OLB GROUP, INC. 10-Q

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements The information in this report contains forward-looking statements. All statements other than statements of historical fact made in this report are forward-looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management’s current expectations and are inherently uncertain. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, our actual results may differ significantly from management’s expectations. These risks and uncertainties include those factors described in greater detail in the risk factors disclosed in our Form 10-K for the fiscal year ended December 31, 2024 filed with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those anticipated in these forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or, in the case of documents referred to or incorporated by reference, the date of those documents. The following discussion and analysis should be read in conjunction with our unaudited financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management. Company Overview and Description of Business Overview We are a FinTech company that focuses on a suite of products in the merchant services marketplace that seeks to provide integrated business solutions to merchants throughout the United States. We seek to accomplish this by providing merchants with a wide range of products and services through our various online platforms, including financial and transaction processing services. We also have products that provide support for crowdfunding and other capital-raising initiatives. We supplement our online platforms with certain hardware solutions that are integrated with our online platforms. Our business functions primarily through three wholly-owned subsidiaries, eVance, Inc., a Delaware corporation (“eVance”), OmniSoft.io, Inc., a Delaware corporation (“OmniSoft”), and CrowdPay.Us, Inc., a New York corporation (“CrowdPay”), though substantially all of our revenue has been generated from our eVance business (we began generating revenue from our OmniSoft and CrowdPay businesses in the second half of 2019). We expect to build out our OmniSoft software business and to rely more on individualized merchant services offerings for revenue so that we are not dependent on our revenue from our eVance business but there is no guarantee that we will be able to do so. We have integrated all the applications for OmniSoft and the ShopFast Omnicommerce solution with the eVance mobile payment gateway, SecurePay.comTM. SecurePay.comTM. In July 2019, we launched a new merchant and ISO boarding system that will be able to onboard merchants instantly. This provides the merchant with an automated approval and ISOs will have the ability to see all their merchants and their residuals as they load to the system. 26 On May 22, 2020, the Company purchased certain assets from POSaBIT Inc. (“POSaBIT”), including its contracts and arrangements with the Doublebeam merchant payment processing platform (the “POSaBIT Asset Acquisition”). The assets included, but were not limited to, software source codes, customer lists, customer contracts, hardware and website domains. On May 14, 2021, the Company formed OLBit, Inc., a wholly owned subsidiary (“OLBit”). The purpose of OLBit is to hold the Company’s assets and operate its business related to its emerging money transmission and transactional business. OLBit was previously in the process of applying for money transmission licenses in all 50 states. In June 2023, it was decided to delay the process of applying for such licenses in order to have a greater focus of financial and management resources on the Company’s payment processing business and Bitcoin mining business. On July 23, 2021, we formed DMINT, Inc., a wholly owned subsidiary (“DMINT”) to operate in the Bitcoin mining industry, specifically the mining of Bitcoin. DMINT initiated the first phase of the Bitcoin mining operation by placing data centers and ASIC-based Antminer S19J Pro mining computers specifically configured to mine Bitcoin in Pennsylvania. As of December 31, 2022, DMINT had purchased 1,000 computers. DMint has a data center located in Selmer, Tennessee. In February 2023, DMINT redeployed its mining computers from its Pennsylvania location and focus the mining efforts at the Selmer, Tennessee location because of the lower cost of operations in the location. As of December 31, 2024, DMINT had 1,000 computers and had 400 computers online and mining for Bitcoin. At September 30, 2025, DMINT had mined 60.01 Bitcoin. On October 21, 2024, DMINT filed a Registration Statement on Form S-1 with the Securities and Exchange Commission (the “SEC”), relating to the proposed spinoff from the Company and resulting issuance of equity of DMINT to OLB shareholders. On August 16, 2022, DMINT Real Estate Holdings, Inc. (“DREH”), a wholly owned subsidiary