What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-04-15 compared with 2024-04-15 · 182 added, 129 removed, 78 unchanged (80% of the section changed)

35 unchanged sentences

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 money transmission and transactional business.

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

owned subsidiary (“DMINT”) to operate in the Bitcoin mining industry, specifically the mining of Bitcoin.

DMINT initiated

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

configured to mine Bitcoin in Pennsylvania.

As of December 31, 2022, DMINT has purchased 1,000 computers.

In February 2023, it re-deployed

all of the computers to its Selmer, Tennessee location.

On May 14, 2021, the Company formed its wholly

owned subsidiary, OLBit, Inc.

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

related to its emerging money transmission and transactional business.

On July 23, 2021, we formed our wholly owned subsidiary,

(“DMINT”), to operate in the Bitcoin mining industry, specifically the mining of Bitcoin.

DMINT initiated the

first phase of its Bitcoin mining operation by placing data centers and ASIC-based Antminer S19J Pro mining computers specifically configured

to mine Bitcoin in Pennsylvania.

As of December 31, 2024, DMINT has 1,000 computers and had 400 computers online and mining for Bitcoin.

In February 2023, it re-deployed all of the computers to its Selmer, Tennessee location.

At December 31, 2024, DMINT had mined 57.74 Bitcoin.

The Company is currently in the process of spinning off DMINT into a stand-alone entity.

As stated above, we are currently in the process

of spinning off DMINT into a stand-alone entity.

Our planned DMINT spin-off distribution (the “Spin-Off Distribution”) will

occur upon DMINT’s Form S-1 Registration Statement filing being declared effective by the Securities and Exchange Commission, and

the approval by the Nasdaq Capital Market (“NASDAQ”) of the listing of DMINT’s common shares on the NASDAQ.

the consummation of the Spin-Off Distribution, of which there is no guarantee, (i) DMINT will no longer be a wholly owned subsidiary of

the Company and will be a stand-alone entity, (ii) all of DMINT’s outstanding shares of common stock will be owned by the existing

stockholders of the Company, and (iii) DMINT Real Estate Holdings, Inc.

(“DREH”) will remain a wholly owned subsidiary of

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.

share exchange agreement with all of the stockholders 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 share exchange transaction closed on January 3, 2022.

Prior to the closing of the share exchange transaction,

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

Crowd Ignition is a web-based crowdfunding software

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

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 entered into a Membership

Interest Purchase Agreement with SDI Black 001, LLC (“Seller”) whereby the Company acquired from Seller 80.01% of the membership

interests of Moola Cloud, LLC, a Florida limited liability company (f/k/a Cuentas SDI, LLC) (the “LLC”).

The LLC will enable

the Company to focus on marketing to the underbanked communities utilizing the LLC’s 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 LLC’s 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.

On May 20, 2024,

the Company entered into a second Membership Interest Purchase Agreement with the minority member of the LLC (the “Agreement”)

whereby it acquired the remaining 19.99% of the membership interests of the LLC for a purchase price of $215,500.

As a result, effective

May 20, 2024, the Company owns 100% of the LLC.

On August 14, 2024, the LLC changed its name to Moola Cloud, LLC.

The Agreement contains

a restrictive covenant whereby for a period of three (3) years from the closing, none of Seller, including its any of its principals,

executives, officers, directors, managers, employees, salespersons, or entities in which such principal has any interest, will directly

or indirectly (i) induce, attempt to induce, interfere with, disrupt or attempt to disrupt any past, present or prospective business relationship,

solicit, market to, endeavor to obtain as a customer, or contract with any merchant in order to provide services to such Merchant in competition

with the Company;

or (ii) solicit or interfere with, disrupt or attempt to disrupt any past, present or prospective business relationship,

contractual or otherwise any person or entity that is a party to any contract assigned to the Company to terminate its contractual or

business relationship with the Company

On April 26, 2024, the Company filed with the

State of Delaware a Certificate of Amendment to Certificate of Incorporation (the “Certificate of Amendment”) which became

effective on April 26, 2024, to effect a one-for-ten (1:10) reverse stock split (the “Reverse Stock Split”) of the shares

of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) The Reverse Stock Split was approved

by the Company’s stockholders at a special meeting on April 26, 2024.

