OLB GROUP, INC. 10-K

Item 8. Financial Statements and Supplementary Data INDEX TO FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID # 587) F-2 Report of Independent Registered Public Accounting Firm (PCAOB ID # 6258) F-3 Consolidated Balance Sheets at December 31, 2024 and 2023 F-5 Consolidated Statements of Operations for the Years Ended December 31, 2024 and 2023 F-6 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2024 and 2023 F-7 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023 F-8 Notes to the Consolidated Financial Statements F-9 F- 1 7915 FM 1960 W Suite 220 Houston, TX 77070 www.rbsmllp.com Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of OLB Group, Inc. and Subsidiaries Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheet of OLB Group, Inc. and subsidiaries (the “Company”) as of December 31, 2024, and the related consolidated statement of operations, changes in stockholders’ equity and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. The Company’s Ability to Continue as a Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has recurring losses from operations, limited cash flow, and an accumulated deficit. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty. Our opinion is not modified with respect to that matter. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ RBSM LLP We have served as the Company’s auditor since 2024. Houston, TX April 15, 2025 PCAOB ID Number 587 F- 2 Report of Independent Registered Public Accounting Firm Board of Directors and Stockholders The OLB Group, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of The OLB Group, Inc. as of December 31, 2023, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of The OLB Group, Inc. as of December 31, 2023, and the results of its operations and its cash flows for the year then ended in conformity accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on the entity’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to The OLB Group, Inc. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The OLB Group, Inc. is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters 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 matters 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 matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Stock Based Compensation (Note 9) During the year ended December 31, 2023, the Company was to grant stock options to their CEO, Ronny Yakov, to purchase 200,000 shares of common stock pursuant to the terms of his employment agreement, however, there were delays that resulted in the options being issued and then exercised subsequent to December 31, 2023. As a result of the delay, the Company failed to initially capture the option grant in their books. Upon discovery of this oversight the Company used the Black Scholes Merton option pricing model to calculate the grant date fair value of the award which required a number of inputs based on management’s estimates. In order to audit the grant date fair value for Mr. Yakov’s option grant we had to review the specific terms of the award and had to review the Company’s calculation of fair value and determine the reasonableness of each input into the calculation, which included a determination of the grant date, along with estimates of expected life and volatility. Also during our audit, we had to test the reasonableness of the stock-based compensation recorded by the Company and noted that in addition to the value captured for Mr. Yakov’s options it included amounts the Company had to capture related to options granted in prior years due to compensation expense being recognized over service periods and/or based on the expected timing of a performance, market, or service condition being met. To audit this amount, we had to obtain support for options issued as far back as 2018 and review the terms and valuations of all grants. Accordingly, testing the Company’s stock-based compensation was challenging, time consuming, and there was subjectivity involved with complex auditor judgment due to the estimates that had to be tested, all of which resulted in significant audit effort. As a result of our audit procedures adjustments were recorded to ensure recorded equity and expense amounts were reasonable. F- 3 Business Combination (Note 7) During the year ended December 31, 2023, the Company entered into a Membership Interest Purchase Agreement that was accounted as a business combination under ASC 805 which required the Company to determine the fair market value of assets acquired, liabilities assumed, and the non-controlling interest. As this disclosure was considered material to the financial statements, we identified a risk of material misstatement related to this transaction. In order to audit the Company’s business combination, we reviewed managements analysis of the transaction, obtained an understanding of all aspects of the transaction, and completed our own detailed analysis of the accounting literature governing business combinations to ensure the accounting treatment was reasonable. We also reviewed the reasonableness of the fair value estimates for all recorded amounts. Due to the extensive analysis of the transaction as well as the judgment and subjectivity that was involved in applying audit procedures there was significant audit effort required to ensure the transaction was properly accounted for. Bitcoin Mining Transactions (Note 2) The Company’s operations and activities include bitcoin mining and the exchange of bitcoin for U.S. dollars and such transactions have inherent audit complexities associated with them. The Company has entered into a third-party subscription agreement to monitor their bitcoin activity and has entered into a digital asset mining pool contract with a third-party to provide computing power in exchange for earning bitcoin. The Company has used significant judgment to determine its accounting for its bitcoin mining revenue and it took significant time, effort, and subjectivity during our audit to ensure revenue and exchange transactions were properly stated. In order to test the Company’s recognition of revenue we obtained a detailed understanding of the Company’s operations and its third party-contracts and arrangements. We evaluated the Company’s compliance with accounting standards and we completed detailed testing to ensure we could rely on third party reports. We corroborated recorded transactions with data recorded on public blockchain networks and we independently calculated the value of bitcoin received to ensure recorded revenue amounts were reasonable. We also independently calculated the gain/loss on all exchanges of bitcoin for U.S. dollars to ensure amounts were accurately recorded in accordance with the Company’s policies and procedures. We ensured all bitcoin transactions were reasonably recorded and ensured the Company’s disclosures in their financial statements regarding such were adequate. Intangible Assets and Goodwill Impairment (Note 2 and Note 4) The Company evaluates for impairment of intangible assets by first evaluating for impairment indicators, which requires significant judgment, and then by completing a recoverability test to compare the carrying value of each asset with the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the assets, which can depend on estimates and assumptions. If the carrying amount is in excess of the undiscounted cash flows the Company calculates a fair value for the asset, which can also be based on subjectivity, estimates, and judgments, and ensures the carrying amount is not in excess of its fair value. The Company evaluates goodwill for impairment at least annually at the reporting unit level and compares the carrying amount of goodwill to its fair value. Accordingly, the Company has to use significant judgment, assumptions, and subjectivity to determine it reporting units and the fair value of their goodwill. As of December 31, 2023 the Company engaged a valuation specialist to assist with the fair value calculations. During our audit we identified potential impairment as a risk of material misstatement, as the intangible assets and goodwill values had balances and disclosures that were material to the financial statements. In order to test the Company’s intangible asset for impairment, we had to analyze each material intangible asset and use significant auditor judgment and subjectivity to review impairment indicators based on Company operations and the nature of the intangible assets, review undiscounted cash flow amounts where we noted no significant amounts that were necessary to test, and had to test fair value amounts by obtaining third party market data, which required significant audit effort. In order to test the Company’s goodwill impairment, we had to use significant auditor judgement to gain comfort in the Company’s reporting unit(s) by completing an overall analysis of the Company’s business and operations. We also had to gain comfort with the expertise and experience of the third-party valuation expert and review the techniques and valuation approach used by the expert for reasonableness. Lastly, we reviewed all inputs and/or underlying data used by the valuation expert to ensure the fair value associated with the goodwill was reasonable. Property and Equipment (Note 5) During the year ended December 31, 2023 the Company incurred significant costs related to the build out of their bitcoin mining warehouse and an audit risk was identified related to the value and recoverability of their assets. Significant audit effort was required to ensure the property and equipment was recorded properly, that depreciation expense was reasonable, and that asset values were recoverable. During our audit we had to obtain sufficient corroborating evidence regarding the timing of asset receipt and the assets existence at the reporting date. We also had to recalculate all depreciation amounts and complete a detailed impairment analysis which required auditor subjectivity. We ensured the Company’s property and equipment was reasonably stated at its recoverable value and ensured the disclosures for such were accurate. /s/ Mac Accounting Group & CPAs, LLP We have served as The OLB Group Inc.'s auditor since 2023. Midvale, Utah April 15, 2024 F- 4 The OLB Group, Inc. and