Item 1. Legal Proceedings
ITEM 1. LEGAL PROCEEDINGS
The Company is engaged in ongoing litigation
with FFS relating to a breach of contract in connection with the Acquired Merchant Portfolio whereby the Company is making a claim
to recover the purchase price of the Acquired Merchant Portfolio and FFS is claiming to be paid the full purchase price of the
Acquired Merchant Portfolio,. In addition, in connection with the litigation with FFS, the Company has also made a claim against
Clear Fork Bank (the “Bank”), the payment processing bank for the Acquired Merchant Portfolio, for damages the Company
suffered as a result of it having to cease processing transactions for the merchants underlying the Acquired Merchant Portfolio. The
Bank has filed a counterclaim for fees incurred by it in connection with the transactions processed since the acquisition of the
Acquired Merchant Portfolio by the Company. However, the damages claimed have been materially reduced over time due to account
balancing which was not completed at the time of the counterclaim.
DMINT is currently in a contract dispute with a contractor. The Company
has paid $100,000 to the contractor for work completed and materials provided and returned materials to offset the potential liability
of approximately $444,000. The Company has recorded just over $315,000 in accounts payable related to the matter. The matter continues
to be in discovery; however, the parties continue to discuss settlement. The parties are working on a payment schedule but have been unable
to agree on terms to date.
Other than discussed above, there are no
material claims, actions, suits, proceedings, or investigations that are currently pending or, to the Company’s knowledge, threatened
by or against the Company or respecting its operations or assets, or by or against any of the Company’s officers, directors, or
affiliates.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined
by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES
AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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