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What changed in OLB GROUP, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of OLB GROUP, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+168 added−252 removedSource: 10-K (2024-04-15) vs 10-K (2023-03-30)

Top changes in OLB GROUP, INC.'s 2023 10-K

168 paragraphs added · 252 removed · 133 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeIn particular, you should consider the following risks, which are discussed more fully in the section entitled “Risk Factors” in this Annual Report: ● Our acquisition of eVance and share exchange with OmniSoft and CrowdPay has collectively formed a new business platform which we are continuing to integrate into our overall operations, and which may create certain risks and may adversely affect our business, financial condition or results of operations; ● We operate in a regulatory environment that is evolving and uncertain and any changes to regulations could have a material impact on our business and financial condition; ● We rely on a combination of confidentiality clauses, assignment agreements and license agreements with employees and third parties, trade secrets, copyrights and trademarks to protect our intellectual property and competitive advantage, all of which offer only limited protection meaning that we may be unable to maintain and protect our intellectual property rights and proprietary information or prevent third-parties from making unauthorized use of our technology; ● Our growth may not be sustainable and depends on our ability to attract new merchants, retain existing merchants and increase sales to both new and existing merchants; ● While we believe that we have sufficient capital to continue operations for a period of at least twelve months from the date of this Annual Report (not giving effect to any proceeds to us from this offering), if there are unanticipated expenses, insufficient cash from operations or the impact of the COVID-19 pandemic results in a larger than anticipated decline in transactions, we may require additional capital to continue our operations that may not be available or, if available, may not be available on reasonable terms; ● We are substantially dependent on our eVance business for revenue.
Biggest changeIn particular, you should consider the following risks, which are discussed more fully in the section entitled “Risk Factors” in this Annual Report: ● We operate in a regulatory environment that is evolving and uncertain and any changes to regulations could have a material impact on our business and financial condition; ● We rely on a combination of confidentiality clauses, assignment agreements and license agreements with employees and third parties, trade secrets, copyrights and trademarks to protect our intellectual property and competitive advantage, all of which offer only limited protection meaning that we may be unable to maintain and protect our intellectual property rights and proprietary information or prevent third-parties from making unauthorized use of our technology; ● Our growth may not be sustainable and depends on our ability to attract new merchants, retain existing merchants and increase sales to both new and existing merchants; ● While we believe that we have sufficient capital to continue operations for a period of at least twelve months from the date of this Annual Report, if there are unanticipated expenses, insufficient cash from operations, we may require additional capital to continue our operations that may not be available or, if available, may not be available on reasonable terms; ● We are substantially dependent on our eVance business for revenue.
If we are unable to maintain our eVance business for any reason (including the various reasons described in the risk factors herein) or for no reason, it will have a material adverse effect on our company; 7 ● Our ability to anticipate and respond to changing industry trends and the needs and preferences of our merchants and consumers may adversely affect our competitiveness or the demand for our products and services; ● The properties included in our mining network may experience damages; ● Regulatory changes or actions may alter the nature of an investment in us or restrict the use of cryptocurrencies in a manner that adversely affects our business, prospects or operations; ● Banks and financial institutions may not provide banking services, or may cut off services, to businesses that provide cryptocurrency-related services or that accept cryptocurrencies as payment, including financial institutions of investors in our securities; ● It may be illegal now, or in the future, to acquire, own, hold, sell or use Bitcoin or other cryptocurrencies, participate in the blockchain or utilize similar digital assets in one or more countries, the ruling of which would adversely affect us. ● Acquisitions create certain risks and may adversely affect our business, financial condition or results of operations; and ● If we fail to improve and enhance the functionality, performance, reliability, design, security and scalability of our platform in a manner that responds to our merchants’ evolving needs, our business may be adversely affected.
If we are unable to maintain our eVance business for any reason (including the various reasons described in the risk factors herein) or for no reason, it will have a material adverse effect on our company; 7 ● Our ability to anticipate and respond to changing industry trends and the needs and preferences of our merchants and consumers may adversely affect our competitiveness or the demand for our products and services; ● The properties included in our mining network may experience damages; ● Regulatory changes or actions may alter the nature of an investment in us or restrict the use of cryptocurrencies in a manner that adversely affects our business, prospects or operations; ● Banks and financial institutions may not provide banking services, or may cut off services, to businesses that provide cryptocurrency-related services or that accept cryptocurrencies as payment, including financial institutions of investors in our securities; ● It may be illegal in the future, to acquire, own, hold, sell or use Bitcoin or other cryptocurrencies, participate in the blockchain or utilize similar digital assets in one or more countries, the ruling of which would adversely affect us. ● Acquisitions create certain risks and may adversely affect our business, financial condition or results of operations; and ● If we fail to improve and enhance the functionality, performance, reliability, design, security and scalability of our platform in a manner that responds to our merchants’ evolving needs, our business may be adversely affected.
We will remain an emerging growth company until the earliest to occur of: (i) our reporting $1.07 billion or more in annual gross revenues; (ii) the end of fiscal year 2024; (iii) our issuance, in a three year period, of more than $1 billion in non-convertible debt; and (iv) the end of the fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million on the last business day of our second fiscal quarter. 10
We will remain an emerging growth company until the earliest to occur of: (i) our reporting $1.07 billion or more in annual gross revenues; (ii) the end of fiscal year 2024; (iii) our issuance, in a three year period, of more than $1 billion in non-convertible debt; and (iv) the end of the fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million on the last business day of our second fiscal quarter.
Our Company’s headquarters is located at 1120 Avenue of the Americas, 4 th Floor, New York, NY 10036. Our telephone number is (212) 278-0900. Implications of Being an Emerging Growth Company We qualify as an “emerging growth company” as defined under the Securities Act.
Our Company’s headquarters is located at 1120 Avenue of the Americas, 4 th Floor, New York, NY 10036. Our telephone number is (212) 278-0900. 10 Implications of Being an Emerging Growth Company We qualify as an “emerging growth company” as defined under the Securities Act.
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 has been in the process of applying for money transmission licenses in all 50 states along with New York Bitlicense.
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 had been in the process of applying for money transmission licenses in all 50 states along with New York Bitlicense.
Employees As of December 31, 2022, we had six key employees as part of our overall staff of 26 full-time employees. Our risk, compliance, underwriting and analyst’s accounting and customer service functions are primarily located in Georgia.
Employees As of December 31, 2023, we had six key employees as part of our overall staff of 26 full-time employees. Our risk, compliance, underwriting and analyst’s accounting and customer service functions are primarily located in Georgia.
(“DREH”), a wholly owned subsidiary of purchased 4.73 acres of land and a building located at 565 Industrial Park Drive, Selmer, McNairy County, Tennessee for a purchase price of $408,000.00. DMINT established a Bitcoin mining data center powered on the local power grid.
(“DREH”), a wholly owned subsidiary of purchased 4.73 acres of land and a building located at 565 Industrial Park Drive, Selmer, McNairy County, Tennessee for a purchase price of $408,000.00. 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 gateway will allow merchants that are using the platform to accept online eCommerce transactions. 6 Competitive Advantages We believe that our platform of services will provide the following key advantages. ● Time to Market — we can create a customized website for retailers within days and have it fully operational in less than 2 weeks. ● Cost — we believe that we are the only content service provider that does not charge a setup fee. ● Flexibility — our platform has the flexibility to provide customized solutions for partners. ● Pricing — we provide partners with a price comparison feature which they can utilize if they wish to set prices for products or run promotions. ● Payment processing — we can provide financial service companies with the ability to have their customers’ accounts directly debited for payment. ● We can assist existing “brick & mortar” businesses that have inventory and fulfilment capability but do not wish to create and maintain an e-commerce website and infrastructure to sell their products. ● We can provide a platform for early-stage companies looking for an effective and less costly way to raise capital.
During 2022 and 2023, we did not develop any new retailer websites but continue to offer the service. ● Cost — we believe that we are the only content service provider that does not charge a setup fee. ● Flexibility — our platform has the flexibility to provide customized solutions for partners. ● Pricing — we provide partners with a price comparison feature which they can utilize if they wish to set prices for products or run promotions. ● Payment processing — we can provide financial service companies with the ability to have their customers’ accounts directly debited for payment. ● We can assist existing “brick & mortar” businesses that have inventory and fulfilment capability but do not wish to create and maintain an e-commerce website and infrastructure to sell their products. ● We can provide a platform for early-stage companies looking for an effective and less costly way to raise capital.