Subsidiaries Consolidated Balance Sheets December 31, 2024 December 31, 2023 ASSETS Current Assets: Cash $ 27,436 $ 179,006 Accounts receivable, net 100,621 466,890 Prepaid expenses 18,075 184,913 Other receivables 599,575 403,999 Investment in equity securities — 273,662 Other current assets — 312,103 Total Current Assets 745,707 1,820,573 Other Assets: Property and equipment, net 3,254,039 5,871,751 Intangible assets, net 3,724 3,500,246 Goodwill 8,139,889 8,139,889 Operating lease right-of-use assets 140,218 — Other long-term assets 395,952 395,952 Total Other Assets 11,933,822 17,907,838 TOTAL ASSETS $ 12,679,529 $ 19,728,411 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Cash overdraft $ 31,750 $ — Accounts payable 4,216,194 3,526,689 Accrued expenses 1,151,803 1,017,708 Preferred dividend payable (related party) 543,509 418,606 Merchant portfolio purchase installment obligation 2,000,000 2,000,000 Related party payable 1,203,960 12,678 Operating lease liability – current portion 46,491 — Note payable – current portion 202,939 258,819 Total Current Liabilities 9,396,646 7,234,500 Long Term Liabilities: Notes payable, net of current portion — 149,039 Operating lease liability – net of current portion 93,869 — Total Liabilities 9,490,515 7,383,539 Commitments and contingencies (Note 10) Stockholders’ Equity: Preferred stock, $ 0.01 par value, 1,000,000 shares authorized, no shares issued and outstanding — — Series A Preferred stock, $ 0.01 par value, 10,000 shares authorized, 1,021 shares issued and outstanding at December 31, 2024 and 2023 10 10 Common stock, $ 0.0001 par value, 50,000,000 shares authorized, 2,289,930 and 1,534,408 shares issued, 2,277,313 and 1,521,791 shares outstanding at December 31, 2024 and 2023, respectively 228 152 Treasury stock, at cost, 12,617 shares at December 31, 2024 and 2023 ( 109,988 ) ( 109,988 ) Additional paid-in capital 71,098,571 68,910,370 Accumulated deficit ( 67,799,807 ) ( 56,574,896 ) Total stockholders’ equity of The OLB Group and Subsidiaries 3,189,014 12,225,648 Noncontrolling interest — 119,224 Total Stockholders’ Equity 3,189,014 12,344,872 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 12,679,529 $ 19,728,411 T he accompanying notes are an integral part of these consolidated financial statements. F- 5 The OLB Group, Inc. and Subsidiaries Consolidated Statements of Operations For the Years Ended December 31, 2024 2023 Revenue: Transaction and processing fees $ 9,684,152 $ 27,096,245 Merchant equipment rental and sales 75,575 89,532 Revenue, net - bitcoin mining 413,332 538,718 Other revenue from monthly recurring subscriptions 521,268 312,565 Digital product revenue 2,144,661 2,534,577 Total revenue 12,838,988 30,571,637 Operating expenses: Processing and servicing costs, excluding merchant portfolio amortization 10,669,238 21,181,499 Amortization expense 533,805 4,172,117 Depreciation expense 2,616,137 2,560,015 Salaries and wages 2,932,948 3,817,508 Professional fees 1,939,542 2,336,785 General and administrative expenses 2,861,300 7,078,947 Impairment expense 2,962,469 12,902,788 Total operating expenses 24,515,439 54,049,659 Loss from operations ( 11,676,451 ) ( 23,478,022 ) Other income (expense): Realized gain on sale of bitcoin 222,751 288,584 Unrealized gain on investment 274,731 23,662 Interest expense ( 45,942 ) ( 148,483 ) Other income — 40,320 Total other income 451,540 204,083 Net loss before income taxes ( 11,224,911 ) ( 23,273,939 ) Income tax expense — — Net loss ( 11,224,911 ) ( 23,273,939 ) Net loss attributed to noncontrolling interest — 93,276 Net loss attributed to The OLB Group and Subsidiaries ( 11,224,911 ) ( 23,180,663 ) Preferred dividends (related party) ( 124,903 ) ( 124,222 ) Net Loss Applicable to Common Stockholders $ ( 11,349,814 ) $ ( 23,304,885 ) Net loss per common share, basic and diluted $ ( 6.10 ) $ ( 15.33 ) Weighted average shares outstanding, basic and diluted 1,860,538 1,520,371 The accompanying notes are an integral part of these consolidated financial statements. F- 6 The OLB Group, Inc. and Subsidiaries Consolidated Statements of Changes in Stockholders’ Equity For the Years Ended December 31, 2024 and 2023 Preferred Stock Common Stock Additional Paid Treasury Accumulated Non-Controlling Shares Amount Shares Amount In Capital Stock Deficit Interest Total Balance at December 31, 2022 1,021 10 1,508,155 151 68,141,837 ( 109,988 ) ( 33,394,233 ) — 34,637,777 Common stock issued for accrued liabilities-related party — — 13,636 1 164,997 — — — 164,998 Preferred stock dividends-related party — — — — ( 124,222 ) — — — ( 124,222 ) Recognition of noncontrolling interest in acquisition — — — — — — — 212,500 212,500 Stock-based compensation — — — — 727,758 — — 727,758 Net loss — — — — — — ( 23,180,663 ) ( 93,276 ) ( 23,273,939 ) Balance at December 31, 2023 1,021 10 1,521,791 152 68,910,370 ( 109,988 ) ( 56,574,896 ) 119,224 12,344,872 Common stock issued for exercise of options — — 156,899 16 6,824 — 6,840 Common stock sold for cash — — 478,637 48 1,090,842 — 1,090,890 Common stock issued to related parties for accrued liabilities — — 117,632 12 899,988 — — — 900,000 Preferred stock dividends-related party — — — — ( 124,903 ) — — — ( 124,903 ) Stock-based compensation — — — — 406,500 — — — 406,500 Shares issued for charitable contribution 2,500 — 4,725 — — 4,725 Adjustment for 10 for 1 reverse stock split — — ( 146 ) — — — — — — Derecognition of non controlling interest — — — — ( 95,775 ) — — ( 119,224 ) ( 214,999 ) Net loss — — — — — — ( 11,224,911 ) — ( 11,224,911 ) Balance at December 31, 2024 1,021 $ 10 2,277,313 $ 228 $ 71,098,571 $ ( 109,988 ) $ ( 67,799,807 ) $ — $ 3,189,014 The accompanying notes are an integral part of these consolidated financial statements . F- 7 The OLB Group, Inc. and Subsidiaries Consolidated Statements of Cash Flows For the Years Ended December 31, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 11,224,911 ) $ ( 23,273,939 ) Adjustments to reconcile net loss to net cash provided by and used in operations: Depreciation and amortization 3,149,942 6,732,132 Impairment expense 2,962,469 12,902,788 Stock based compensation 406,500 727,758 Common stock issued for charitable contribution 4,725 — Operating lease expense, net of repayment 142 ( 3,809 ) Unrealized gain on investment ( 274,731 ) ( 23,662 ) Realized gain on sale of bitcoin ( 222,751 ) ( 288,584 ) Changes in assets and liabilities: Accounts receivable 366,269 570,473 Prepaid expenses and other current assets 507,938 1,008,645 Other long-term assets — 106,965 Accounts payable 689,505 2,729,797 Accrued expenses 1,034,597 858,358 Net cash provided by (used in) operating activities ( 2,600,306 ) 2,046,922 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property and equipment — ( 1,225,148 ) Purchase of intangible assets — ( 4,965 ) Proceeds from sale of investment 548,393 — Purchase of 80.01 % interest in Moola Cloud, LLC — ( 850,000 ) Purchase of 19.99 % interest in Moola Cloud, LLC ( 215,500 ) — Net cash used in investing activities 332,893 ( 2,080,113 ) CASH FLOWS FROM FINANCING ACTIVITIES: Cash overdraft acquired in acquisition — ( 8,050 ) Cash overdraft 31,750 — Common stock sold for cash 1,090,890 — Advances from related party 1,191,282 12,678 Proceeds from exercise of options – related party 6,840 — Repayments on note payable ( 204,919 ) ( 226,457 ) Net cash (used) provided by financing activities 2,115,843 ( 221,829 ) Net change in cash ( 151,570 ) ( 255,020 ) Cash – beginning of year 179,006 434,026 Cash – end of year $ 27,436 $ 179,006 Cash paid for: Interest $ — $ — Income taxes $ — $ — Non-cash investing and financing transactions: Common stock issued for accrued liabilities $ 900,000 $ 164,998 Preferred stock dividends $ 124,903 $ 124,222 Cancellation of operating leases $ — $ 174,090 The accompanying notes are an integral part of these consolidated financial statements. F- 8 The OLB Group, Inc. and Subsidiaries Notes to the Consolidated Financial Statements December 31, 2024 NOTE 1 – BACKGROUND Background The OLB Group, Inc. (“OLB” the “Company”) was incorporated in the State of Delaware on November 18, 2004 and provides services through its wholly-owned subsidiaries and business segments. The Company generates its revenue through two business segments its Fintech Services and Bitcoin Mining Business segments. Fintech Services: The Company provides integrated financial and transaction processing services (“Fintech Services”) to businesses throughout the United States. Through its eVance, Inc. subsidiary (“eVance”), the Company provides an integrated suite of third-party merchant payment processing services and related proprietary software enabling products that deliver credit and debit card-based internet payment processing solutions primarily to small and mid-sized merchants operating in physical “brick and mortar” business environments, on the internet and in retail settings requiring both wired and wireless mobile payment solutions. eVance operates as an independent sales organization (“ISO”) generating individual merchant processing contracts in exchange for future residual payments. As a wholesale ISO, eVance has a direct contractual relationship with the merchants and takes greater responsibility in the approval and monitoring of merchants than do retail ISOs and as a result, receives additional consideration for this service and risk. The Company’s Securus365, Inc. (“Securus365”) subsidiary operates as a retail ISO and receives residual income as commission for merchants it places with third party processors. The Company’s eVance Capital, Inc subsidiary provides lending services to merchants processing with eVance, Inc. CrowdPay.us, Inc. (“CrowdPay”) is a Crowdfunding platform used to facilitate a capital raise anywhere from $ 1,000,000 -$ 50,000,000 of various types of securities under Regulation D, Regulation Crowdfunding, Regulation A and the Securities Act of 1933. To date, the activities of this subsidiary have been nominal. OmniSoft, Inc. (“OmniSoft”) operates a software platform for small merchants. The Omnicommerce applications work on an iPad, mobile device and the web and allow customers to sell a store’s products in a physical, retail setting. To date, the activities of this subsidiary have been nominal when compared to the overall business. On May 14, 2021, the Company formed its wholly owned subsidiary, OLBit, Inc. (“OLBit”). 