As a result of the Reverse Stock Split, every

ten (10) shares of issued and outstanding Common Stock was automatically combined into one (1) issued and outstanding share of Common

Stock, without any change in the par value per share.

No fractional shares were issued as a result of the Reverse Stock Split and any

fractional shares resulting from the reverse stock split were rounded down to the nearest number of whole shares so that we will issue

cash in lieu of any fractional shares that such stockholder would have received as a result of the Reverse Stock Split.

Immediately following

the Reverse Stock Split, the number of shares of Common Stock outstanding was reduced from 18,103,462 shares to 1,810,346 shares.

shares of Common Stock underlying the Company’s outstanding stock options and warrants were similarly adjusted along with corresponding

adjustments to their exercise prices.

The number of authorized shares of Common Stock under the Certificate of Incorporation will remain

unchanged at 50,000,000 shares.

Results of Operations

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the Year Ended December 31, 2023

For the year ended December 31, 2023, we had total

revenue of $30,571,637 compared to $30,368,979 of revenue for the year ended December 31, 2022, an increase of $202,658 or 0.1%.

$27,096,245 in transaction and processing fees, $89,532 in merchant equipment sales, $312,565 in revenue from monthly recurring subscriptions,

$538,718 of revenue from the Bitcoin Mining segment, and $2,534,577 of digital product revenue;

compared to $28,950,785 in transaction

and processing fees, $64,900 in merchant equipment sales, $627,1115 in revenue from monthly recurring subscriptions and $726,179 of revenue

from the Bitcoin Mining Segment.

We had a decrease of revenue for our transaction and processing fees of $1,854,540, a decrease of $187,461

of bitcoin mining revenue and a decrease of $314,550 from the monthly recurring subscriptions.

These decreases were offset with an increase

in our digital product revenue of $2,534,577.

Transaction and processing revenue decreased due to a decrease in the in merchants and volume

For the year ended December 31, 2024, we had total revenue of $12,838,988

compared to $30,571,637 of revenue for the year ended December 31, 2023, a decrease of $17,732,649 or 58%.

We earned $9,684,152 in transaction

and processing fees, $75,575 in merchant equipment sales, $521,268 in revenue from monthly recurring subscriptions, $413,332 of revenue

from the Bitcoin Mining segment, and $2,144,661 of digital product revenue;

compared to $27,096,245 in transaction and processing fees,

$89,532 in merchant equipment sales, $312,565 in revenue from monthly recurring subscriptions, $538,718 of revenue from the Bitcoin Mining

Segment and $2,534,577 of digital product revenue.

We had a decrease of revenue for our transaction and processing fees of $17,412,093,

a decrease of $125,386 of bitcoin mining revenue, a decrease of $208,703 from the monthly recurring subscriptions, a decrease in merchant

equipment sales of $13,957 and a decrease of $389,916 of digital product revenue.

Transaction and processing revenue decreased as

a result of the loss of the CBD portfolio.

Bitcoin revenue decreased due to the price of bitcoin dropping in 2024 compared to 2023.

Monthly recurring subscription revenue

decreased due to less subscriptions.

recurring subscription revenue decreased due to less subscriptions.

For the year ended December 31, 2024, we had processing

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Processing and servicing costs decreased in conjunction with the decreased revenue.

Amortization and depreciation expense for the

year ended December 31, 2023 was $4,172,117 compared to $3,664,488 for the year ended December 31, 2022, an increase of $507,629 or 13.9%.

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

Our amortization expense for the

year ended December 31, 2023, was higher due to a onetime adjustment.

Amortization expense for the year ended December

31, 2024 was $533,805 compared to $4,172,117 for the year ended December 31, 2023, a decrease of $3,638,312 or 87.2%.