For example, merchant services utilizing eVance provide electronic payment processing services that can be utilized for payments on the Crowdfunding platform. The platform is used by merchant services to allow mobile and online processing to merchants. The Omni commerce platform will be offered to all of the merchant services clients.
The platform is used by merchant services to allow mobile and online processing to merchants. The Omni commerce platform will be offered to all of the merchant services clients. The offered Merchant Services products we provide will enable all processing needs for the OmniCommerce system.
For more information regarding the electronic payment industry, see “Business — Description of our eVance Business — Our Industry.” We expect to build out our OmniSoft software business and to rely more on our individualized merchant services offerings to transition away from our reliance on our eVance business but there is no guarantee that we will be able to do so. 2 3 SecurePay SecurePay is a payment gateway and virtual terminal with proprietary business management tools that is in compliance with the Payment Card Industry (PCI).
For more information regarding the electronic payment industry, see “Business — Description of our eVance Business — Our Industry.” 2 3 SecurePay SecurePay is a payment gateway and virtual terminal with proprietary business management tools that is in compliance with the Payment Card Industry (PCI).
CrowdPay is not a registered funding portal or a registered broker-dealer. 4 On January 3, 2022, the the Company entered into a share exchange agreement with all of the shareholders of Crowd Ignition, Inc.
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. 4 On January 3, 2022, the Company entered into a share exchange agreement with all of the shareholders of Crowd Ignition, Inc.
On July 23, 2021, we formed DMINT, Inc., a wholly owned subsidiary (“DMINT”) to operate in the cryptocurrency mining industry. DMINT initiated the first phase of the cryptocurrency mining operation by establishing data centers and ASIC-based Antminer S19J Pro mining computers specifically configured to mine Bitcoin in Bradford, Pennsylvania.
DMINT initiated the first phase of the Bitcoin mining operation by establishing data centers and ASIC-based Antminer S19J Pro mining computers specifically configured to mine Bitcoin in Bradford, Pennsylvania. As of December 31, 2023, DMINT had 400 computers online and mining for Bitcoin. It has six data centers located in Tennessee.
Starting with the services provided by eVance, we enable each of our products and platforms to communicate with each other and create an ecosystem among our products and, potentially, third-party products. The product environment created with a new registered merchant or issuer enables all merchant information to be stored in a single, centralized location but utilized by all subsidiaries.
Starting with the services provided by eVance, we enable each of our products and platforms to communicate with each other and create an ecosystem among our products and, potentially, third-party products. These services are provided to other subsidiaries such as Black011, the bodega distribution subsidiary.
As of December 31, 2022, DMINT had 1,000 computers online and mining for Bitcoin. It has six data centers located in Pennsylvania and Tennessee. Since February 2023, DMINT has been working to redeploy the computers from the Pennsylvania location and focus the mining efforts at the Selmer, TN location because of the lower cost of operations in the location.
In February 2023, DMINT redeployed its mining computers from its Pennsylvania location and focus the mining efforts at the Selmer, TN location because of the lower cost of operations in the location. 5 On August 16, 2022, DMINT Real Estate Holdings, Inc.
The location is expected to have capacity for up to 5,000 mining machines. 5 Synergies between the subsidiaries The success of our business model is dependent on the synergies between the business segments operated by our subsidiaries.
The Company plans to complete the buildout of the building to be fully operational with 5,000 machines in 2024 following a spin-off of DMINT into a standalone entity which is currently in process. Synergies between the subsidiaries The success of our business model is dependent on the synergies between the business segments operated by our subsidiaries.
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On May 22, 2020, we purchased certain assets from POSaBIT Inc., including its contracts and arrangements with the Doublebeam merchant payment processing platform. The assets included, but were not limited to, software source codes, customer lists, customer contracts, hardware and website domains.
Added
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”).
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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 “Purchased Assets”).
Added
The LLC’s owns the platform of Black011.com and the network serving over 31,000 convenience stores (“Bodegas”) in and around New York and New Jersey.
Removed
In addition to the Purchased Assets, the Company purchased customer lists, intellectual property, residuals, rebates, or credits relating to the Purchased Assets accruing from October 1, 2021. The group of merchants acquired have reported annual transaction volume of greater than $300 million.
Added
Around June 2023, it was decided to delay the process of applying for licenses in order to have a greater focus of financial and management resources on the Company’s payment processing business and DMINT’s Bitcoin mining business. On July 23, 2021, we formed DMINT, Inc., a wholly owned subsidiary (“DMINT”) to operate in the Bitcoin mining industry.
Removed
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.
Added
The product environment created with a new registered merchant or issuer enables all merchant information to be stored in a single, centralized location but utilized by all subsidiaries. For example, merchant services utilizing eVance provide electronic payment processing services that can be utilized for payments on the Crowdfunding platform.
Removed
It still continues to retain its natural gas rights in Pennsylvania and, in the event that the operating cost projections lower, it may either redeploy existing computers back to Pennsylvania or place newly purchased machines at the location. On August 16, 2022, DMINT Real Estate Holdings, Inc.
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The gateway will allow merchants that are using the platform to accept online eCommerce transactions. 6 Competitive Advantages We believe that our platform of services will provide the following key advantages. ● Time to Market — we can create a customized website for retailers within days and have it fully operational in less than 2 weeks.
Removed
The offered Merchant Services products we provide will enable all processing needs for the OmniCommerce system.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

85 edited+20 added−95 removed359 unchanged
Biggest changeIf regulatory changes or interpretations require the regulation of bitcoins or other digital assets under the securities laws of the United States or elsewhere, including the Securities Act, the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Investment Company Act of 1940, as amended, or similar laws of other jurisdictions and interpretations by the SEC, the Commodity Futures Trading Commission (“CFTC”), the Internal Revenue Service (“IRS”), Department of Treasury or other agencies or authorities, we may be required to register and comply with such regulations, including at a state or local level.
Biggest changeSuch circumstances would have a material adverse effect on our ability to continue as a going concern or to pursue this segment at all, which would have a material adverse effect on our business, prospects or operations and potentially the value of any cryptocurrencies we hold or expect to acquire for our own account and harm investors. 37 If regulatory changes or interpretations require the regulation of Bitcoin or other digital assets under the securities laws of the United States or elsewhere, including the Securities Act, the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Investment Company Act of 1940, as amended, or similar laws of other jurisdictions and interpretations by the SEC, the Commodity Futures Trading Commission (“CFTC”), the Internal Revenue Service (“IRS”), Department of Treasury or other agencies or authorities, we may be required to register and comply with such regulations, including at a state or local level.
The failure of our vendors and partners to perform their obligations and provide the products and services we obtain from them in a timely manner for any reason could adversely affect our operations and profitability due to, among other consequences: ● loss of revenues; ● loss of merchants and partners; 22 ● loss of merchant and cardholder data; ● fines imposed by card networks; ● harm to our business or reputation resulting from negative publicity; ● exposure to fraud losses or other liabilities; ● additional operating and development costs; or ● diversion of management, technical and other resources.
The failure of our vendors and partners to perform their obligations and provide the products and services we obtain from them in a timely manner for any reason could adversely affect our operations and profitability due to, among other consequences: ● loss of revenues; ● loss of merchants and partners; ● loss of merchant and cardholder data; ● fines imposed by card networks; ● harm to our business or reputation resulting from negative publicity; ● exposure to fraud losses or other liabilities; 22 ● additional operating and development costs; or ● diversion of management, technical and other resources.
We expect that the competitive landscape will continue to change, including: ● rapid and significant changes in technology, resulting in new and innovative payment methods and programs, that could place us at a competitive disadvantage and reduce the use of our products and services; ● competitors, merchants, governments and other industry participants may develop products and services that compete with or replace our value-added products and services, including products and services that enable card networks and banks to transact with consumers directly; ● participants in the financial services and payment technology industries may merge, create joint ventures, or form other business combinations that may strengthen their existing business services or create new payment services that compete with our services; and ● new services and technologies that we develop may be impacted by industry-wide solutions and standards, including chip technology, tokenization, Blockchain and other safety and security technologies.
We expect that the competitive landscape will continue to change, including: ● rapid and significant changes in technology, resulting in new and innovative payment methods and programs, that could place us at a competitive disadvantage and reduce the use of our products and services; ● competitors, merchants, governments and other industry participants may develop products and services that compete with or replace our value-added products and services, including products and services that enable card networks and banks to transact with consumers directly; ● participants in the financial services and payment technology industries may merge, create joint ventures, or form other business combinations that may strengthen their existing business services or create new payment services that compete with our services; and 17 ● new services and technologies that we develop may be impacted by industry-wide solutions and standards, including chip technology, tokenization, Blockchain and other safety and security technologies.
