period of 2022,

marketing and promotion of $58,000 from $183,000 in the same period of 2022, contracted services of $229,000 from $439,000 in the same

period of 2022, utilities of $280,00 from $231,000 in the same period of 2022 and computer and internet expense of $350,000 from $277,000

in the same period of 2022.

For the six months ended June 30, 2023, we had

total other expense of $171,078 compared to other income $393,179 for the six months ended June 30, 2022.

In the current period we had

a loss of $279,242 from the sale of cryptocurrency, an unrealized loss on investment of $6,490, and other income of $114,654, compared

to other income of $393,179 for the six months ended June 30, 2022.

In the prior period we recognized a gain of $393,158 from the reversal

of a liability associated with a prior adverse judgement on appeal.

For the six months ended June 30, 2023, we had

$1,725 of net income attributed to the non-controlling interest of Cuentas SDI, LLC, due to the acquisition of 80.01% interest of the

entity during the current period.

Our net loss for the six months ended June 30,

2023, after the reduction for minority interest, was $3,203,223 compared to $2,893,550 for the six months ended June 30, 2022.

an increase in our net loss of $309,673 for the reasons discussed above.

Liquidity and Capital Resources

Trends and Uncertainties

The Company’s financial condition

and results of operations may be adversely affected by a further prolonging of the COVID-19 pandemic.

The New York and Atlanta areas, including the location of the Company’s

corporate headquarters and its operations business, continued to experience impacts of the COVID-19 pandemic in the U.S.

as some workers

were forced to quarantine or convalesce as a result of the spread of the COVID-19 virus.

The Company is currently following the recommendations

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

During 2022, the Company did not attribute any material

impact on its business as a result of the pandemic.

If there was another increase in cases requiring quarantines or closures of businesses

by our merchants, the duration of the business disruption and related financial impact cannot be reasonably estimated at this time.

the Company has specific business continuity plans to reduce the potential impact of COVID-19 into the future, and believes that its business

being principally operated using digital platforms, in the long-term, will suffer minimal ongoing negative impact, there is no guarantee

that the Company’s continuity plans will be successful or that the Company’s merchants will meet the number of forecasted

transactions.

Changes in Cash Flows

For the three months ended March 31, 2023, we

received $570,783 of cash from operating activities, which included our net loss, offset by $1,699,548 for amortization and depreciation

expense, $132,788 for stock-based compensation, $327,925 for realized losses on the sale of bitcoin, and net changes in operating assets

and liabilities of $1,025,482.

For the three months ended March 31, 2023, we

used net cash of $2,561 in financing activities as a result of a cash overdraft of $71,953 and payments on a note payable of $74,514.

For the six months ended June 30, 2023, we received $1,002,249 of cash

from operating activities, which included our net loss of $3,204,948 plus our operating lease expense, net of repayment of $8,444 offset

by $3,399,095 for amortization and depreciation expense, $132,788 for stock-based compensation, $279,242 from the loss on sale of cryptocurrency

and net changes in operating assets and liabilities of $1,254,516.

For the six months ended June 30, 2023, we used

net cash of $157,077 in financing activities as a result of a cash overdraft of $8,050 and payments on a note payable of $149,027 and

used $1,995,421 in investing activities as a result of the acquisition of property and equipment of $1,145,421 and the purchase of an

80.01% interest in Cuentas SDI, LLC for $850,000.

Liquidity and Capital Resources

At March 31, 2023, the Company had cash of $64,627 and a working capital

At June 30, 2023, the Company had cash of $133,777 and a working capital

deficit of $2,136,160.

The Company has approximately $5,371,000 of outstanding liabilities.

Company has reviewed its projected operating cash flows for the remainder of 2023 and performed an overall analysis of market trends

to determine whether or not it has sufficient liquidity to continue as a going concern for a period of at least twelve months from

the date of this Quarterly Report.

As a result of (a) improving transaction volume trends and positive cash flow in the second

quarter, and (b) increasing the number of merchants processing payments, the Company believes it has sufficient liquidity in order

to sustain operations for at least the twelve months following the filing of this Quarterly Report

The Company has reviewed its projected operating cash flows for the

remainder of 2023 and performed an overall analysis of market trends to determine whether or not it has sufficient liquidity to continue

as a going concern for a period of at least twelve months from the date of this Quarterly Report.

As a result of (a) improving transaction

volume trends and positive cash flow in the second quarter, and (b) an increase in revenues created from the purchase of Cuentas SDI,

LLC in June 2023, the Company believes it has sufficient liquidity in order to sustain operations for at least the twelve months following

the filing of this Quarterly Report.

Critical Accounting Policies

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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 2. Management’s Discussion and Analysis