We record amortization

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

The decrease in the current period is due to the

write off of the CBD portfolio as of December 31, 2023, therefore no amortization was recorded for the asset during the year ended December

Depreciation expense for our Bitcoin Mining Segment

was $2,560,015 for the year ended December 31, 2023 compared to $3,193,683 for the year ended December 31, 2022, a decrease of $633,668

The majority of the decrease was due to reclassing items to construction in process and not deprecating miners until the

construction on the Selmer, TN building is completed.

was $2,616,137 for the year ended December 31, 2024 compared to $2,560,015 for the year ended December 31, 2023, an increase of $56,122

Salary and wage expense for the year ended December

31, 2023 was $3,817,508 compared to $3,073,598 for the year ended December 31, 2022, an increase of $743,910 or 24.2%.

The increase is

due to an increase in staff from the Cuentas SDI acquisition and also accrued bonus expense.

31, 2024 was $2,932,948 compared to $3,817,508 for the year ended December 31, 2023, a decrease of $884,560 or 23.2%.

The decrease is

due to a decrease in headcount.

Professional fees for the year ended December

31, 2023 were $2,336,785 compared to $964,541 for the year ended December 31, 2022, an increase of $1,372,244 or 142%.

31, 2024 were $1,939,542 compared to $2,336,785 for the year ended December 31, 2023, a decrease of $397,243 or 17%.

Professional fees

consist mainly of audit and legal fees.

The increase in the current period is due to an increase in legal fees of approximately $1,333,600

and auditor expenses of approximately $45,800.

Our increase in legal fees can be attributed to the ongoing litigation relating to the

FFS Acquired Merchant Portfolio.

Our increase in audit fees is primarily due to the stand-alone audit of our DMINT subsidiary in connection

with the planned spin-off of the entity.

The decrease in the current period is due to a decrease in legal fees.

General and Administrative (“G&A”)

expense for the year ended December 31, 2023, was $7,078,947 compared to $4,490,731 for the year ended December 31, 2022, an increase

of $2,588,216 or 57.6%.

Some of our larger G&A expenses include insurance policy expense of $404,400 from $319,500 in the prior year.

Insurance expense has increased as a result of the cost to insure the Bitcoin mining machines and the increase in the size of the Company’s

We had credit card processing and bank fees of $1,137,000 from $39,000 in the prior year, contracted services of $913,000 from

$656,000 in the prior year, utilities of $679,500 from $565,000 in the prior year and computer and internet expense of $933,700 from $730,000

in the prior year.

We also had an increase in stock-based compensation of $104,000 for stock option expense.

For the year ended December 31, 2023, we had

total impairment expense of $12,902,787.

expense for the year ended December 31, 2024, was $2,861,300 compared to $7,078,947 for the year ended December 31, 2023, a decrease of

$4,217,647 or 59.6%.

The decrease was mainly due to a $788,700 decrease in banking fees, a decrease of $295,500 in Computer & Software

Expenses, a $353,700 decrease in Utility Expense and a $550,450 decrease in contracted services.

For the year ended December 31, 2024, we had total impairment expense

of $2,962,469 related to Dmint’s exclusive agreement to purchase natural gas.

For the year ended December 31, 2023, we had total

impairment expense of $12,902,788.

$12,642,857 was for the write down of the Acquired Merchant Portfolio.

There was also an

impairment of $259,931 related to the Bitcoin miners owned by DMINT.

There was also an impairment

of $259,931 related to the Bitcoin miners owned by DMINT.

For the year ended December 31, 2024, we recognized

a realized gain from the sale of bitcoin of $222,751 and an unrealized gain on investment of $274,731.

We also had other income of $40,320

and interest expense of $148,483.

In the prior year we had other income of $383,190.

We also had interest expense of

For the year ended December 31, 2023, we recognized a realized gain from the sale of bitcoin of $288,584 and an unrealized gain

on investment of $23,662.

We also had other income of $40,320 and interest expense of $148,483.

Our net loss for year ended December 31, 2024,

was $11,224,911 compared to $23,273,939 for year ended December 31, 2023.