If any of these effects were to occur, our operating results and financial condition could be adversely affected. 12 We may not be able to integrate new technologies and provide new services in a cost-efficient manner. The online E-commerce industry is subject to rapid and significant changes in technology, frequent new service introductions and evolving industry standards.
If any of these effects were to occur, our operating results and financial condition could be adversely affected. We may not be able to integrate new technologies and provide new services in a cost-efficient manner. The online E-commerce industry is subject to rapid and significant changes in technology, frequent new service introductions and evolving industry standards.
These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares. As a “thinly-traded” stock, large sales can place downward pressure on our stock price. Our stock experiences periods when it could be considered “thinly traded”.
These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares. 39 As a “thinly-traded” stock, large sales can place downward pressure on our stock price. Our stock experiences periods when it could be considered “thinly traded”.
Failure to compete effectively against any of these or other competitive threats could adversely affect our business, financial condition or results of operations. 17 Global economic, political and other conditions may adversely affect trends in consumer, business and government spending, which may adversely impact the demand for our services and our revenue and profitability.
Failure to compete effectively against any of these or other competitive threats could adversely affect our business, financial condition or results of operations. Global economic, political and other conditions may adversely affect trends in consumer, business and government spending, which may adversely impact the demand for our services and our revenue and profitability.
Such factors would have a material adverse effect on our ability to continue as a going concern or to pursue this segment at all, which would have a material adverse effect on our business, prospects or operations and harm investors. 39 The impact of geopolitical events on the supply and demand for cryptocurrencies is uncertain.
Such factors would have a material adverse effect on our ability to continue as a going concern or to pursue this segment at all, which would have a material adverse effect on our business, prospects or operations and harm investors. The impact of geopolitical events on the supply and demand for cryptocurrencies is uncertain.
Failure to recruit, retain or develop qualified personnel could adversely affect our business, financial condition or results of operations. There may be a decline in the use of cards as a payment mechanism for consumers or adverse developments with respect to the card industry in general.
Failure to recruit, retain or develop qualified personnel could adversely affect our business, financial condition or results of operations. 23 There may be a decline in the use of cards as a payment mechanism for consumers or adverse developments with respect to the card industry in general.
In particular, bitcoin and other cryptocurrencies may not be excluded from the definition of “security” by SEC rulemaking or interpretation requiring registration of all transactions, unless another exemption is available, including transacting in bitcoin or cryptocurrency amongst owners and require registration of trading platforms as “exchanges”.
In particular, Bitcoin and other cryptocurrencies may not be excluded from the definition of “security” by SEC rulemaking or interpretation requiring registration of all transactions, unless another exemption is available, including transacting in Bitcoin amongst owners and require registration of trading platforms as “exchanges”.
If an incident were to occur that damages our reputation, or the reputation of our partners, in any of our major markets, the value of our brand could be adversely affected and our business could be damaged. 23 Our ability to recruit, retain and develop qualified personnel is critical to our success and growth.
If an incident were to occur that damages our reputation, or the reputation of our partners, in any of our major markets, the value of our brand could be adversely affected and our business could be damaged. Our ability to recruit, retain and develop qualified personnel is critical to our success and growth.
The termination of our registration, or any changes in card network rules that would impair our registration, could require us to stop providing payment processing services relating to the affected card network, which would adversely affect our ability to conduct our business. OMNISOFT.IO, INC.
The termination of our registration, or any changes in card network rules that would impair our registration, could require us to stop providing payment processing services relating to the affected card network, which would adversely affect our ability to conduct our business. 24 OMNISOFT.IO, INC.
Our cryptocurrency mining operation in Tennessee is, and any future mining farms we establish will be, subject to a variety of risks relating to physical condition and operation, including: ● the presence of construction or repair defects or other structural or building damage; ● any noncompliance with or liabilities under applicable environmental, health or safety regulations or requirements or building permit requirements; ● any damage resulting from natural disasters, such as hurricanes, earthquakes, fires, floods and windstorms; and ● claims by employees and others for injuries sustained at our properties.
Our Bitcoin mining operation in Tennessee is, and any future mining farms we establish will be, subject to a variety of risks relating to physical condition and operation, including: ● the presence of construction or repair defects or other structural or building damage; ● any noncompliance with or liabilities under applicable environmental, health or safety regulations or requirements or building permit requirements; ● any damage resulting from natural disasters, such as hurricanes, earthquakes, fires, floods and windstorms; and ● claims by employees and others for injuries sustained at our properties.
As a result, our merchants’ businesses may suffer, which would affect the ability of such merchants to pay for our solutions. Search engines revise their algorithms from time to time in an attempt to optimize their search results.
As a result, our merchants’ businesses may suffer, which would affect the ability of such merchants to pay for our solutions. 30 Search engines revise their algorithms from time to time in an attempt to optimize their search results.
Furthermore, the requirements of the regulations and the timing of their effective dates could result in changes in our merchants’ business practices, which could change the demand for our services and alter the type or volume of transactions that we process on behalf of our merchants. DMINT and OLBit Cryptocurrency Mining Risks We have an evolving business model.
Furthermore, the requirements of the regulations and the timing of their effective dates could result in changes in our merchants’ business practices, which could change the demand for our services and alter the type or volume of transactions that we process on behalf of our merchants. DMINT and OLBit Bitcoin Mining Risks We have an evolving business model.
If a malicious actor or botnet obtains a majority of the processing power dedicated to mining a cryptocurrency, it may be able to alter the distributed ledger network on which transactions of cryptocurrency reside and rely by constructing fraudulent blocks or preventing certain transactions from completing in a timely manner, or at all.
If a malicious actor or botnet obtains a majority of the processing power dedicated to mining of Bitcoin, it may be able to alter the distributed ledger network on which transactions of Bitcoin reside and rely by constructing fraudulent blocks or preventing certain transactions from completing in a timely manner, or at all.
Such circumstances could have a material adverse effect on our ability to continue as a going concern or to pursue our new strategy at all, which could have a material adverse effect on our business, prospects or operations. 37 We may not be able to compete with other companies, some of which have greater resources and experience.
Such circumstances could have a material adverse effect on our ability to continue as a going concern or to pursue our new strategy at all, which could have a material adverse effect on our business, prospects or operations. 33 We may not be able to compete with other companies, some of which have greater resources and experience.
Furthermore, many of our current and potential competitors have the ability to dedicate substantially greater resources to developing and protecting their technology or intellectual property rights than we do. 30 Our use of “open source” software could negatively affect our ability to sell our solutions and subject us to possible litigation.
Furthermore, many of our current and potential competitors have the ability to dedicate substantially greater resources to developing and protecting their technology or intellectual property rights than we do. 29 Our use of “open source” software could negatively affect our ability to sell our solutions and subject us to possible litigation.
Our dependence on third-party software and personnel may leave us vulnerable to price fluctuations and rapidly changing technology. Competitive conditions within the cryptocurrency industry require that we use sophisticated technology in the operation of our future cryptocurrency mining business segment. We plan to utilize third-party software applications in our mining operations.
Our dependence on third-party software and personnel may leave us vulnerable to price fluctuations and rapidly changing technology. Competitive conditions within the Bitcoin mining industry require that we use sophisticated technology in the operation of our future Bitcoin mining business segment. We plan to utilize third-party software applications in our mining operations.
Cryptocurrencies and blockchain technologies are relatively new and highly speculative. Cryptocurrencies and blockchain technologies have limited history, and their risks cannot be fully known at this time. As cryptocurrency assets and blockchain technologies become more widely available, we expect the services and products associated with them to evolve.
Cryptocurrencies and blockchain technologies are relatively new and highly speculative. Bitcoin and blockchain technologies have limited history, and their risks cannot be fully known at this time. As Bitcoin assets and blockchain technologies become more widely available, we expect the services and products associated with them to evolve.
If federal or state legislatures or agencies initiate or release tax determinations that change the classification of bitcoins as property for tax purposes (in the context of when such bitcoins are held as an investment), such determination could have a negative tax consequence on our Company or our shareholders.
If federal or state legislatures or agencies initiate or release tax determinations that change the classification of Bitcoin as property for tax purposes (in the context of when such Bitcoin are held as an investment), such determination could have a negative tax consequence on our Company or our shareholders.
Further, we that some of our operations may be conducted through collaboration with software providers. The industry for blockchain technology is characterized by rapid technological changes, new product introductions, enhancements and evolving industry standards.