of DMINT, purchased 4.73 acres of land and a building located at 565 Industrial Park Drive, Selmer, McNairy County, Tennessee for a purchase price of $408,000. DMINT established a Bitcoin mining data center powered on the local power grid. The location is expected to have capacity for up to 5,000 mining machines. The Company plans to complete the buildout of the building to be fully operational with 5,000 machines in 2025 following a spin-off of DMINT into a standalone entity, which is currently in process and has not yet been consummated. As stated above, we are currently in the process of spinning off DMINT into a stand-alone entity. Our planned DMINT spin-off distribution (the “Spin-Off Distribution”) will occur upon DMINT’s Form S-1 Registration Statement filing being declared effective by the Securities and Exchange Commission, and the approval by the Nasdaq Capital Market (“NASDAQ”) of the listing of DMINT’s common shares on the NASDAQ. Following the consummation of the Spin-Off Distribution, of which there is no guarantee, (i) DMINT will no longer be a wholly owned subsidiary of the Company and will be a stand-alone entity, (ii) all of DMINT’s outstanding shares of common stock will be owned by the existing stockholders of the Company, and (iii) DMINT Real Estate Holdings, Inc. (“DREH”) will remain a wholly owned subsidiary of DMINT 27 CrowdPay.us™ operates a white label capital raising platform that targets small and midsized businesses seeking to raise capital and registered broker-dealers seeking to host capital raising campaigns for such businesses by integrating the platform onto such company’s or broker-dealer’s website. Our CrowdPay platform is tailored for companies seeking to raise money through a crowdfunding offering of between $1 million and $50 million pursuant to Regulation CF under Title III of the Jumpstart Our Business Startups (the “JOBS Act”), offerings pursuant to Rule 506(b) and Rule 506(c) under Regulation D of the Securities Act of 1933, as amended (the “Securities Act”), and offerings pursuant to Regulation A+ of the Securities Act. Our platform, which can be used for multiple offerings at once, provides companies and broker-dealers with an easy-to-use, turnkey solution to support company offerings, allowing companies and broker-dealers to easily present online to potential investors relevant marketing and offering materials and by aiding in the accreditation and background check processes to ensure investors meets the applicable requirements under the rules and regulations of the Securities Exchange Commission (the “SEC”). CrowdPay charges a fee to each company and broker-dealer for the use of its platform under a fee structure that is agreed to between CrowdPay and the Company and/or broker-dealer prior to the initiation of the offering. CrowdPay also generates revenues by providing ancillary services to the companies and broker-dealers utilizing our platform, including running background checks and providing anti-money laundering and know-your-customer compliance. CrowdPay is not a registered funding portal or a registered broker-dealer. On January 3, 2022, the Company entered into a share exchange agreement with all of the shareholders of Crowd Ignition, Inc. (“Crowd Ignition”) whereby the Company purchased 100% of the equity of Crowd Ignition in exchange for 1,318,408 shares of the common stock, par value $0.0001 of the Company (the “CI Issued Shares”). The value of the CI Issued Shares was, for purposes of the Agreement, based on the closing trading price of the Company on October 1, 2021 (the date on which a third-party fairness opinion was issued), resulting in an aggregate purchase price for Crowd Ignition of $5.3 million. The share exchange transaction closed on January 3, 2022. Prior to the closing of the share exchange transaction, Ronny Yakov, Chairman and CEO of the Company and John Herzog, a shareholder of the Company, owned 100% of the equity of Crowd Ignition. Crowd Ignition is a web-based crowdfunding software system. The software provides broker-dealer, merchant banks and law firms a platform to market crowdfunding offerings, collect payments and issue securities. The software has been developed in response to, and to comply with, recent changes in investment regulations including Regulation D 506(b) and 506(v), Regulation A+ and Title III of the Jobs Act (Regulation CF), including raising the crowdfunding limit from $1.07 million to $5.0 million. Crowd Ignition is one of only about 50 companies registered with the SEC to provide the services permitted under Regulation CF. On June 15, 2023, the Company entered into a Membership Interest Purchase Agreement (the “Agreement”) with SDI Black 001, LLC (“Seller”) whereby it acquired 80.01% of the membership interests of Moola Cloud, LLC, a Florida limited liability company (formerly Cuentas SDI, LLC, the “LLC”). The