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 Bitcoin Business and Fintech Services business. To date, the activities of this subsidiary have been nominal. On June 15, 2023, the Company entered into a Membership Interest Purchase Agreement (the “Agreement”) with SDI Black 001, LLC (“Seller”) whereby the Company acquired 80.01 % of the membership interests of Cuentas SDI, LLC, a Florida limited liability company (the “LLC”). The LLC owns the platform of Seller and the network serving over 31,000 bodega convenience stores in and around New York and New Jersey (see Note 7). The Company also provides ecommerce development and consulting services on a project-by-project basis. Bitcoin Mining Business: On July 23, 2021, the Company formed its wholly owned subsidiary, DMINT, Inc., (“DMINT”). The purpose of DMINT is to operate its business related to Bitcoin mining (“Bitcoin Business”). On June 24, 2022 the Company formed DMINT Real Estate Holdings, Inc., a wholly-owned subsidiary of DMINT. The purpose of DMINT Real Estate Holdings, Inc is to buy and hold real estate related to DMINT. Currently, its only asset is the building and property located in Selmer, Tennessee where all of the mining computers are located. F- 9 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s accounting estimates include the collectability of receivables, useful lives of long-lived assets and recoverability of those assets, impairment in fair value of goodwill, valuation allowances for income taxes and stock-based compensation. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, eVance Inc, eVance Capital Inc, Securus365, Inc., CrowdPay.us, Inc., OmniSoft, Inc., OLBit, Inc., DMINT, Inc., and DMINT Real Estate Holdings. The Company owns 100 % of Cuentas SDI, LLC, which has been included in the consolidated financial statements. All significant intercompany transactions and balances have been eliminated. Fair Value of Financial Instruments The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP) and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Pricing inputs that are generally unobservable inputs and not corroborated by market data. The carrying amount of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid expenses, accounts payable and accrued expenses approximate their fair value because of the short maturity of those instruments. The Company’s notes payable represents the fair value of such instruments as the notes bear interest rates that are consistent with current market rates. Concentration of Credit Risk Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash and accounts receivable. The Company’s cash is deposited with major financial institutions. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insurable amount (“FDIC”). As of December 31, 2024 and 2023, 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”), or decision maker group, in deciding how to allocate resources to an individual segment and in assessing performance. Our chief operating decision–making group is composed of the Chief Executive Officer and Vice President. The Company has two operating segments as of December 31, 2024 and 2023. (see Note 17). F- 10 Stock-based Compensation We account for equity-based transactions with employees and non-employees under the provisions of FASB ASC Topic 718, “Compensation – Stock Compensation” ( “Topic 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. 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 Topic 718. Net Loss per Share Basic net loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and dilutive potentially outstanding shares of common stock during the period. The weighted average number of common shares for the years ended December 31, 2024 and 2023 does not include warrants to acquire 856,313 shares of common stock because of their anti-dilutive effect. The weighted average number of common shares for years ended December 31, 2024 and 2023, does not include 20,000 and 125,468 options, respectively, to purchase common stock because of their anti-dilutive effect. Investments in Equity Securities The Company accounts for its investments under ASC 321, “Investments – Equity Securities,” which requires that investments in equity securities be measured at fair value with changes in value recorded as unrealized gains and losses in current period operations. Bitcoin The Company obtains bitcoin through our mining activities, which is accounted for in connection with our revenue recognition policy. The bitcoin held is recorded as other assets in the Consolidated Balance Sheets and is accounted for as indefinite-lived intangible assets initially measured at cost, in accordance with ASC 350 – “Intangibles-Goodwill and Other” (“ASC 350”). The use of bitcoin is accounted for in accordance with the first in first out method of accounting. We do not amortize our bitcoin but assess the value for impairment as further discussed in our impairment policy. At December 31, 2024 and 2023, the carrying value of the Company’s bitcoin was $ 0 and $ 312,565 , respectively. As of December 31, 2023, the Company had 11.14 bitcoin on hand which had a fair value of $ 470,633 based on the price of bitcoin of approximately $ 42,265 . For the years ended December 31, 2024 and 2023, we recorded a realized gain on our bitcoin transactions of $ 222,751 and $ 288,584 , respectively. Property and Equipment Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Depreciation is calculated once the asset has been received and is ready for its intended use, using half of the monthly depreciation in the first month and half of the monthly depreciation in the last month. Cost and accumulated depreciation applicable to items replaced or retired are eliminated from the related accounts with any gain or loss on the disposition included in the statement of operations. Expenditures for repairs and maintenance are expensed as incurred. F- 11 The Company capitalizes all capital assets utilizing the following criteria: ● All land acquisitions;. ● All buildings/facilities acquisitions and new construction; ● Facility renovation and improvement projects costing more than $ 100,000 ; ● Land improvement and infrastructure projects costing more than $ 100,000 , ● Equipment costing more than $ 3,000 with a useful life beyond a single reporting period (generally one year); ● Computer equipment costing more than $ 5,000 ; and ● Construction in Progress (CIP) for capital projects with a budget in excess of $ 100,000 The estimated useful lives for all the Company’s property and equipment are as follows: Item Useful Life Computer equipment 3 years Software 10 years Office furniture 5 Years Buildings and improvements 30 years Intangible Assets The Company accounts for its intangible assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 350-30, General Intangibles Other Than Goodwill . ASC Subtopic 350-30, which requires assets to be measured based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. Under ASC Subtopic 350-30 any intangible asset with a useful life is required to be amortized over that life and the useful life is to be evaluated every reporting period to determine whether events or circumstances warrant a revision to the remaining period of amortization. If the estimate of useful life is changed the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life. Costs to renew or extend the term of an intangible assets are recognized as an expense when incurred. Included in intangible assets are merchant portfolios that are valued at fair value of merchant customers on the date of acquisition and are amortized over their estimated useful lives ( 7 years). See Note 4. Impairment of Long-Lived Assets In accordance with ASC 360-10 the Company periodically reviews the carrying value of its long-lived assets held and used at least annually or when events and circumstances warrant such a review. If significant events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable, the Company performs a test of recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows. Cash flow projections are sometimes based on a group of assets, rather than a single asset. If cash flows cannot be separately and independently identified for a single asset, the Company determines whether impairment has occurred for the group of assets for which it can identify the projected cash flows. If the carrying values are in excess of undiscounted expected future cash flows, it measures any impairment by comparing the fair value of the asset group to its carrying value. If the fair value of an asset or asset group is determined to be less than the carrying amount of the asset or asset group, impairment in the amount of the difference is recorded. F- 12 During the years ended December 31, 2024 and 2023, it was determined that the Company’s mining equipment and intangible assets were impaired per our analysis completed in accordance with ASC 360-10, and all was written down to fair value. As a result, the Company recognized impairment expense of $ 2,962,469 for the year ended December 31, 2024. For the year ended December 31, 2023, the Company recognized impairment expense of $ 12,902,788 which included a write down of $ 259,931 for mining equipment and a write down of $ 12,642,857 for intangible assets (see Note 4). Goodwill The Company accounts for business combinations under the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations , where the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. The purchase price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates. The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as goodwill. 