Further, some of our operations may be conducted through collaboration with software providers. The industry for blockchain technology is characterized by rapid technological changes, new product introductions, enhancements and evolving industry standards.
We may not be able to compete successfully against present or future competitors. We do not have the resources to compete with larger providers of similar services at this time. The cryptocurrency industry has attracted various high-profile and well-established operators, some of which have substantially greater liquidity and financial resources than we do.
We may not be able to compete successfully against present or future competitors. We do not have the resources to compete with larger providers of similar services at this time. The Bitcoin mining industry has attracted various high-profile and well-established operators, some of which have substantially greater liquidity and financial resources than we do.
We may not be successful, generally or relative to our competitors in the cryptocurrency industry, in timely implementing new technology into our systems, or doing so in a cost-effective manner. During the course of implementing any such new technology into our operations, we may experience the system interruptions and failures discussed above.
We may not be successful, generally or relative to our competitors in the Bitcoin mining industry, in timely implementing new technology into our systems, or doing so in a cost-effective manner. During the course of implementing any such new technology into our operations, we may experience the system interruptions and failures discussed above.
Although currently Bitcoin and other cryptocurrencies, the blockchain and digital assets generally are not regulated or are lightly regulated in most countries, including the United States, one or more countries such as China and Russia may take regulatory actions in the future that could severely restrict the right to acquire, own, hold, sell or use these digital assets or to exchange for fiat currency.
Although currently Bitcoin and other cryptocurrencies, the blockchain and digital assets generally are not regulated or are lightly regulated in most countries, including the United States, one or more countries may take regulatory actions in the future that could severely restrict the right to acquire, own, hold, sell or use these digital assets or to exchange for fiat currency.
Historically, substantially all of our revenue has been generated from our eVance business, though we did begin generating revenue from our OmniSoft and CrowdPay business during the second half of 2019. In addition, the launch of our Cryptocurrency Mining business in 2021 has started to generate revenue in 2021 and 2022.
Historically, substantially all of our revenue has been generated from our eVance business, though we did begin generating revenue from our OmniSoft business during the second half of 2019. In addition, the launch of our Bitcoin Mining business in 2021 has started to generate revenue in 2021 and 2022.
Acceptance and/or widespread use of cryptocurrency is uncertain. Currently, there is a relatively small use of bitcoins and/or other cryptocurrencies in the retail and commercial marketplace for goods or services. In comparison there is relatively large use by speculators, which contributes to price volatility.
Acceptance and/or widespread use of Bitcoin is uncertain. Currently, there is a relatively small use of Bitcoin and/or other cryptocurrencies in the retail and commercial marketplace for goods or services. In comparison there is relatively large use by speculators, which contributes to price volatility.
The relative lack of acceptance of cryptocurrencies in the retail and commercial marketplace limits the ability of end-users to use them to pay for goods and services.
The relative lack of acceptance of Bitcoin in the retail and commercial marketplace limits the ability of end-users to use them to pay for goods and services.
Ownership of, holding or trading in cryptocurrencies may then be considered illegal and subject to sanction. Governments may also take regulatory action that may increase the cost and/or subject cryptocurrency companies to additional regulation.
Ownership of, holding or trading in cryptocurrencies may then be considered illegal and subject to sanction. Governments may also take regulatory action that may increase the cost and/or subject Bitcoin mining companies to additional regulation.
Failure to comply with any of these laws and regulations or changes in this regulatory environment, including changing interpretations and the implementation of new or varying regulatory requirements by the government, may result in significant financial penalties, reputational harm or change the manner in which we currently conduct some aspects of our business, which could adversely affect our business, financial condition or results of operations.
Failure to comply with any of these laws and regulations or changes in this regulatory environment, including changing interpretations and the implementation of new or varying regulatory requirements by the government, may result in significant financial penalties, reputational harm or change the manner in which we currently conduct some aspects of our business, which could adversely affect our business, financial condition or results of operations. 32 Failure to comply with, or changes in, laws, regulations and enforcement activities may adversely affect the products, services and markets in which we operate.
Our certificate of incorporation and bylaws: ● provide that vacancies on our board of directors, including newly created directorships, may be filled only by a majority vote of directors then in office; ● provide that special meetings of stockholders may be called by a majority vote of our board of directors or at least 25% of shares held by our stockholders; ● not provide stockholders with the ability to cumulate their votes; and ● provide that a majority of our stockholders (over 50%) and a vote by the majority of our board may amend our bylaws.
Our certificate of incorporation and bylaws: ● provide that vacancies on our board of directors, including newly created directorships, may be filled only by a majority vote of directors then in office; ● provide that special meetings of stockholders may be called by a majority vote of our board of directors or at least 25% of shares held by our stockholders; ● not provide stockholders with the ability to cumulate their votes; and ● provide that a majority of our stockholders (over 50%) and a vote by the majority of our board may amend our bylaws. 41 We do not expect to pay dividends for the foreseeable future.
In addition, delivery of new services in a cost-efficient manner depends upon many factors, and we may not generate anticipated revenue from such services. Disruptions in our networks and infrastructure may result in customer dissatisfaction, customer loss or both, which could materially and adversely affect our reputation and business. Our systems are an integral part of our customers’ business operations.
In addition, delivery of new services in a cost-efficient manner depends upon many factors, and we may not generate anticipated revenue from such services. 12 Disruptions in our networks and infrastructure may result in customer dissatisfaction, customer loss or both, which could materially and adversely affect our reputation and business.
If one or more of the analysts who elect to cover us downgrade our stock, our stock price could decline rapidly. If one or more of these analysts cease coverage of us, we could lose visibility in the market, which in turn could cause our stock price to decline.
If one or more of these analysts cease coverage of us, we could lose visibility in the market, which in turn could cause our stock price to decline.
While we expect to continue to build out our OmniSoft software business and to rely more heavily on individualized merchant services offerings and to generate revenue and to transition away from such significant reliance on our eVance business, there is no guarantee that we will be able to do so (particularly, giving effect to the impact of COVID-19).
While we expect to continue to build out our OmniSoft software business and to rely more heavily on individualized merchant services offerings and to generate revenue and to transition away from such significant reliance on our eVance business, there is no guarantee that we will be able to do so.
We cannot assure you that an active trading market for our common stock will develop, or if it does develop, that will be maintained. You may not be able to sell your securities quickly or at the market price if trading in our securities is not active.
There has been a very limited public market for our common stock. We cannot assure you that an active trading market for our common stock will develop, or if it does develop, that will be maintained. You may not be able to sell your securities quickly or at the market price if trading in our securities is not active.
Though this is a new market, we compete against a variety of entrants in the market as well likely new entrants into the market. Some of these follow a regulatory model that is different from ours and might provide them competitive advantages.
We face significant market competition. We facilitate online capital formation. Though this is a new market, we compete against a variety of entrants in the market as well likely new entrants into the market. Some of these follow a regulatory model that is different from ours and might provide them competitive advantages.
These trends could include: ● declining economies, foreign currency fluctuations and the pace of economic recovery can change consumer spending behaviors, such as cross-border travel patterns, on which the majority of our revenue is dependent; ● low levels of consumer and business confidence typically associated with recessionary environments, and those markets experiencing relatively high unemployment, may result in decreased spending by cardholders; ● budgetary concerns in the United States and other countries around the world could affect the United States and other specific sovereign credit ratings, impact consumer confidence and spending, and increase the risks of operating in those countries; ● emerging market economies tend to be more volatile than the more established markets we serve in North America and Europe, and adverse economic trends may be more pronounced in those emerging markets where we conduct business; ● financial institutions may restrict credit lines to cardholders or limit the issuance of new cards to mitigate cardholder credit concerns; ● uncertainty and volatility in the performance of our merchants’ businesses may make estimates of our revenues and financial performance less predictable; ● cardholders may decrease spending for value-added services we market and sell; ● a weakening in the economy, either due to the global COVID-19 outbreak or otherwise, has forced, and could continue to force merchants to close at higher than historical rates in part because many of them are not as well capitalized as larger organizations, which could expose us to potential credit losses and future transaction declines; and ● government intervention, including the effect of laws, regulations and government investments in our merchants, may have potential negative effects on our business and our relationships with our merchants or otherwise alter their strategic direction away from our products and services. 18 We are subject to U.S. governmental regulation and other legal obligations, particularly related to privacy, data protection and information security, and consumer protection laws across different markets where we conduct our business.