LLC will enable the Company to focus on marketing to the underbanked communities utilizing the LLC’s debit and calling card platform’s ability for users to reload cash to their account and provide instant access to digital products to their customers’ Mobile App and digital wallet into its electronic portal. The Company plans to market to the LLC’s merchant network, which currently has approximately 31,600 locations in the United States, the ability of having one POS system that will allow the retail customer to purchase products using OLB’s payment processing solutions along with the ability to reload payment cards and their mobile phone minutes. On May 20, 2024, the Company entered into a 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 the LLC. On August 14, 2024, the LLC changed its name to Moola Cloud, LLC. The Agreement contains a restrictive covenant whereby for a period of three (3) years from the closing, none of Seller, including its any of its principals, executives, officers, directors, managers, employees, salespersons, or entities in which such principal has any interest, will directly or indirectly (i) induce, attempt to induce, interfere with, disrupt or attempt to disrupt any past, present or prospective business relationship, solicit, market to, endeavor to obtain as a customer, or contract with any merchant in order to provide services to such Merchant in competition with the Company; or (ii) solicit or interfere with, disrupt or attempt to disrupt any past, present or prospective business relationship, contractual or otherwise any person or entity that is a party to any contract assigned to the Company to terminate its contractual or business relationship with the Company. 28 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 was automatically combined into one (1) issued and outstanding share of Common Stock, without any change in the par value per share. No fractional shares were issued as a result of the Reverse Stock Split and any fractional shares resulting from the reverse stock split were rounded down to the nearest number of whole shares so that we will issue cash in lieu of any fractional shares that such stockholder would have received as a result of the Reverse Stock Split. Following the Reverse Stock Split, the number of shares of Common Stock outstanding was reduced from 18,103,462 shares to 1,810,346 shares. The shares of Common Stock underlying the Company’s outstanding stock options and warrants will be similarly adjusted along with corresponding adjustments to their exercise prices. The number of authorized shares of Common Stock under the Certificate of Incorporation will remain unchanged at 50,000,000 shares. Results of Operations Management’s discussion and analysis of financial condition and results of operations (“MD&A”) includes a discussion of the consolidated results from operations of The OLB Group, Inc. and its subsidiaries for the three months ended September 30, 2025 and 2024. Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024 For the three months ended September 30, 2025, we had total revenue of $2,313,194 compared to $3,083,922 of revenue for the three months ended September 30, 2024, a decrease of $770,728 or 25%. We earned $2,106,362 in transaction and processing fees, $4,551 in merchant equipment rental and sales, $72,197 in other revenue from monthly recurring subscriptions, $78,814 of revenue from the Cryptocurrency Mining segment and $51,270 of revenue from the sale of digital products. For the three months ended September 30, 2024, we earned $2,569,596 in transaction and processing fees, $16,120 in merchant equipment rental and sales, $43,349 in other revenue from monthly recurring subscriptions, $88,078 of revenue from the Cryptocurrency Mining segment and $366,779 of revenue from the sale of digital products. We had a decrease in revenue primarily due to a decrease in revenue related to Moola Cloud, LLC, as the Company transitions to new vendors to obtain better pricing and is working to acquire new vendors to replace others that have gone out of business. For the three months ended September 30, 2025, we had processing and servicing costs of $2,090,937 compared to $2,604,414 of processing and servicing costs for the three months ended September 30, 2024, a decrease of $513,477 or 19.7%. Processing and servicing costs decreased in conjunction with the decreased revenue. Amortization expense for the three months ended September 30, 2025 was $0 compared to $112,499 for the three months ended September 30, 2024, a decrease of $112,499. We record amortization expense on our merchant portfolio, trademarks and natural gas purchase rights. The decrease in the current period is due to most of the assets being fully amortized in 2024 and the remainder in Q1 2025. 