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 350): Simplifying the Test for Goodwill Impairment , the Company performed a quantitative assessment of indefinite-lived intangibles and goodwill and determined there was no impairment at December 31, 2024 and 2023. A summary of goodwill as of December 31, 2024, is as follows: Acquisition of assets from Excel Corporation and its subsidiaries on April 9, 2018 $ 6,858,216 Acquisition of 80.01 % interest of Cuentas SDI, LLC on June 15, 2023 (see Note 7) 1,281,673 Goodwill balance as of December 31, 2024 $ 8,139,889 Accounts Receivable Accounts receivable represent contractual residual payments due from the Company’s processing partners or other customers. Residual payments are determined based on transaction fees and revenues from the credit and debit card processing activity of merchants for which the Company’s processing partners pay the Company. Based on collection experience and periodic reviews of outstanding receivables, we have recorded an allowance balance of $ 207,850 and $ 207,850 as of December 31, 2024 and 2023, respectively. This balance represents an amount related to the ongoing lawsuit with FFC. As of December 31,2024, the loan is not considered in default. 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. During the years ended December 31, 2024 and 2023 chargebacks have reduced recorded revenue amounts and no reserve for loss has been recorded as of December 31, 2024 and 2023. F- 13 Revenue Recognition The following table presents the Company’s revenue disaggregated by revenue source: For the Years Ended December 31, 2024 2023 Transaction and processing fees from wholesale contracts $ 8,279,042 $ 26,073,349 Transaction and processing fees from retail contracts 1,405,110 1,022,896 Other transaction and processing fees, revenue from monthly recurring subscriptions, and merchant equipment rental and sales 596,843 402,097 Bitcoin mining revenue 413,332 538,718 Digital product revenue 2,144,661 2,534,577 Total revenue from contracts with customers $ 12,838,988 $ 30,571,637 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; ● Identification of the performance obligations in the contract; ● Determination of the transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Recognition of revenue when or as the performance obligations are satisfied. Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Shipping and handling activities associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment activity and recognized as revenue at the point in time at which control of the goods transfers to the customer. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less. Transaction and processing fees Fees for the Company’s transaction and processing arrangements are typically billed and paid on a monthly basis. The Company receives a percentage of recurring monthly transaction related fees comprised of credit and debit card fees charged to merchants, net of association fees, otherwise known as Interchange, as well as certain service charges and convenience fees, for payment processing services, including authorization, capture, clearing, settlement and information reporting of electronic transactions. Fees are calculated on either a percentage of the dollar, volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of the transaction. These merchant services represent a single performance obligation satisfied over time and that the same measure of progress should be used to measure the Company’s progress toward complete satisfaction of the performance obligation. The Company will recognize revenue on a monthly basis as the services are transferred to the customer in short daily increments that qualify for series guidance as the best measure of the transfer of control. In wholesale contracts, the Company recognizes transaction and processing fees on a gross basis as the Company is the principal in the merchant services. The Company has concluded it is the principal because it has a direct contractual relationship with the merchant, is primarily responsible for the delivery of services to the merchants, including performing underwriting, has discretion in setting prices, and bears risk of chargebacks and other merchant losses. The Company also has the unilateral ability to accept or reject a transaction based on criteria established by the Company. As the principal, the Company records the full discount charged to the merchant as revenue and the related interchange and other processing fees within cost of revenues. In retail contracts, the Company is not responsible for merchant underwriting, has no chargeback liability and has no or limited contractual relationship with the merchant. As such, the Company records the net amount it receives from the processor, after interchange and other interchange and other processing fees, as revenue. F- 14 Merchant equipment rental and sales The Company generates revenue through the sale and rental of merchant equipment. The Company satisfies its performance obligation upon delivery of equipment to merchants and recognizes revenue at a point in time. The Company allows for customer returns which are accounted for as variable consideration. The Company estimates these amounts based on historical experience and reduces revenue recognized. The Company invoices customers upon delivery of the equipment to merchants, and payments from such customers are due upon invoicing. The Company offers hardware installment sales to customers with terms ranging from three to forty-eight months. The Company allocates a portion of the consideration received from these arrangements to a financing component when it determines that a significant financing component exists. The financing component is subsequently recognized as financing revenue separate from hardware revenue, within subscription and services-based revenue, over the terms of the arrangement with the customer. Pursuant to practical expedients afforded under ASC 606, the Company does not recognize a financing component for hardware installment sales that have a term of one year or less. Monthly recurring subscriptions The Company generates recurring revenue through monthly subscriptions for software services. This service is provided based on an agreement with the customer regarding software services. Performance obligations are promises in a contract to a customer. In the subscription model, each billing period represents a performance obligation. The transaction price is the amount of consideration the Company expects to receive in exchange for transferring goods or services. For recurring revenue, this is the subscription fee. The Company allocates to the performance obligated based on the selling price for the subscription. If the criteria for recognizing revenue over time are met, revenue is recognized over the period of performance. For subscription and recurring fee, this means recognizing revenue each billing period. Cryptocurrency mining: The Company entered into contracts with digital asset mining pool operators to provide the service of performing hash computations for the mining pool operator. The contracts are continuously renewable and are terminable at any time by either party and the Company ’ s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of Bitcoin. 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. Hashrate is the measure of the computational power per second used when mining. Providing computing power in Bitcoin transaction verification services is an output of the Company’s ordinary activities. The provision of computing power is the only performance obligation in the Company’s contracts with third party pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the Company successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions. The Company earns Bitcoin during the time period 00:00:00 UTC and 23:59:59 UTC (“24-hour Period”) unless terminated in accordance with the terms set forth by the terms of service. In exchange for performing hash computations for the mining pool. The Company performs hash computations for one mining pool operator, Foundry USA. Foundry USA operates its pool on the Full Pay Per Share (FPPS) payout method. FPPS is a variant of the Pay Per Share (PPS) method, where miners receive a fixed payout for each valid share submitted, regardless of whether the pool finds a block. The fair value of the Bitcoin award received is determined using the intraday average quoted price of the Bitcoin over the 24-Hour Period. The Company ’ s Bitcoin earned are actively traded on the major trading platforms. The Company considers Coinbase to be its primary market. The consideration the Company will receive, comprised of block rewards, transaction fees less mining pool operator fees are aggregated, over the 24-Hour Period, in a sub-balance account held by the mining pool operator, which is finalized one hour later at 1AM UTC. The sub-balance account is then withdrawn to the Company ’ s whitelisted wallet address, once a day, between the hours of 9am to 5pm UTC time (the “ Settlement ” ). The rate of payment occurs once per day, as long as the minimum payout threshold of 0.01 bitcoin has accumulated in the sub- account balance, in accordance with the mining pool operator ’ s terms of service. At the time of Settlement, the company values the amount of Bitcoin earned using the average price of Bitcoin, per Coinbase, over the 24-hour Period and records this amount as revenue. By utilizing the average daily price of bitcoin over the time earned, the Company eliminates any differences that may arise due to the volatility in trading price between bitcoin and fiat currency during the period where the Company establishes and completes the contract. Pursuant to ASC 606-10-55-42, the Company assessed if the customer ’ s option to renew represented a material right that represents a separate performance obligation and noted the renewal is not a material right. The definition of a material right is a promise in a contract to provide goods or services to a customer at a price that is significantly lower than the stand-alone selling price of the good or service. The mining pool operator does not provide any discounts and as such there is no economic benefit to the customer and as such a separate performance obligation does not exist under 606-10-55-42. In addition, there are no options for renewal that are separately identifiable from other promises in the contract, such as an ability to extend the contract at a reduced price. The performance obligation of the Bitcoin miner under the mining contracts with Foundry Pool USA involves the service of performing hash computations to facilitate the verification of digital asset transactions. The Company’s miners contribute computing power (i.e.. hashrate) that perform hash calculations to the mining pool operator, engaging