These trends could include: ● declining economies, foreign currency fluctuations and the pace of economic recovery can change consumer spending behaviors, such as cross-border travel patterns, on which the majority of our revenue is dependent; ● low levels of consumer and business confidence typically associated with recessionary environments, and those markets experiencing relatively high unemployment, may result in decreased spending by cardholders; ● budgetary concerns in the United States and other countries around the world could affect the United States and other specific sovereign credit ratings, impact consumer confidence and spending, and increase the risks of operating in those countries; ● emerging market economies tend to be more volatile than the more established markets we serve in North America and Europe, and adverse economic trends may be more pronounced in those emerging markets where we conduct business; ● financial institutions may restrict credit lines to cardholders or limit the issuance of new cards to mitigate cardholder credit concerns; ● uncertainty and volatility in the performance of our merchants’ businesses may make estimates of our revenues and financial performance less predictable; ● cardholders may decrease spending for value-added services we market and sell; ● government intervention, including the effect of laws, regulations and government investments in our merchants, may have potential negative effects on our business and our relationships with our merchants or otherwise alter their strategic direction away from our products and services. 18 We are subject to U.S. governmental regulation and other legal obligations, particularly related to privacy, data protection and information security, and consumer protection laws across different markets where we conduct our business.
If we fail to integrate our platform with new third-party offerings that our merchants need for their shops, or to adapt to the data transfer requirements of such third-party offerings, we may not be able to offer the functionality that our merchants and their customers expect, which would negatively impact our offerings and, as a result, harm our business.
If we fail to integrate our platform with new third-party offerings that our merchants need for their shops, or to adapt to the data transfer requirements of such third-party offerings, we may not be able to offer the functionality that our merchants and their customers expect, which would negatively impact our offerings and, as a result, harm our business. 31 State tax authorities may seek to assess state and local business taxes and sales and use taxes.
In addition, if we are unable to continue to meet the legal, regulatory and other requirements related to being a public company, we may not be able to maintain the listing of our common stock on The NASDAQ Capital Market, which would likely have a material adverse effect on the trading price of our common stock.
In addition, if we are unable to continue to meet the legal, regulatory and other requirements related to being a public company, we may not be able to maintain the listing of our common stock on The NASDAQ Capital Market, which would likely have a material adverse effect on the trading price of our common stock. 42 Securities analysts may not continue to provide coverage of our common stock or may issue negative reports, which may have a negative impact on the market price of our common stock.
We currently operate our business only in the United States. We are subject to anti-corruption laws and regulations, including the FCPA, and other laws that prohibit the making or offering of improper payments to foreign government officials and political figures, including anti-bribery provisions enforced by the Department of Justice and accounting provisions enforced by the SEC.
We are subject to anti-corruption laws and regulations, including the FCPA, and other laws that prohibit the making or offering of improper payments to foreign government officials and political figures, including anti-bribery provisions enforced by the Department of Justice and accounting provisions enforced by the SEC.
Such lack of acceptance or decline in acceptances would have a material adverse effect on our ability to pursue this business segment at all, which would have a material adverse effect on our business, prospects or operations and potentially the value of any cryptocurrencies we hold or expect to acquire for our own account.
Such lack of acceptance or decline in acceptances would have a material adverse effect on our ability to pursue this business segment at all, which would have a material adverse effect on our business, prospects or operations and potentially the value of any Bitcoin we hold or expect to acquire for our own account. 36 Transactional fees may decrease demand for Bitcoin and prevent expansion.
As a result, any such issuances or exercises would dilute your interest in the Company and the per share book value of the common stock that you owned, either of which could negatively affect the trading price of our common stock and the value of your investment. 43 Shares eligible for future sale may adversely affect the market for our common stock.
As a result, any such issuances or exercises would dilute your interest in the Company and the per share book value of the common stock that you owned, either of which could negatively affect the trading price of our common stock and the value of your investment.
Any failure to adequately enforce or provide these protective measures could result in liability, protracted and costly litigation, governmental and card network intervention and fines and, with respect to misuse of personal information of our merchants and consumers, lost revenue and reputational harm. 19 Any type of security breach, attack or misuse of data described above or otherwise, whether experienced by us or an associated third party, could harm our reputation and deter existing and prospective merchants from using our services or from making electronic payments generally, increase our operating expenses in order to contain and remediate the incident, expose us to unbudgeted or uninsured liability, disrupt our operations (including potential service interruptions), distract our management, increase our risk of regulatory scrutiny, result in the imposition of penalties and fines under state, federal and foreign laws or by card networks and adversely affect our continued card network registration and financial institution sponsorship.
Any type of security breach, attack or misuse of data described above or otherwise, whether experienced by us or an associated third party, could harm our reputation and deter existing and prospective merchants from using our services or from making electronic payments generally, increase our operating expenses in order to contain and remediate the incident, expose us to unbudgeted or uninsured liability, disrupt our operations (including potential service interruptions), distract our management, increase our risk of regulatory scrutiny, result in the imposition of penalties and fines under state, federal and foreign laws or by card networks and adversely affect our continued card network registration and financial institution sponsorship.
Our stock price could be subject to wide fluctuations in response to a variety of factors, which include: ● whether we achieve our anticipated corporate objectives; ● actual or anticipated fluctuations in our quarterly or annual operating results; ● changes in financial or operational estimates or projections; ● termination of the lock-up agreement or other restrictions on the ability of our stockholders and other security holders to sell shares; ● changes in the economic performance or market valuations of companies similar to ours; and ● general economic or political conditions in the United States or elsewhere.
Our stock price could be subject to wide fluctuations in response to a variety of factors, which include: ● whether we achieve our anticipated corporate objectives; ● actual or anticipated fluctuations in our quarterly or annual operating results; ● changes in financial or operational estimates or projections; ● changes in the economic performance or market valuations of companies similar to ours; and ● general economic or political conditions in the United States or elsewhere.
Transactional fees may decrease demand for Bitcoin and prevent expansion. As the number of Bitcoin awarded for solving a block in a blockchain decreases, the incentive for miners to continue to contribute to the bitcoin network will transition from a set reward to transaction fees.
As the number of Bitcoin awarded for solving a block in a blockchain decreases, the incentive for miners to continue to contribute to the Bitcoin network will transition from a set reward to transaction fees.
Because certain principal stockholders own a large percentage of our voting stock, other stockholders’ voting power may be limited. As of March 28, 2023, Ronny Yakov, our chief executive officer, owned or controlled approximately 33.04% of our outstanding voting stock. Accordingly, Mr.
Because certain principal stockholders own a large percentage of our voting stock, other stockholders’ voting power may be limited. As of April 8, 2024, Ronny Yakov, our chief executive officer, owned or controlled approximately 32.65% of our outstanding voting stock. Accordingly, Mr.
The regulatory framework for online capital formation or crowdfunding is very new. The regulations that govern the companies and broker-dealers that utilize our platform and the investors that find investment opportunities on our platform have been in existence for a very few years. Further, there are constant discussions among legislators and regulators with respect to changing this regulatory environment.
The regulations that govern the companies and broker-dealers that utilize our platform and the investors that find investment opportunities on our platform have been in existence for a very few years. Further, there are constant discussions among legislators and regulators with respect to changing this regulatory environment. New laws and regulations could be adopted in the United States and abroad.
The principal types of offerings that are posted on our platform are pursuant to Regulation A and Regulation Crowdfunding (CF) which have only been in effect in their current form since 2015 and 2016, respectively.
The types of offerings that we expect to be posted on our platform are relatively new in an industry that is still quickly evolving . The principal types of offerings that are posted on our platform are pursuant to Regulation A and Regulation Crowdfunding (CF) which have only been in effect in their current form since 2015 and 2016, respectively.
In addition, in times of economic distress, various regulators in the markets we serve have acquired and in the future may acquire financial institutions, including banks with which we partner.
The banking industry remains subject to consolidation regardless of overall economic conditions. In addition, in times of economic distress, various regulators in the markets we serve have acquired and in the future may acquire financial institutions, including banks with which we partner.
Decreased use and demand for Bitcoin may adversely affect its value and result in a reduction in the price of bitcoin and the value of our securities. 40 Cryptocurrency inventory, including that maintained by or for us, may be exposed to cybersecurity threats and hacks.
Decreased use and demand for Bitcoin may adversely affect its value and result in a reduction in the price of Bitcoin and the value of our securities. Bitcoin inventory, including that maintained by or for us, may be exposed to cybersecurity threats and hacks. As with any computer code generally, flaws in Bitcoin codes may be exposed by malicious actors.