29 Depreciation expense for our Bitcoin Mining Segment was $120,694 for the three months ended September 30, 2025 compared to $656,017, for the three months ended September 30, 2024, a decrease of $535,323 or 81.6%. The decrease in the current period is due to assets being impaired in 2024. Salary and wage expense for the three months ended September 30, 2025, was $502,504 compared to $604,784 for the three months ended September 30, 2024, a decrease of $102,280 or 16.9%. The decrease is due to a decrease in headcount. Professional fees for the three months ended September 30, 2025, were $141,990 compared to $453,672 for the three months ended September 30, 2024, a decrease of $311,682 or 68.7%. Professional fees consist mainly of audit and legal fees. The decrease in the current period is due to a decrease in legal fees as the Company’s legal related activity was much less in the current period. General and administrative expenses for the three months ended September 30, 2025, was $591,858 compared to $282,794 for the three months ended September 30, 2024, an increase of $309,064 or 109.3%. The increase was mainly due to an increase of approximately $198,500 in utility expense, $47,800 of computer expenses, $29,400 of equipment expense, $13,700 of rent expense, $7,200 of travel expense and $9,600 of supplies expense. For the three months ended September 30, 2025, we had total other expenses of $40,231 compared to $0 for the three months ended September 30, 2024. In the current period we incurred interest expense for related parties of $231 and other expense of $40,000. Our net loss for the three months ended September 30, 2025, was $1,175,020 compared to $1,630,258 for the three months ended September 30, 2024. This was a decrease in our net loss of $455,238 for the reasons discussed above. Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024 For the nine months ended September 30, 2025, we had total revenue of $6,901,921 compared to $10,101,258 of revenue for the nine months ended September 30, 2024, a decrease of $3,199,334 or 31.7%. We earned $6,260,981 in transaction and processing fees, $21,238 in merchant equipment rental and sales, $215,193 in other revenue from monthly recurring subscriptions, $224,486 of revenue from the Cryptocurrency Mining segment and $180,023 of revenue from the sale of digital products. For the nine months ended September 30, 2024, we earned $7,341,998 in transaction and processing fees, 64,243 in merchant equipment rental and sales, $307,285 in other revenue from monthly recurring subscriptions, $341,972 of revenue from the Bitcoin Mining segment and $2,045,760 of revenue from the sale of digital products. We had a decrease in revenue primarily due to a decrease in revenue related to Moola Cloud, LLC, as the Company transitions to new vendors to obtain better pricing and is working to acquire new vendors to replace others that have gone out of business. For the nine months ended September 30, 2025, we had processing and servicing costs of $5,864,065 compared to $8,330,686 of processing and servicing costs for the nine months ended September 30, 2024, a decrease of $2,466,621 or 29.6%. Processing and servicing costs decreased in conjunction with the decreased revenue. Amortization expense for the nine months ended September 30, 2025 was $0 compared to $421,307 for the nine months ended September 30, 2024, a decrease of $421,307%. We record amortization expense on our merchant portfolio, trademarks and natural gas purchase rights. The decrease in the current period is due to most of the assets being fully amortized in 2024. Depreciation expense for our Bitcoin Mining Segment was $503,982 for the nine months ended September 30, 2025 compared to $2,249,208, for the nine months ended September 30, 2024, a decrease of $1,745,226 or 77.6%. The decrease in the current period is due to assets being impaired in 2024. Salary and wage expense for the nine months ended September 30, 2025, was $2,086,474 compared to $2,310,320 for the nine months ended September 30, 2024, a decrease of $223,846 or 9.7%. In the current period we issued shares of common stock for $450,000 of non-cash bonus expense, which was offset by a decrease in headcount and a $271,000 decrease for stock-based compensation. 