in the process of validating and securing transactions through the generation of Bitcoin hashes. The mining pool then utilizes a specific mining algorithm (e.g. SHA-256) to submit shares (proof of work) to the mining pool’s server as they contribute to solving the Bitcoin puzzles required to mine a block. The Company reviews and analyzes its individual pool performance using a dashboard provided by Foundry Pool USA that includes real-time statistics on hashrate, shares submitted and earnings. The service of performing hash computations in digital asset transaction verification services is an output of the Company’s ordinary activities. The provision of providing these services is the only performance obligation in the Company’s contracts with mining pool operators. The Company performs hash computations for one mining pool operator, Foundry USA. Foundry USA operates its pool on the Full Pay Per Share (FPPS) payout method. FPPS is a variant of the Pay Per Share (PPS) method, where miners receive a fixed payout for each valid share submitted, regardless of whether the pool finds a block. F- 15 Regardless of the pool’s success, the Company will receive consistent rewards based on the number of valid shares it contributes. The transaction consideration the Company receives is non-cash consideration, in the form of bitcoin. The Company measures the bitcoin at fair value on the date earned using the average price (calculated by averaging the daily open price and the daily close price) quoted by its Principal Market at the date the Company completed the service of performing hash computations for the mining pool operator. There are no deferred revenues or other liability obligations recorded by the Company since there are no payments in advance of performance. At the end of each 24 hour period (00:00:00 UTC and 23:59:59 UTC), there are no remaining performance obligations. By utilizing the average daily price of bitcoin on the date earned, the Company eliminates any differences that may arise due to the volatility in trading price between bitcoin and fiat currency during the period where the Company establishes and completes the contract. The consideration is all variable. There is no significant financing component in these transactions. If authoritative guidance is enacted by the Financial Accounting Standards Board (“FASB”), the Company may be required to change its policies, which could affect the Company’s financial position and results from operations. Digital product revenue The Company generates revenue through electronic distribution and sale of digital products that range from prepaid wireless SIM activation, international mobile recharge services and international long distance phone service. The Company generally obtains payment upfront and its performance obligation is to provide products and/or calling services. When products are provided at the point of sale, revenue is recognized immediately and at the time of payment. When a customer purchases a prepaid telecom product, such as a prepaid mobile phone plan, the revenue is initially recorded as a customer deposit and revenue is recognized over the relevant performance period as customers utilize the prepaid telecom services. As of December 31, 2024 and 2023, customer deposits were $0 . Leases The Company determines whether an arrangement contains a lease at the inception of the arrangement. If a lease is determined to exist, the term of such lease is assessed based on the date on which the underlying asset is made available for the Company’s use by the lessor. The Company’s assessment of the lease term reflects the non-cancelable term of the lease, inclusive of any rent-free periods and/or periods covered by early-termination options which the Company is reasonably certain of not exercising, as well as periods covered by renewal options which the Company is reasonably certain of exercising. The Company also determines lease classification as either operating or finance at lease commencement, which governs the pattern of expense recognition and the presentation reflected in the consolidated statements of operations over the lease term. For leases with a term exceeding 12 months, an operating lease liability is recorded on the Company’s consolidated balance sheet at lease commencement reflecting the present value of its fixed minimum payment obligations over the lease term. A corresponding operating lease right-of-use asset equal to the initial lease liability is also recorded, adjusted for any prepaid rent and/or initial direct costs incurred in connection with execution of the lease and reduced by any lease incentives received. For purposes of measuring the present value of its fixed payment obligations for a given lease, the Company uses its incremental borrowing rate, determined based on information available at lease commencement, as rates implicit in its leasing arrangements are typically not readily determinable. The Company’s incremental borrowing rate reflects the rate it would pay to borrow on a secured basis and incorporates the term and economic environment of the associated lease. For the Company’s operating leases, fixed lease payments are recognized as lease expense on a straight-line basis over the lease term. For leases with a term of 12 months or less, lease payments are recognized as paid and are not recognized on the Company’s consolidated balance sheet as an accounting policy election. Leases qualifying for the short-term lease exception were insignificant. Variable lease costs are recognized as incurred and primarily consist of common area maintenance and utility charges not included in the measurement of right of use assets and operating lease liabilities. Income Taxes The Company accounts for income taxes under the asset and liability method, in which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. A valuation allowance is required to the extent any deferred tax assets may not be realizable. F- 16 Recent Accounting Pronouncements In December 2023, the FASB issued ASU No. 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets. The amendments in ASU No. 2023-08 are intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income. The amendments also improve the information provided to investors about an entity’s crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period. The amendments are effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. ASU No. 2023-08 requires a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of equity or net assets) as of the beginning of the annual reporting period in which an entity adopts the amendments. The Company has not yet adopted ASU No. 2023-08 and is currently evaluating the impact that the adoption will have on the Company’s financial statement presentation and disclosures. NOTE 3 – LIQUIDITY AND CAPITAL RESOURCES 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, 2024, the Company had cash of approximately $ 27,000 , accounts receivable of approximately $ 101,000 , prepaid expenses of approximately $ 18,000 and other receivables at $ 599,600 . At December 31, 2024 the Company has accounts payable and accrued expenses of approximately $ 5,912,000 . To date, the Company has generated cash flows from issuances of equity and indebtedness and during the year ended December 31, 2024 reported net cash used by operating activities in excess of approximately $ 2,600,000 . On February 16, 2024, The OLB Group, Inc. (the “Company”) entered into an Equity Distribution Agreement (the “Agreement”) with Maxim Group LLC (“Maxim”) to create an at-the-market equity program. 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 has 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. The Shares will be issued pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-255152) filed with the Securities and Exchange Commission that was declared effective on May 3, 2021. On February 20, 2024, the Company filed a prospectus supplement registering up to $ 3,900,000 of Shares relating to the ATM Offering with the Securities and Exchange Commission. In addition, the Company is in the process of spinning off DMINT into a stand-alone entity. It is expected that the spin-off will occur during the next twelve months. As a result, the capital required to operate the Bitcoin Mining Segment will no longer be incurred by the Company. Further, DMINT, as a stand-alone entity, will look to raise capital following the spin-off through either an issuance of DMINT equity or loans against the DMINT assets, which include the property in Selmer, Tennessee and the Bitcoin mining computers. 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 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. 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. 