As an “emerging growth company” under applicable law, we will be subject to lessened disclosure requirements, which could leave our stockholders without information or rights available to stockholders of more mature companies.
Further, he may make decisions that are adverse to your interests. 40 As an “emerging growth company” under applicable law, we will be subject to lessened disclosure requirements, which could leave our stockholders without information or rights available to stockholders of more mature companies.
This may also cause the market price of our common stock to decline. 45 We incur substantial costs as a result of being a public company and our management expects to devote substantial time to public company compliance programs. As a public company, we incur significant legal, insurance, accounting and other expenses, including costs associated with public company reporting.
We incur substantial costs as a result of being a public company and our management expects to devote substantial time to public company compliance programs. As a public company, we incur significant legal, insurance, accounting and other expenses, including costs associated with public company reporting.
In the absence of a public trading market: ● you may not be able to liquidate your investment in our securities; ● you may not be able to resell your securities at or above the public offering price; ● the market price of our common stock may experience more price volatility; and ● there may be less efficiency in carrying out your purchase and sale orders. 42 The market price of our common stock may be highly volatile, and you could lose all or part of your investment.
In the absence of a public trading market: ● you may not be able to liquidate your investment in our securities; and ● the market price of our common stock may experience more price volatility. The market price of our common stock may be highly volatile, and you could lose all or part of your investment.
Under the Securities Act and the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), issuers making offerings through our platform may be liable for including untrue statements of material facts or for omitting information that could make the statements made misleading. This liability may also extend in Regulation Crowdfunding offerings to funding portals.
We may be liable for misstatements made by issuers on our platform. Under the Securities Act and the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), issuers making offerings through our platform may be liable for including untrue statements of material facts or for omitting information that could make the statements made misleading.
The factors include, but are not limited to: ● Continued worldwide growth in the adoption and use of cryptocurrencies; ● Governmental and quasi-governmental regulation of cryptocurrencies and their use, or restrictions on or regulation of access to and operation of the network or similar cryptocurrency systems; ● Changes in consumer demographics and public tastes and preferences; ● Our ability to hire and retain employees or engage third-parties with experience in the cryptocurrency industry; ● The maintenance and development of the open-source software protocol of the network; ● The availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies; ● General economic conditions and the regulatory environment relating to digital assets; and ● Negative consumer sentiment and perception of bitcoin specifically and cryptocurrencies generally.
The factors include, but are not limited to: ● Continued worldwide growth in the adoption and use of cryptocurrencies; ● Governmental and quasi-governmental regulation of cryptocurrencies and their use, or restrictions on or regulation of access to and operation of the network or similar cryptocurrency systems; ● Changes in consumer demographics and public tastes and preferences; ● Our ability to hire and retain employees or engage third-parties with experience in the cryptocurrency industry; ● The maintenance and development of the open-source software protocol of the network; ● The availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies; ● General economic conditions and the regulatory environment relating to digital assets; and ● Negative consumer sentiment and perception of Bitcoin specifically and cryptocurrencies generally. 35 If any of those events occur, it may have a material adverse effect on our ability to pursue this business segment, which would have a material adverse effect on our business, prospects or operations and potentially the value of any cryptocurrencies we hold or expect to acquire for our own account and harm investors in our securities.
The termination of our member registration or our status as a certified service provider, or any changes in network rules or standards, including interpretation and implementation of the rules or standards, that increase the cost of doing business or limit our ability to provide transaction processing services to or through our merchants or partners, could adversely affect our business, financial condition or results of operations. 24 As such, we and our merchants are subject to card network rules that could subject us or our merchants to a variety of fines or penalties that may be levied by card networks for certain acts or omissions by us.
The termination of our member registration or our status as a certified service provider, or any changes in network rules or standards, including interpretation and implementation of the rules or standards, that increase the cost of doing business or limit our ability to provide transaction processing services to or through our merchants or partners, could adversely affect our business, financial condition or results of operations.
Notwithstanding the foregoing, management has concluded that it has sufficient liquidity to continue operations for a period of at least twelve months from the date of this Annual Report, which conclusion would not have been possible without close monitoring of the Company’s projected cash flow and operating expenses for a period of at least the next twelve months.
Notwithstanding the foregoing, management has concluded that it has sufficient liquidity to continue operations for a period of at least twelve months from the date of this Annual Report, which conclusion would not have been possible without close monitoring of the Company’s projected cash flow and operating expenses for a period of at least the next twelve months. 11 We have historically relied on related parties and affiliates to finance our operations, but there is no guarantee that these parties will continue to finance our operations in the future.
Failure to comply with laws and regulations applicable to our business may result in the suspension or revocation of licenses or registrations, the limitation, suspension or termination of services or the imposition of consent orders or civil and criminal penalties, including fines which could adversely affect our business, financial condition or results of operations. 36 We are also subject to U.S. financial services regulations, a myriad of consumer protection laws, including economic sanctions, laws and regulations, anticorruption laws, escheat regulations and privacy and information security regulations.
Failure to comply with laws and regulations applicable to our business may result in the suspension or revocation of licenses or registrations, the limitation, suspension or termination of services or the imposition of consent orders or civil and criminal penalties, including fines which could adversely affect our business, financial condition or results of operations.
In the event we experience fraud, security failures, operational issues or similar events such factors would have a material adverse effect on our ability to continue as a going concern or to pursue this segment at all, which would have a material adverse effect on our business, prospects and operations.
In the event we experience fraud, security failures, operational issues or similar events such factors would have a material adverse effect on our ability to continue as a going concern or to pursue this segment at all, which would have a material adverse effect on our business, prospects and operations. 34 Regulatory changes or actions may alter the nature of an investment in us or restrict the use of cryptocurrencies in a manner that adversely affects our business, prospects or operations.
As of March 29, 2023, there are 8,563,127 warrants to purchase shares of our common stock outstanding (with a weighted average exercise price of $5.02) and 2,362,321 outstanding options to purchase shares of common stock (with a weighted average exercise price of $0.0064).
Shares eligible for future sale may adversely affect the market for our common stock. As of April 8, 2024, there are 8,563,127 warrants to purchase shares of our common stock outstanding (with a weighted average exercise price of $5.02) and 2,362,321 outstanding options to purchase shares of common stock (with a weighted average exercise price of $0.0064).
Securities analysts may not continue to provide coverage of our common stock or may issue negative reports, which may have a negative impact on the market price of our common stock. Since completing our public offering of shares of our common stock in August 2020, a limited number of securities analysts have been providing research coverage of our common stock.
Since completing our public offering of shares of our common stock in August 2020, a limited number of securities analysts have been providing research coverage of our common stock. If securities analysts do not continue to cover our common stock, the lack of research coverage may cause the market price of our common stock to decline.
If search engines modify their algorithms, our website and our merchants’ shops may appear less prominently or not at all in search results, which could result in reduced traffic to our website and to our merchants’ shops. 31 Additionally, if the price of marketing our solutions over search engines or social networking sites increases, we may incur additional marketing expenses or may be required to allocate a larger portion of our marketing spend to search engine marketing and our business and operating results could be adversely affected.
Additionally, if the price of marketing our solutions over search engines or social networking sites increases, we may incur additional marketing expenses or may be required to allocate a larger portion of our marketing spend to search engine marketing and our business and operating results could be adversely affected.
If we are unable to scale our support functions to address the growth of our merchant and partner network, the quality of our support may decrease, which could adversely affect our ability to attract and retain merchants and partners. 20 Acquisitions create certain risks and may adversely affect our business, financial condition or results of operations.
If we are unable to scale our support functions to address the growth of our merchant and partner network, the quality of our support may decrease, which could adversely affect our ability to attract and retain merchants and partners. 20 Continued consolidation in the banking industry could adversely affect our growth.
We do not expect to pay dividends for the foreseeable future. We do not expect to pay dividends on our common stock offered in this transaction for the foreseeable future. Accordingly, any potential investor who anticipates the need for current dividends should not purchase our securities.
We do not expect to pay dividends on our common stock offered in this transaction for the foreseeable future. Accordingly, any potential investor who anticipates the need for current dividends should not purchase our securities. Risks Related to Public Companies Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our securities.
If securities analysts do not continue to cover our common stock, the lack of research coverage may cause the market price of our common stock to decline. The trading market for our common stock may be affected in part by the research and reports that industry or financial analysts publish about our business.
The trading market for our common stock may be affected in part by the research and reports that industry or financial analysts publish about our business. If one or more of the analysts who elect to cover us downgrade our stock, our stock price could decline rapidly.