30 Professional fees for the nine months ended September 30, 2025, were $554,129 compared $1,666,970 for the nine months ended September 30, 2024, a decrease of $1,112,841 or 66.8%. Professional fees consist mainly of audit and legal fees. The decrease in the current period is due to a decrease in legal fees as the Company’s legal related activity was much less in the current period. General and administrative expenses for the nine months ended September 30, 2025, was $1,573,485 compared to $2,255,673 for the nine months ended September 30, 2024, a decrease of $682,188 or 30.2%. The decrease was mainly due to an approximately $327,000 decrease in Bank Fees and a decrease of $225,000 in insurance expense. For the nine months ended September 30, 2025, we had total other expenses of $708,118 compared to total other income of $454,018 for the nine months ended September 30, 2024. In the current period we incurred interest expense for related parties of $395,355 and other expense of $85,000. We also recognized a loss on the extinguishment of debt of $52,000 and a loss on conversion of accrued salaries and loans payable of $175,763. For the nine months ended September 30, 2024, we had total other income of $454,018 from an unrealized gain on investment of $274,731, a $225,229 gain on the sale of bitcoin, and $45,942 of interest expense. Our net loss for the nine months ended September 30, 2025, was $4,388,332 compared to $6,678,888 for the nine months ended September 30, 2024. This was a decrease in our net loss of $2,290,556 for the reasons discussed above. In addition, we recognized a $775,000 deemed dividend for preferred stock and a $30,630 for preferred dividends for a net loss applicable to common shareholders of $5,193,962. Liquidity and Capital Resources Changes in Cash Flows Operating Activities For the nine months ended September 30, 2025, we used $1,291,120 of cash in operating activities, which included our net loss of $4,388,332 offset by $1,045,881 of non-cash reconciling items and net changes in operating assets and liabilities of $2,051,331. For the nine months ended September 30, 2024, we used $1,586,886 of cash in operating activities, which included our net loss of $6,678,888 offset by $2,670,515 for amortization and depreciation expense, $372,624 for stock-based compensation, $225,229 gain on sale of bitcoin, $274,731 gain on investment and net changes in operating assets and liabilities of $2,547,162. Investing Activities For the nine months ended September 30, 2025, we had no investing activities. For the nine months ended September 30, 2024, we received $548,393 from the sale of investment and used $215,500 to purchase the remaining 19.99% interest in the LLC. Financing Activities For the nine months ended September 30, 2025, we received net cash of $1,267,224 from financing activities as a result of receiving $461,888 from our CEO and $887,786 from the sale of common stock, and a decrease in our cash overdraft of $4,731. We made repayments on our note payable of $38,838 and to our CEO of $38,881. For the nine months ended September 30, 2024, we received net cash of $1,116,275 in financing activities as a result of receiving $1,191,282 from our CEO, $42,662 from the sale of common stock, $6,840 in proceeds from exercise of options by related parties, and an increase in our cash overdraft of $30,735. We made repayments on our note payable of $155,244. Liquidity and Capital Resources At September 30, 2025, the Company had cash of $3,540 and negative working capital of $6,036,698. On February 16, 2024, the Company entered into an Equity Distribution Agreement (the “Agreement”) with Maxim Group LLC (“Maxim”) to create an at-the-market equity 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. As of September 30, 2025, the ATM Offering has resulted in proceeds of $2,009,723. 31 On August 12, 2024, the Company entered into an agreement with Yakov Holdings, LLC, an entity controlled by Mr. Yakov whereby the Yakov Holdings, LLC committed to loan to the Company up to Five Million Dollars ($5,000,000) (the “Yakov Holdings, LLC Loan”). The Yakov Holdings, 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 Holdings, LLC Loan is twelve percent (12%) and it matures on June 18, 2025. In addition, the Yakov Holdings, LLC Loan is secured by a first priority security interest for the benefit of Yakov Holdings, LLC over all of the assets of the Company. During the six months ended June 30, 2025, all amounts owed to Mr. Yakov were converted into shares of common stock. During the three months ended September 30, 2025. Mr. Yakov loaned the Company an additional $115,815. The Company has reviewed its cash flow activity during 2024 and the first nine months ended September 30, 2025 and projected cash flow forecast for the remainder of 2025. At September 30, 2025, the Company had cash of approximately $3,500, accounts receivable of approximately $47,000, and other assets and receivables of approximately $840,000. The Company has performed an overall analysis of market trends to determine whether or not it has sufficient liquidity to continue as a going concern for a period of at least twelve months from the date of this Annual Report. 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 November 30, 2026. The accompanying unaudited condensed 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. Critical Accounting Policies Refer to our Form 10-K for the year ended December 31, 2024, for a full discussion of our critical accounting policies. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.