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 not continue as a going concern. NOTE 4 – INTANGIBLE ASSETS Intangible assets consist of the following: December 31, 2024 December 31, 2023 Merchant portfolios $ 2,409,965 $ 2,409,965 Less accumulated amortization ( 2,409,965 ) ( 2,322,182 ) Net residual portfolios $ — $ 87,783 Trade name $ 2,500,000 $ 2,500,000 Less accumulated amortization ( 2,500,000 ) ( 2,500,000 ) Net trade name $ — $ — Exclusive agreement to purchase natural gas $ 4,499,952 $ 4,499,952 Less accumulated amortization ( 4,499,952 ) ( 1,087,489 ) Net mineral rights $ — $ 3,412,463 Domain name $ 4,965 $ — Less accumulated amortization ( 1,241 ) — Net mineral rights $ 3,724 $ — Total intangible assets, net $ 3,724 $ 3,500,246 F- 17 Due to the ongoing litigation with FFS relating to a breach of contract in connection with the Acquired Merchant Portfolio (see Note 15), the Company has written off the asset and recognized a $ 12,642,857 loss on impairment for the year ended December 31, 2023. During the year ended December 31, 2024, the Company impaired its agreement to purchase natural gas and recognized a $ 2,962,469 loss on impairment for the year ended December 31, 2024. Amortization expense for the years ended December 31, 2024 and 2023 was $ 533,805 and $ 4,172,117 , respectively. NOTE 5 – PROPERTY AND EQUIPMENT Property and equipment consisted of the following: December 31, 2024 December 31, 2023 Office equipment $ 186,600 $ 186,600 Computer software 141,337 141,337 Bitcoin mining equipment 8,425,000 8,425,000 Building 409,296 409,296 Construction in process 2,383,396 2,383,396 Total 11,545,629 11,545,629 Less accumulated depreciation ( 8,291,590 ) ( 5,673,878 ) Property and Equipment, net $ 3,254,039 $ 5,871,751 During the year ended December 31, 2023 the Company wrote off $ 524,965 worth of assets with a net book value of zero due to the assets no longer being in use and wrote off bitcoin mining equipment no longer in use, recognizing a loss on impairment of $ 259,931 . Depreciation expense for the years ended December 31, 2024 and 2023 was $ 2,616,137 and $ 2,560,015 , respectively. NOTE 6 – INVESTMENT IN EQUITY SECURITIES The Company owned 165.27 units ( 1.11 %) of Node Capital Token Opportunity Fund LP (the “Fund”) for which it paid an aggregate of $ 250,000 in August 2021. During the years ended December 31, 2024 and 2023, the Company recognized a realized gain of $ 274,731 and $ 23,662 , respectively. During the year ended December 31, 2024, the Company redeemed the Fund and received proceeds of $ 548,393 . As of December 31, 2024 and 2023, the investment in equity securities was $0 and $ 273,662 , respectively. NOTE 7 – BUSINESS COMBINATIONS On June 15, 2023, the Company entered into a Membership Interest Purchase Agreement (the “Agreement”) with SDI Black 001, LLC (“Seller”) whereby it acquired 80.01 % of the membership interests of Cuentas SDI, LLC, a Florida limited liability company (the “LLC”) for a purchase price of $ 850,000 . The Company accounted for the transaction as a business combination under ASC 805 and as a result, allocated the fair value of the book value of identifiable assets acquired and liabilities assumed as of the acquisition date as outlined in the table below. The consolidated income statement for the year ended December 31, 2023, includes $ 2,534,577 of revenue and $ 3,001,190 of expenses of Cuentas SDI, LLC from the date of acquisition (June 15, 2023) through December 31, 2023 for a net loss of $ 466,613 . The excess of the purchase price over the estimated fair values of the underlying identifiable assets acquired, liabilities assumed, and non-controlling interest was allocated to goodwill. The provisional estimated fair value of the noncontrolling interest was based on the price the Company paid for their 80.01 % of their controlling interest. The goodwill represents expected synergies from the combined operations and the acquired base of current and prior merchants to which we hope to sell our merchant services. F- 18 The allocation of the purchase price and the estimated fair market values of the assets acquired, liabilities assumed, and noncontrolling interest are shown below: Consideration Consideration issued $ 850,000 Identified assets, liabilities, and noncontrolling interest Property and equipment, net 141,337 Cash overdraft ( 8,050 ) Customer deposits ( 45,806 ) Accounts payable ( 283,626 ) Accrued expenses ( 23,028 ) Noncontrolling interest ( 212,500 ) Total identified assets, liabilities, and noncontrolling interest ( 431,673 ) Excess purchase price allocated to goodwill $ 1,281,673 Had the business combination taken place as of January 1, 2023 the Company would have recorded $ 4,541,090 in revenues and $ 138,459 in losses for the year ended December 31, 2023. On May 20, 2024, the Company entered into a Membership Interest Purchase Agreement (the “Agreement”) dated as of May 20, 2024 with the minority member of the LLC 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 SDI. NOTE 8 – NOTE PAYABLE 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. During 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 $ 24,838 until the loan is repaid in full or it matures on March 1, 2025. During the years ended December 31, 2024 and 2023, the Company made repayments of $ 204,919 and $ 226,547 , respectively. As of December 31, 2024 and 2023, the note payable balance was $ 202,939 and $ 407,858 , respectively. The Company is currently in negotiations with VFS to extend the term of the loan. NOTE 9 – STOCK OPTIONS On January 3, 2023, the Company granted stock options to purchase 200,000 pre-split ( 20,000 post-split) shares of common stock pursuant to the terms of the Company’s employment agreement with Mr. Yakov. The options have a one year vesting term and an exercise price of $ 0.01 per share pre-split ($ 0.10 per share post-split). The aggregate fair value of the options totaled $ 541,999 based on the Black Scholes Merton pricing model using the following estimates: exercise price of $ 0.01 , 1.63 % risk free rate, 295 % volatility and expected life of the options of 10 years . The fair value of the options was recognized over the vesting period with a credit to additional paid in capital. During the year ended December 31, 2023, the option granted to Mr. Yakov on January 1, 2018 to purchase 6,667 shares of common stock expired; therefore, the Company has shown those options as expired as of December 31, 2023. On January 3, 2024, the Company granted stock options to purchase 200,000 pre-split ( 20,000 post-split) shares of common stock pursuant to the terms of the Company’s employment agreement with Mr. Yakov. 50 % of the options vested immediately, 25 % of the options vest on the one-year anniversary of the grant, and 25 % of the options vest on the two-year anniversary of the grant. The options have an exercise price of $ 0.01 per share pre-split ($ 0.10 per share post-split). The aggregate fair value of the options totaled $ 541,999 based on the Black Scholes Merton pricing model using the following estimates: exercise price of $ 0.01 (pre-split pricing), 1.63 % risk free rate, 295 % volatility and expected life of the options of 10 years. The fair value of the options will be recognized over the vesting period with credits to additional paid in capital. On January 24, 2024, Mr. Yakov exercised options to purchase a total of 1,187,919 pre-split shares of common stock ( 118,792 post-split) for $ 4,079 (see Note 12 and Note 14). F- 19 On January 24, 2024, Mr. Smith exercised options to purchase a total of 381,069 pre-split shares of common stock ( 38,107 post-split) for $ 2,761 (see Note 12 and Note 14). A summary of the status of the Company’s outstanding stock options and changes is presented below: Stock Options Options Weighted Average Exercise Price Aggregate Intrinsic Value Options outstanding January 1, 2023 137,566 $ 0.04 Granted 20,000 $ 0.10 Exercised — $ — Expired ( 667 ) $ 0.01 Options outstanding December 31, 2023 156,899 $ 0.04 $ 1,656,270 Granted 20,000 $ 0.10 Exercised ( 156,899 ) $ 0.04 Expired — $ — Options outstanding December 31, 2024 20,000 $ 0.10 $ 39,400 Shares exercisable at December 31 2024 10,000 $ 0.10 $ 19,700 During the years ended December 31, 2024 and 2023 the Company recognized $ 406,500 and $ 727,758 , respectively, in stock-based compensation related to the above-mentioned options. As of December 31, 2024 there was $ 135,500 of unrecognized expense for the above-mentioned options is expected to extend for 1.26 years and the weighted average contractual term of the options outstanding and of the option exercisable were 9.01 years. NOTE 10 – WARRANTS A summary of the status of the Company’s outstanding warrants and changes during the periods is presented below: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contract Term Outstanding, December 31, 2022 856,313 $ 68.33 3.00 Underwriter Warrant Exercised — $ — Outstanding, December 31, 2023 856,313 $ 68.33 2.60 Warrants Exercised — $ — Outstanding, December 31, 2024 856,313 $ 68.33 1.49 NOTE 11 – OPERATING LEASES On June 24, 2020, eVance, Inc. (“eVance”) entered into a Lease Agreement (the “Lease”) with Pergament Lodi, LLC (the “Lessor”) relating to approximately 4,277 square feet of property located at 960 Northpoint Parkway, Alpharetta, Georgia, Suite 400. The term of the Lease was for thirty-nine ( 39 ) months commencing September 1, 2020. The monthly base rent was $ 8,019 for the first twelve (12) months increasing thereafter to $ 8,768 . The total rent for the entire lease term was $ 323 ,812and $ 8,768 is payable as a security deposit. The first three months of rent were abated as eVance was not in default of any portion of the Lease. The lease has been extended on a month-to-month basis with a base rent of $ 8,554 per month. On January 11, 2022, DMINT entered into two leases (the “Leases”) in Bradford, Pennsylvania relating to a combined 10,000 square feet of property located at the Bradford Regional Airport Authority multi-tenant building in Lafayette Township. The Leases were 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, was $ 1,667 per month. The monthly base rent for “Cell 4”, comprising 6,000 square feet, was $ 2,500 per month. The total rent for the entire lease term of the Leases was $ 250,000 and $ 8,768 was payable as a security deposit. F- 20 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 was the final day DMINT occupied the property and all operations were moved to the Selmer, Tennessee building owned by the Company. On November 13, 2024, eVance, Inc. (“eVance”) entered into a Lease Agreement (the “Lease”) with Royal Centre Holdings LLC (the “Lessor”) relating to approximately 1,740 square feet of property located at 11475 Great Oaks Way, Alpharetta, Georgia. The term of the Lease is for thirty-nine ( 39 ) months commencing December 1, 2024. The monthly base rent was $ 4,023.75 for the first twelve (12) months increasing each year thereafter. The total rent for the entire lease term is $ 162,435 and $ 4,397 is payable as a security deposit. Lease expense for the years ended December 31, 2024 and 2023, was $ 147,575 and $ 212,448 , respectively. The Company has multiple short term rental arrangements that are not captured under ASC 842. Those payments are expensed as incurred and included in the total lease expense for each year. Balance Sheet Classification December 31, 2024 Asset Operating lease asset Right of use asset $ 140,218 Total lease asset $ 140,218 Liability Operating lease liability – current portion Current operating lease liability $ 46,491 Operating lease liability – noncurrent portion Long-term operating lease liability 93,869 Total lease liability $ 140,360 Lease obligations at December 31, 2024 consisted of the following: For the year ended December 