In addition, the ownership of Mr. Yakov could preclude any unsolicited acquisition of us, and consequently, adversely affect the price of our common stock. Further, he may make decisions that are adverse to your interests.
In addition, the ownership of Mr. Yakov could preclude any unsolicited acquisition of us, and consequently, adversely affect the price of our common stock.
For instance over the past year, there have been several attempts to modify the current regulatory regime. Some of those suggested reforms could make it easier for anyone to sell securities (without using our platform), or could increase our regulatory burden, including requiring us to register as a broker-dealer or funding portal before we choose to do so.
Some of those suggested reforms could make it easier for anyone to sell securities (without using our platform), or could increase our regulatory burden, including requiring us to register as a broker-dealer or funding portal before we choose to do so. Any such changes would have a negative impact on our business.
Changes to legal rules and regulations, or interpretation or enforcement of them, could have a negative financial effect on us. Any lack of legal certainty exposes our operations to increased risks, including increased difficulty in enforcing our agreements in those jurisdictions and increased risks of adverse actions by local government authorities, such as expropriations.
Any lack of legal certainty exposes our operations to increased risks, including increased difficulty in enforcing our agreements in those jurisdictions and increased risks of adverse actions by local government authorities, such as expropriations.
If our customers make fewer sales of products and services using electronic payments, or consumers spend less money through electronic payments, whether due to the outbreak of COVID-19 or otherwise, we will have fewer transactions to process at lower dollar amounts, resulting in lower revenue.
If our customers make fewer sales of products and services using electronic payments, or consumers spend less money through electronic payments, we will have fewer transactions to process at lower dollar amounts, resulting in lower revenue. Adverse economic trends will and may continue to accelerate the timing, or increase the impact of, risks to our financial performance.
Any problems experienced by these third parties, including those resulting from breakdowns or other disruptions in the services provided by such parties or cyber-attacks and security breaches, could adversely affect our ability to service our merchant customers or otherwise conduct our business.
Any problems experienced by these third parties, including those resulting from breakdowns or other disruptions in the services provided by such parties or cyber-attacks and security breaches, could adversely affect our ability to service our merchant customers or otherwise conduct our business. 19 We could also be subject to liability for claims relating to misuse of personal information, such as unauthorized marketing purposes and violation of data privacy laws.
As with any computer code generally, flaws in cryptocurrency codes may be exposed by malicious actors. Cryptocurrencies are held in software wallets, which may be subject to cyberattacks. Several errors and defects have been found previously, including those that disabled some functionality for users and exposed users’ information.
Bitcoin are held in software wallets, which may be subject to cyberattacks. Several errors and defects have been found previously, including those that disabled some functionality for users and exposed users’ information. Exploitations of flaws in the source code that allow malicious actors to take or create money have previously occurred.
Our efforts to expand into new geographic regions may not be successful, which could limit our ability to grow our business. 34 Risks Related to Laws and Regulations Failure to comply with the U.S. Foreign Corrupt Practices Act, or the FCPA, anti-money laundering, economic and trade sanctions regulations, and similar laws could subject us to penalties and other adverse consequences.
Risks Related to Laws and Regulations Failure to comply with the U.S. Foreign Corrupt Practices Act, or the FCPA, anti-money laundering, economic and trade sanctions regulations, and similar laws could subject us to penalties and other adverse consequences. We currently operate our business only in the United States.
Digital assets that are represented and trade on a ledger-based platform may not necessarily benefit from viable trading markets. Stock exchanges have listing requirements and vet issuers, requiring them to be subjected to rigorous listing standards and rules and monitoring investors transacting on such platform for fraud and other improprieties.
Stock exchanges have listing requirements and vet issuers, requiring them to be subjected to rigorous listing standards and rules and monitoring investors transacting on such platform for fraud and other improprieties. These conditions may not necessarily be replicated on a distributed ledger platform, depending on the platform’s controls and other policies.
New laws and regulations could be adopted in the United States and abroad. Further, existing laws and regulations may be interpreted in ways that would impact our platform, including our ability to communicate and work with investors, broker-dealers and the companies that use our platforms’ services.
Further, existing laws and regulations may be interpreted in ways that would impact our platform, including our ability to communicate and work with investors, broker-dealers and the companies that use our platforms’ services. For instance over the past year, there have been several attempts to modify the current regulatory regime.
We expect to take advantage of these reporting exemptions until we are no longer an “emerging growth company.” Because of these lessened regulatory requirements, our stockholders would be left without information or rights available to stockholders of more mature companies. 44 Because we have elected to use the extended transition period for complying with new or revised accounting standards for an “emerging growth company” our financial statements may not be comparable to companies that comply with public company effective dates.
Because we have elected to use the extended transition period for complying with new or revised accounting standards for an “emerging growth company” our financial statements may not be comparable to companies that comply with public company effective dates.
The effect of any future regulatory change on our business or any cryptocurrency that may impact our business is impossible to predict, but such change could be substantial and may have a material adverse effect on our business, prospects and operations. 38 The development and acceptance of cryptographic and algorithmic protocols governing the issuance of and transactions in cryptocurrencies is subject to a variety of factors that are difficult to evaluate.
The effect of any future regulatory change on our business or any Bitcoin mining operation that may impact our business is impossible to predict, but such change could be substantial and may have a material adverse effect on our business, prospects and operations.
These conditions may not necessarily be replicated on a distributed ledger platform, depending on the platform’s controls and other policies. The more lax a distributed ledger platform is about vetting issuers of digital assets or users that transact on the platform, the higher the potential risk for fraud or the manipulation of digital assets.
The more lax a distributed ledger platform is about vetting issuers of digital assets or users that transact on the platform, the higher the potential risk for fraud or the manipulation of digital assets. These factors may decrease liquidity or volume, or increase volatility of digital securities or other assets trading on a ledger-based system.
It is critical for our customers, that our systems provide a continued and uninterrupted performance. Customers may be dissatisfied by any system failure that interrupts our ability to provide services to them. Sustained or repeated system failures would reduce the attractiveness of our services significantly and could result in decreased demand for our services.
Our systems are an integral part of our customers’ business operations. It is critical for our customers, that our systems provide a continued and uninterrupted performance. Customers may be dissatisfied by any system failure that interrupts our ability to provide services to them.
Any changes to technologies used in our platform, to existing features that we rely on, or to operating systems or internet browsers that make it difficult for merchants to access our platform or consumers to access our merchants’ shops, may make it more difficult for us to maintain or increase our revenues and could adversely impact our business and prospects. 28 The impact of worldwide economic conditions (including, for example, from the COVID-19 pandemic), including the resulting effect on spending by SMBs, may adversely affect our business, operating results and financial condition.
Any changes to technologies used in our platform, to existing features that we rely on, or to operating systems or internet browsers that make it difficult for merchants to access our platform or consumers to access our merchants’ shops, may make it more difficult for us to maintain or increase our revenues and could adversely impact our business and prospects. 28 or We may be unable to obtain, maintain and protect our intellectual property rights and proprietary information or prevent third-parties from making unauthorized use of our technology.
The diversion of our management’s attention and any delays or difficulties encountered in connection with the integration of Excel could adversely affect our business, financial condition or results of operations. 11 The substantial and continuing losses, and significant operating expenses incurred in the past few years may cause us to be unable to pursue all of our operational objectives if sufficient financing and/or additional cash from revenues is not realized.
Risks Related to Our Company The substantial and continuing losses, and significant operating expenses incurred in the past few years may cause us to be unable to pursue all of our operational objectives if sufficient financing and/or additional cash from revenues is not realized. We have limited cash resources and operating losses throughout our history.
Our compliance is focused on U.S. laws and we have not analyzed foreign laws regarding the participation of non-U.S. residents. Some of the investment opportunities posted on our platform are open to non-U.S. residents.
Some of the investment opportunities posted on our platform are open to non-U.S. residents. We have not researched all the applicable foreign laws and regulations, and therefore we have not set up our structure to be compliant with all those laws.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe initial term of the Agreement is for one year, commencing September 1, 2022 and expiring August 31, 2023 with an automatic extension of the term of the Company does not provide at least 60 days prior notice to the end of the term. On August 16, 2022, DMINT Real Estate Holdings, Inc.
Biggest changeThe initial term of the Agreement is for one year, commenced on September 1, 2022 and on August 31, 2023 the term automatically extended on a month-to-month basis and will continue to automatically extend monthly if the Company does not provide at least 60 days prior notice. On August 16, 2022, DMINT Real Estate Holdings, Inc.