We had an increase in our net loss of $15,486,670 for the reasons

We had a decrease in our net loss of $12,049,028 for the reasons

discussed above.

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Changes in Cash Flows

For the year ended December 31, 2023, we received

$2,046,922 of cash in operating activities, which included our net loss offset by $6,732,132 for amortization and depreciation expense,

$727,758 for stock-based compensation, impairment expense of $12,902,788, a realized gain of $288,584 from the sale of bitcoin

of $288,584 and an unrealized gain on investment of $23,662 and net changes in operating assets and liabilities of $5,274,238.

Operating Activities

For the year ended December 31, 2024, we used

$2,600,036 of cash in operating activities, which included our net loss offset by $3,149,942 for amortization and depreciation expense,

$624,683 for stock-based compensation, stock to be issued for services of $164,999 and net changes in operating assets and liabilities

of ($1,781,965).

$406,500 for stock-based compensation, impairment expense of $2,962,469, a realized gain of $222,751 from the sale of bitcoin and a realized

gain on investment of $274,731 and net changes in operating assets and liabilities of $2,598,309.

For the year ended December 31, 2023, we received $2,046,922 of cash

in operating activities, which included our net loss offset by $6,732,132 for amortization and depreciation expense, $727,758 for stock-based

compensation, impairment expense of $12,902,788, a realized gain of $288,584 from the sale of bitcoin and an unrealized gain on investment

of $23,662 and net changes in operating assets and liabilities of $5,274,238.

Investing Activities

For the year ended December 31, 2024, we received

$332,893 of cash used for investing activities.

We received $548,393 from the sale of investment and used $215,500 to purchase the

remaining 19.99% interest in the LLC.

For the year ended December 31, 2023, we used

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and $850,000 the purchase of an 80.01% interest in Cuentas SDI, LLC.

For the year ended December 31, 2022, we used

$1,562,361 of cash used for investing activities to acquire property and equipment.

Financing Activities

For the year ended December 31, 2024, we received

net cash of $2,115,843 from financing activities as a result of receiving $1,191,282 from our CEO, $1,090,890 from the sale of common

stock, $6,840 in proceeds from exercise of options by related parties, and an increase in our cash overdraft of $31,750.

We made repayments

on our note payable of $204,919.

For the year ended December 31, 2023, we used

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payable of $226,457 along with $12,678 in advances from related parties.

For the year ended December 31, 2022, we received

net cash of $447,429 from financing activities.

We received a loan payable of $875,000, of which we repaid $317,571 and used $110,000

in cash for the acquisition of treasury stock

Liquidity and Capital Resources

1 unchanged sentence

$27,436 and negative working capital of $8,650,939.

On August 11, 2020, the Company closed an offering

of its securities (the “Offering”) for gross proceeds of $6.45 million.

The Company sold 700,000 units consisting of (a) one

share of our common stock;

(b) two Series A Warrants, and (c) one-half of one Series B warrant.

In addition, the underwriter

fully exercised its option to purchase 210,000 Series A warrants and 52,500 Series B warrants.

While 20% of the net proceeds of $5.5 million

was used to repay a portion of our outstanding Term Loan, immediately following the Offering, the Company had cash of $5.6 million on

As such, the Company believes it will be able fund future liquidity and capital requirements through cash flows generated from its

operating activities for a period of at least twelve months from the date its condensed consolidated financial statements are issued.

On March 2, 2021, the Company, utilizing a portion

of funds received from the exercise of outstanding warrants, paid approximately $7.7 million to the pay off the entire outstanding amount

of the Term Loan.

In connection with the extinguishment of the obligations under the Term Loan, 40,000 warrants to purchase Common Stock

were cancelled.

In addition, the Company has received a Paycheck

Protection Program loan under the CARES Act for approximately $236,000 (the “PPP Loan”).

On October 11, 2021, the Company

obtained forgiveness of all amounts due under the PPP Loan.