31: 2025 $ 48,406 2026 49,858 2027 51,354 2028 8,791 Total payments $ 158,409 Amount representing interest $ ( 18,049 ) Lease obligation, net 140,360 Less current portion ( 46,491 ) Lease obligation – long term $ 93,869 NOTE 12 – STOCKHOLDERS’ EQUITY On January 16, 2024, the Company issued 39,211 shares of common stock to Mr. Smith. The shares were issued for bonus compensation of $ 300,000 that was accrued as of December 31, 2023 (see Note 14). On January 16, 2024, the Company issued 78,421 shares of common stock to Mr. Yakov. The shares were issued for bonus compensation of $ 600,000 that was accrued as of December 31, 2023 (see Note 14). On January 24, 2024, Mr. Yakov exercised options to purchase a total of 1,187,919 pre-split shares of common stock ( 118,792 post-split) for $ 4,079 (see Note 9 and Note 14). On January 24, 2024, Mr. Smith exercised options to purchase a total of 381,069 pre-split shares of common stock ( 38,107 post-split) for $ 2,761 (see Note 9 and Note 14). During the year ended December 31, 2024, the Company sold 478,637 shares of common stock from its ATM Offering, for total proceeds of $ 1,090,890 . F- 21 During the year ended December 31, 2024, the Company issued 2,500 shares of common stock as a charitable contribution. The shares were valued at $ 1.89 , the closing price on the date of grant, for total non-cash expense of $ 4,725 . During the year ended December 31, 2024, there was an increase to additional paid in capital for stock option expense of $ 406,500 . During the year ended December 31, 2024, there was a decrease to additional paid in capital for Series A preferred stock dividend expense of $ 124,903 . On April 26, 2024, the Company filed with the Delaware Secretary of State 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 were 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 issued cash in lieu of any fractional shares that such stockholder would have received as a result of the Reverse Stock Split. Following the Reverse Stock Split, the number of shares of Common Stock outstanding was reduced from 18,103,462 shares to 1,810,200 shares after taking into account an adjustment of 146 common shares due to the fact that no fractional shares were issued. The 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. All shares reported in these financial statements have been retroactively restated to reflect the Reverse Stock Split as though it had occurred as of January 1, 2023. Refer to Note 14 for common stock issued to related parties. NOTE 13 – PREFERRED STOCK 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. The Certificate of Designations will provide that the Company may issue up to 10,000 shares of Series A Preferred Stock at a stated value (the “Stated Value”) of $ 1,000 per share. As of December 31, 2024 and 2023 there were 1,021 shares of Series A Preferred Stock issued and outstanding. Holders of Series A Preferred Stock are entitled to the following rights and preferences. Dividends The Series A Preferred Stockholders are entitled to receive cash dividends at a rate per share (as a percentage of the Stated Value per share) of 12 % per annum. Dividends accrue quarterly. Dividends are to be paid to the holders from funds legally available for payment and as approved for payment by the Board of Directors of the Company. Conversion The Series A Preferred Stockholders may convert, at their option, on or after the date on which the Term Loan is repaid in full, each share of Series A Preferred Stock (along with accrued but unpaid dividends thereon) into such number of shares of common stock as determined by dividing the Stated Value by the conversion price. The conversion price for the Series A Preferred Stock will be equal to the offering price per Unit in this offering and will be subject to adjustment for splits and the like. The holders of Series A Preferred Stock will only be permitted to convert their shares of Series A Preferred Stock into shares of common stock at such time as the Term Loan has been repaid in full and there are no further outstanding obligations regarding such indebtedness. F- 22 Voting 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. Liquidation Preference Each share of Series A Preferred Stock will have a liquidation preference equal to the Stated Value plus any accrued but unpaid dividends thereon. In the event of a liquidation, dissolution or winding up of the Company (which includes any merger, reorganization, sale of assets in which control of the Company is transferred or event which results in all or substantially all of the Company’s assets being transferred), the holders of Series A Preferred Stock shall be entitled to receive out of the assets of the Company, before any payment is made to the holders of the Company’s common stock and either in preference to or pari pasu with the holders of any other series of preferred stock that may be issued in the future, a per share amount equal to the liquidation preference. NOTE 14 – RELATED PARTY TRANSACTIONS As of December 31, 2022, the Company was obligated to issue shares worth of $ 165,000 to Directors for their service and a provision for this compensation was accrued in the balance sheet as of December 31, 2022. During the year ended December 31, 2023, the Company issued 41,322 shares of common stock to Alina Dulimof and Amir Sternhell, Directors, and issued 53,719 shares of common stock to Ehud Ernst, Director, to extinguish the $ 165,000 liability. The shares were valued at $ 1.21 , the closing stock price on the date of grant. On January 24, 2024, Mr. Yakov exercised options to purchase a total of 1,187,919 pre-split shares of common stock ( 118,792 post-split) for $ 4,079 . On January 24, 2024, Mr. Smith exercised options to purchase a total of 381,069 pre-split shares of common stock ( 38,107 post-split) for $ 2,761 . On February 14, 2023, a shareholder reported to the Company that they had incurred short swing profits of $ 114,654 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, and the Company recorded other income in the consolidated statement of operations. During December 2024 and 2023, Mr. Yakov made payments on behalf of the Company in the amount of $ 1,191,282 and $ 12,678 , respectively. The amount is non-interest bearing and due on demand. During the years ended December 31, 2024 and 2023, the Company accrued $ 124,903 and $ 124,222 , respectively, for dividends on the Series A preferred stock held by Mr. Yakov. As of December 31, 2024 and 2023, total accrued dividends on the Series A preferred stock due to Mr. Yakov is $ 543,509 and $ 418,606 , respectively. F- 23 On April 8, 2024, the Company entered into Amendment No. 1 (the “Amendment”) to the Employment Agreement with Mr. Yakov (the “Yakov Agreement”). The Amendment corrected a ministerial error in the terms relating to the exercise price of stock options awarded and automobile allowance for Mr. Yakov. The Amendment affirmed that the exercise price of stock options issued under the Agreement (the “Stock Options”) shall have a per share exercise price equal to One Cent ($ 0.01 ) and expire ten years after the date of grant. Each Stock Option granted shall become exercisable as follows: 50 % upon the grant date, then 25 % upon each of the second and third anniversary of the date on which it is granted. In addition, the notices provision of the Yakov Agreement was amended to the reflect the current business address of the Company. 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 August 12, 2025 . 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. Refer to Note 9 for options to purchase shares of common stock issued to related parties. NOTE 15 – COMMITMENTS AND CONTINGENCIES In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements. On November 24, 2021, the Company entered into an Asset Purchase Agreement (the “Agreement”) dated as of November 15, 2021, with FFS Data Corporation (“FFS”) whereby the Company 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. However, the Company is engaged in ongoing litigation with FFS in the Supreme Court of the State of New York, New York County relating to the Acquired Merchant Portfolio wherein: (i) FFS alleges the Company breached the contract by failing to pay the balance of the purchase price; and (ii) the Company seeks to recover the purchase price along with damages arising from FFS’ breach of representations and warranties and other misrepresentations about the Acquired Merchant Portfolio which ultimately resulted in the termination of the bank processing agreement by Clear Fork Bank (the “Bank”). In addition, the Company has filed a lawsuit in the District Court of the 42 nd Judicial District, Taylor County, Texas against the Bank, Timothy Cooper, Daniel Neff, Anthony Sandoval, Lawrence Kentz, Slone Balliew, Olan Beard and Ricky Beard seeking damages the Company suffered as a result of it having to cease processing transactions for the merchants underlying the Acquired Merchant Portfolio. More specifically, the Company has asserted the following causes of action: (i) Negligent Supervision against the Bank; (ii) Fraud against all Defendants; (iii) Breach of Fiduciary Duty against the Bank; (iv) Negligence against all Defendants; (v) Common Law Indemnification against the Bank; (vi) Negligent Misrepresentation against all Defendants; and (vii) Vicarious Liability against all Defendants. 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. The actions are currently in discovery and trial dates have not been set. 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. F- 24 NOTE 16 – 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. Net deferred tax assets consist of the following components as of December 31: 2024 2023 Deferred Tax Assets: NOL Carryover $ 9,602,900 $ 7,624,402 Allowance for Doubtful Accounts 56,100 56,120 Depreciation and amortization 4,135,700 3,193,891 ) Less valuation allowance ( 13,794,700 ) ( 10,874,413 ) Net deferred tax assets $ — $ — The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pre-tax income from continuing operations for the period ended December 31, due to the following: 2024 2023 Book loss $ ( 2,357,000 ) $ ( 4,868,000 ) State taxes ( 674,000 ) ( 1,391,000 ) Meals and entertainment 900 1,300 Stock based compensation 109,800 196,495 Non deductible expenses -legal fees — — NOLs expired — 253,646 Other adjustments — ( 70,584 ) Valuation allowance 2,920,300 5,878,143 $ — $ — At December 31, 2024, the Company had operating loss carry forwards of approximately $ 35,600,000 , $ 2,600,000 of which expire from 2024 – 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 17 – SEGMENTS The Company applies ASC 280, Segment Reporting , in determining its reportable segments. The Company has two reportable segments: Bitcoin Mining and Fintech Services. The guidance requires that segment disclosures present the measure(s) used by the Chief Operating Decision Maker (“CODM”) to decide how to allocate resources and for purposes of assessing such segments’ performance. The Company’s CODM is comprised of several members of its executive management team who use revenue and expenses of our two reporting segments to assess the performance of the business of our reportable operating segments. F- 25 The following tables detail revenue, operating expenses, and assets, liabilities and equity for the Company’s reportable segments for the year ended December 31, 2023. Fintech Segment Bitcoin Mining Segment Consolidated Total ASSETS Current Assets: Cash $ 178,361 $ 645 $ 179,006 Accounts receivable, net 466,890 — 466,890 Prepaid expenses 86,075 98,838 184,913 Other receivables 5,016 398,983 403,999 Investment in equity securities — 273,662 273,662 Other current assets — 312,103 312,103 Total Current Assets 736,342 1,084,231 1,820,573 Other Assets: Property and equipment, net 74,894 5,796,857 5,871,751 Intangible assets, net 87,782 3,412,464 3,500,246 Goodwill 8,139,889 — 8,139,889 Other long-term assets 395,952 — 395,952 Total Other Assets 8,698,517 9,209,321 17,907,838 TOTAL ASSETS $ 9,434,859 $ 10,293,552 $ 19,728,411 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ 3,021,422 $ 505,267 $ 3,526,689 Accrued expenses 1,017,708 — 1,017,708 Preferred dividend payable (related party) 418,606 — 418,606 Merchant portfolio purchase installment obligation 2,000,000 — 2,000,000 Related party payable 12,678 — 12,678 Note payable – current portion 258,819 — 258,819 Due to/from intercompany ( 22,278,243 ) 22,278,243 — Total Current Liabilities ( 15,549,010 ) 22,783,510 7,234,500 Long Term Liabilities: Notes payable, net of current portion 149,039 — 149,039 Operating lease liability – net of current portion — — — Total Liabilities ( 15,399,971 ) 22,783,510 7,383,539 Stockholders’ Equity: Series A Preferred stock 10 — 10 Common stock 152 — 152 Treasury stock ( 109,988 ) — ( 109,988 ) Additional paid-in capital 68,910,370 — 68,910,370 Accumulated deficit ( 44,084,940 ) ( 12,489,956 ) ( 56,574,896 ) Total stockholders’ equity 24,715,604 ( 12,489,956 ) 12,225,648 Noncontrolling interest 119,224 — 119,224 Total Stockholders’ Equity 24,834,828 ( 12,489,956 ) 12,344,872 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 9,434,857 $ 10,293,554 $ 19,728,411 F- 26 Fintech Segment Bitcoin Mining Segment Consolidated Total Revenue: Transaction and processing fees $ 27,096,245 $ — $ 27,096,245 Merchant equipment rental and sales 89,532 — 89,532 Revenue, net - bitcoin mining — 538,718 538,718 Other revenue from monthly recurring subscriptions 312,565 — 312,565 Digital product revenue 2,534,577 — 2,534,577 Total revenue 30,032,919 538,718 30,571,637 Operating expenses: Processing and servicing costs, excluding merchant portfolio amortization 21,181,499 — 21,181,499 Amortization expense 3,722,122 449,995 4,172,117 Depreciation expense 61,602 2,498,413 2,560,015 Salaries and wages 2,759,181 1,058,327 3,817,508 Professional fees 2,167,852 168,933 2,336,785 General and administrative expenses 4,965,686 2,113,261 7,078,947 Impairment expense 12,642,857 259,931 12,902,788 Total operating expenses 47,500,799 6,548,860 54,049,659 Loss from operations ( 17,467,880 ) ( 6,010,142 ) ( 23,478,022 ) Other income (expense): Realized gain on sale of bitcoin — 288,584 288,584 Unrealized gain on investment 23,662 — 23,662 Interest expense ( 148,483 ) — ( 148,483 ) Other income 40,320 — 40,320 Total other income ( 84,501 ) 288,584 204,083 Net loss ( 17,552,381 ) ( 5,721,558 ) ( 23,273,939 ) Net loss attributed to noncontrolling interest 93,276 — 93,276 Net loss attributed to The OLB Group and Subsidiaries ( 17,459,105 ) ( 5,721,558 ) ( 23,180,663 ) Preferred dividends (related party) ( 124,222 ) — ( 124,222 ) Net Loss Applicable to Common Stockholders’ $ ( 17,583,327 ) $ ( 5,721,558 ) $ ( 23,304,885 ) F- 27 The following tables detail revenue, operating expenses, and assets for the Company’s reportable segments for the year ended December 31, 2024. Fintech Segment Bitcoin Mining Segment Consolidated Total ASSETS Current Assets: Cash $ 27,125 $ 311 $ 27,436 Accounts receivable, net 100,621 — 100,621 Prepaid expenses 18,075 — 18,075 Other receivables 200,592 398,983 599,575 Total Current Assets 346,413 399,294 745,707 Other Assets: Property and equipment, net — 3,254,039 3,254,039 Intangible assets, net 3,724 — 3,724 Goodwill 8,139,889 — 8,139,889 Operating lease right-of-use assets 140,218 140,218 Other long-term assets 395,952 — 395,952 Total Other Assets 8,679,783 3,254,039 11,933,822 TOTAL ASSETS $ 9,026,196 $ 3,653,333 $ 12,679,529 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Cash overdraft $ 31,750 $ — $ 31,750 Accounts payable 3,666,838 549,356 4,216,194 Accrued expenses 1,080,863 70,940 1,151,803 Preferred dividend payable (related party) 543,509 — 543,509 Merchant portfolio purchase installment obligation 2,000,000 — 2,000,000 Related party payable 1,171,960 32,000 1,203,960 Operating lease liability – current portion 46,491 — 46,491 Note payable – current portion 202,939 — 202,939 Due to/from intercompany ( 22,629,401 ) 22,629,401 — Total Current Liabilities ( 13,885,051 ) 23,281,697 9,396,646 Long Term Liabilities: Operating lease liability – net of current portion 93,869 — 93,869 Total Liabilities ( 13,791,182 ) 23,281,697 9,490,515 Stockholders’ Equity: Series A Preferred stock 10 — 10 Common stock 228 — 228 Treasury stock ( 109,988 ) — ( 109,988 ) Additional paid-in capital 71,098,571 — 71,098,571 Accumulated deficit ( 48,171,443 ) ( 19,628,364 ) ( 67,799,807 ) Total stockholders’ equity 22,817,378 ( 19,628,364 ) 3,189,014 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 9,026,196 $ 3,653,333 $ 12,679,529 F- 28 Fintech Segment Bitcoin Mining Segment Consolidated Total Revenue: Transaction and processing fees $ 9,684,152 $ — $ 9,684,152 Merchant equipment rental and sales 75,575 — 75,575 Revenue, net - bitcoin mining 413,332 413,332 Other revenue from monthly recurring subscriptions 521,268 — 521,268 Digital product revenue 2,144,661 — 2,144,661 Total revenue 12,425,656 413,332 12,838,988 Operating expenses: Processing and servicing costs, excluding merchant portfolio amortization 10,669,238 — 10,669,238 Amortization expense 83,810 449,995 533,805 Depreciation expense 73,319 2,542,818 2,616,137 Salaries and wages 1,932,528 1,000,420 2,932,948 Professional fees 1,601,566 337,976 1,939,542 General and administrative expenses 2,098,120 763,180 2,861,300 Impairment expense — 2,962,469 2,962,469 Total operating expenses 16,458,581 8,056,858 24,515,439 Loss from operations ( 4,032,925 ) ( 7,643,526 ) ( 11,676,451 ) Other income (expense): Realized gain on sale of bitcoin — 222,751 222,751 Unrealized gain on investment 274,731 274,731 Interest expense ( 45,942 ) — ( 45,942 ) Total other income ( 45,942 ) 497,482 451,540 Net loss ( 4,078,867 ) ( 7,146,044 ) ( 11,224,911 ) Preferred dividends (related party) ( 124,903 ) — ( 124,903 ) Net Loss Applicable to Common Stockholders’ $ ( 4,203,770 ) $ ( 7,146,044 ) $ ( 11,349,814 ) NOTE 18 – MERCHANT PORTFOLIO PURCHASE INSTALLMENT OBLIGATION 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, 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 $ 2,000,000 contingent payment amount as of December 31, 2024 and 2023. Legal proceedings regarding this matter began in 2022 and have continued through 2024, see Note 15. NOTE 19 – SUBSEQUENT EVENTS In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through, April 15, 2025, the date that the financial statements were issued and has determined that is has the following material subsequent events to disclose in these financial statements. Subsequent to December 31, 2024, the Company sold 90,762 shares of common stock from its ATM Offering, for total proceeds of $ 187,913 . Subsequent to December 31, 2024, Mr. Yakov made payments on behalf of the company in the amount of $ 10,848 . F- 29 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure On July 15, 2024, the Company decided to not engage Mac Accounting Group & CPAs, LLP (“MAC”), the Company’s independent registered public accounting firm, for the Company’s audit and therefore dismissed the firm effective immediately. During the fiscal year ended December 31, 2023, MAC’s audit reports on the Company's financial statements did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles. There were no disagreements between the Company and MAC on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to MAC’s satisfaction, would have caused MAC to make reference in connection with MACs report to the subject matter of the disagreement; and there were no “reportable events” as the term is described in Item 304(a)(1)(v) of Regulation S-K, except for the disclosure of material weaknesses in the Company’s internal controls over financial reporting as disclosed in Part II, Item 9A of the Company’s Form 10-K for the year ended December 31, 2023. On July 15, 2024, the Company approved the engagement of RBSM LLP (“RBSM”) as the Company’s new independent registered public accounting firm, effective immediately. During the fiscal years ended December 31, 2023 and 2024 and through the date of this Current Report on Form 8-K, neither the Company nor anyone acting on its behalf consulted RBSM with respect to (i) the application of accounting principles to a specified transaction, either completed or proposed, nor the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report was provided to the Company nor oral advice provided that RBSM concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a disagreement or a “reportable event” as described in Items 304(a)(1)(iv) and (v), respectively, of Regulation S-K.