On November 2, 2021, the Company entered into

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

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

for a total of 2,576,364 shares of Common Stock (the “Prefunded Warrant Shares”) with an exercise price of $0.0001 per Prefunded

Warrant Share, and (iii) warrants exercisable for a total of 4,545,455 shares of Common Stock (the “Common Warrant Shares”

and together with the Prefunded Warrant Shares, the “Warrant Shares”) with an exercise price of $6.50 per Common Warrant Share.

The offering closed on November 5, 2021 and the Company received net proceeds of approximately $22.9 million, after deducting placement

agent fees and other offering expenses.

The Company intends to use the net proceeds from the offering to invest in or acquire companies

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

capital and general corporate purposes.

The Company has reviewed its cash flow activity

during 2023 and projected cash flow forecast for 2024 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 Annual Report.

a result of (a) the improved transaction volume trends the Company experienced during 2022 and 2023, (b) the increase in the number of

merchants after the acquisitions of several portfolios during 2021 and 2023, and (c) the funds received from the capital raises and PPP

Loan, as discussed above, the Company believes it has sufficient liquidity in order to sustain operations for at least the twelve months

following the filing of this Annual Report.

On February 16, 2024, the Company entered into

an Equity Distribution Agreement (the “Agreement”) with Maxim Group LLC (“Maxim”) to create an at-the-market equity

Under the Agreement, the Company may offer and sell its common stock, par value $0.0001 per share, from time to time having an

aggregate offering amount of up to $15,000,000 (the “Shares”) during the term of the Agreement through Maxim, as sales agent

(the “ATM Offering”).

The Company has agreed to pay Maxim a commission equal to 3.0% of the gross sales price from the sales

of Shares pursuant to the Agreement.

In addition, the Company agreed to reimburse Maxim for its costs and out-of-pocket expenses incurred

in connection with its services, including the fees and out-of-pocket expenses of its legal counsel.

As of December 31, 2024, the ATM

Offering has resulted in net proceeds of $1,090,890.

During the twelve months ended December 31, 2024,

Yakov made payments on behalf of the Company in the amount of $1,191,282.

As of December 31, 2024, the Company owes Mr.

Yakov $1,203,960.

On August 12, 2024, the Company entered into an agreement with Yakov

Holdings LLC, an entity controlled by Mr.

Yakov (the “Yakov LLC”) whereby the Yakov LLC committed to loan to the Company up

to Five Million Dollars ($5,000,000) (the “Yakov LLC Loan”).

The Yakov LLC Loan is revolving in nature, allowing the Company

to borrow, repay, and re-borrow amounts under the terms and conditions set forth herein, provided that the total outstanding amount shall

not exceed Five Million Dollars ($5,000,000).

The interest rate of the Yakov LLC Loan is twelve percent (12%) and it matures on March

In addition, the Yakov LLC Loan is secured by a first priority security interest for the benefit of the Yakov LLC over all of

the assets of the Company.

The Company has reviewed its cash flow activity during 2024 and projected

cash flow forecast for 2025 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 Annual Report.

Based on projected cash to

be used in operations to be offset by expected proceeds from the ATM program and loan proceeds from Ronny Yakov under the loan agreement,

the Company believes it has sufficient liquidity in order to sustain operations for at least the twelve months following the filing of

this Annual Report.

However, management recognizes that it may be required to obtain additional resources 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

Without raising additional capital, either via additional advances made pursuant to the ATM, related party loan or from other sources,

there is substantial doubt about the Company’s ability to continue as a going concern through March 31, 2026.

The accompanying consolidated

financial statements have been prepared assuming that the Company will continue as a going concern.

This basis of presentation contemplates

the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business.

Significant Accounting Policies

Refer to Note 2 of our financial statements

contained elsewhere in this Form 10-K for a summary of our significant accounting policies and recently adopting and issued

accounting standards.

Refer to Note 2 of our financial statements contained

elsewhere in this Form 10-K for a summary of our significant accounting policies and recently adopting and issued accounting standards.

Quantitative and Qualitative

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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-K

Item 7. Management’s Discussion and Analysis