The location is expected to have capacity for up to 5,000 mining machines. 46 eVance, Inc. rents approximately 4,277 square feet of property located at 960 Northpoint Parkway, Alpharetta, Georgia, Suite 400. The term of the Lease is for thirty-nine (39) months commencing September 1, 2020.
The location is expected to have capacity for up to 5,000 mining machines. eVance, Inc. rents approximately 4,277 square feet of property located at 960 Northpoint Parkway, Alpharetta, Georgia, Suite 400. The term of the Lease is for thirty-nine (39) months commencing September 1, 2020.
Item 2. Property For our corporate headquarters we currently rent shared office space at 1120 Avenue of the Americas, 4 th Floor, New York, New York which can be 150 square feet. T he monthly services fee is $2,765.00 with a communications fee of $100 per month.
Item 2. Property For our corporate headquarters we currently rent shared office space at 1120 Avenue of the Americas, 4 th Floor, New York, New York which can be 150 square feet. The monthly services fee is $2,765.00 with a communications fee of $100 per month.
Removed
DMINT has 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 are each for a term of five years, ending on the later of the date of occupancy and November 10, 2026.
Removed
The monthly base rent for “Cell 3”, comprising 4,000 square feet, is $1,666.67 per month. The monthly base rent for “Cell 4”, comprising 6,000 square feet, is $2,500 per month. The total rent for the entire lease term of the Leases is $250,000 and $8,767.85 is payable as a security deposit.
Removed
DMINT is currently finalizing negotiations of an early termination of the Leases as it has moved all operating Bitcoin mining computers to its Selmer, TN location. The Company also leases approximately 778 square feet at 3301 North Third, Abilene, Taylor County, Texas at $740 per month. The lease is a month-to-month rental which can be terminated at any time.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeLegal Proceedings Other than ongoing litigation with FFS relating to a breach of contract in connection with the Acquired Merchant Portfolio, there are no material claims, actions, suits, proceedings, or investigations that are currently pending or, to the Company’s knowledge, threatened by or against the Company or respecting its operations or assets, or by or against any of the Company’s officers, directors, or affiliates.
Biggest changeOther than discussed above, there are no material claims, actions, suits, proceedings, or investigations that are currently pending or, to the Company’s knowledge, threatened by or against the Company or respecting its operations or assets, or by or against any of the Company’s officers, directors, or affiliates. Item 4. Mine Safety Disclosures Not applicable. 44 PART II.
Removed
Item 4. Mine Safety Disclosures Not applicable. 47 PART II.
Added
Item 3. Legal Proceedings The Company is engaged ongoing litigation with FFS relating to a breach of contract in connection with the Acquired Merchant Portfolio whereby the Company is making a claim to recover the purchase price of the Acquired Merchant Portfolio and FFS is claiming to be paid the full purchase price of the Acquired Merchant Portfolio,.
Added
In addition, in connection with the litigation with FFS, the Company has also made a claim against Clear Fork Bank (the “Bank”), the payment processing bank for the Acquired Merchant Portfolio, for damages the Company suffered as a result of it having to cease processing transactions for the merchants underlying the Acquired Merchant Portfolio.
Added
The Bank has filed a counterclaim for fees incurred by it in connection with the transactions processed since the acquisition of the Acquired Merchant Portfolio by the Company. However, the damages claimed have been materially reduced over time due to account balancing which was not completed at the time of the counterclaim.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe transfer agent and registrar for our common stock is Transfer Online, Inc., 317 SW Alder Street, 2nd Floor Portland, OR 97204. Their telephone number is (503) 227-2950. 48 Dividend Policy We have never paid any cash dividends and intend, for the foreseeable future, to retain any future earnings for the development of our business.
Biggest changeTheir telephone number is (503) 227-2950. Dividend Policy We have never paid any cash dividends and intend, for the foreseeable future, to retain any future earnings for the development of our business. Our Board of Directors will determine our future dividend policy on the basis of various factors, including our results of operations, financial condition, capital requirements and investment opportunities.
Our Board of Directors will determine our future dividend policy on the basis of various factors, including our results of operations, financial condition, capital requirements and investment opportunities. Recent Issuance of Unregistered Securities None. Securities Authorized for Issuance Under Equity Compensation Plans None. Item 6. [Reserved]
Recent Issuance of Unregistered Securities None. Securities Authorized for Issuance Under Equity Compensation Plans None. Item 6. [Reserved]
Removed
The range of reported high and reported low sales prices per share for our common stock for each fiscal quarter during 2022 and 2021, as reported by NASDAQ and the OTC Markets Group, is set forth below.
Added
At April [*], 2024 there were approximately 365 holders of record of our common stock, although we believe that there are other persons who are beneficial owners of our common stock held in street name. The transfer agent and registrar for our common stock is Transfer Online, Inc., 317 SW Alder Street, 2nd Floor Portland, OR 97204.
Removed
Quarterly common stock Price Ranges Fiscal Year 2022, Quarter Ended: High Low March 31, 2022 $ 2.79 $ 1.36 June 30, 2022 $ 1.63 $ 0.85 September 30, 2022 $ 2.50 $ 0.91 December 31, 2022 $ 1.22 $ 0.71 Fiscal Year 2021, Quarter Ended: High Low March 31, 2021 $ 16.04 $ 4.30 June 30, 2021 $ 7.98 $ 4.30 September 30, 2021 $ 6.65 $ 3.30 December 31, 2021 $ 6.53 $ 2.51 At March 28, 2023 there were approximately 367 holders of record of our common stock, although we believe that there are other persons who are beneficial owners of our common stock held in street name.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. [Reserved] 49 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation 49 Item 7A. Quantitative and Qualitative Disclosure About Market Risk 52 Item 8. Financial Statements and Supplementary Data F-1 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 53 Item 9A. Controls and Procedures 53
Biggest changeItem 6. [Reserved] 45 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation 45 Item 7A. Quantitative and Qualitative Disclosure About Market Risk 48 Item 8. Financial Statements and Supplementary Data F-1 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 49 Item 9A. Controls and Procedures 49

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeDMINT initiated the first phase of the Bitcoin mining operation by placing data centers and ASIC-based Antminer S19J Pro mining computers specifically configured to mine Bitcoin in Pennsylvania. As of December 31, 2022, DMINT has purchased 1,000 computers. In February 2023, it re-deployed all of the computers to its Selmer, Tennessee location.
Biggest changeOn 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 a result of (a) the improved transaction volume trends the Company experienced during 2021 and 2022, (b) the increase in the number of merchants after the acquisitions of several portfolios during 2021, and (c) the funds received from the capital raises and PPP Loan, as discussed above, the Company believes it has sufficient liquidity in order to sustain operations for at least the twelve months following the filing of this Annual Report.
As a result of (a) the improved transaction volume trends the Company experienced during 2022 and 2023, (b) the increase in the number of merchants after the acquisitions of several portfolios during 2021 and 2023, and (c) the funds received from the capital raises and PPP Loan, as discussed above, the Company believes it has sufficient liquidity in order to sustain operations for at least the twelve months following the filing of this Annual Report.
The Company has reviewed its cash flow activity during 2022 and projected cash flow forecast for 2023 and performed an overall analysis of market trends to determine whether or not it has sufficient liquidity to continue as a going concern for a period of at least twelve months from the date of this Annual Report.
The Company has reviewed its cash flow activity during 2023 and projected cash flow forecast for 2024 and performed an overall analysis of market trends to determine whether or not it has sufficient liquidity to continue as a going concern for a period of at least twelve months from the date of this Annual Report.
Critical Accounting Policies Refer to Note 2 of our financial statements contained elsewhere in this Form 10-K for a summary of our critical accounting policies and recently adopting and issued accounting standards.
Significant Accounting Policies Refer to Note 2 of our financial statements contained elsewhere in this Form 10-K for a summary of our significant accounting policies and recently adopting and issued accounting standards.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation The following discussion and analysis of our consolidated financial condition and results of operations for years ended December 31, 2022 and 2021 should be read in conjunction with the consolidated financial statements and notes related thereto included elsewhere in this report.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation The following discussion and analysis of our consolidated financial condition and results of operations for years ended December 31, 2023 and 2023 should be read in conjunction with the consolidated financial statements and notes related thereto included elsewhere in this report.
Liquidity and Capital Resources Changes in Cash Flows For the year ended December 31, 2022, we used $1,921,318 of cash in operating activities, which included our net loss offset by $6,858,171 for amortization and depreciation expense, $624,683 for stock-based compensation, stock to be issued for services of $164,999 and net changes in operating assets and liabilities of ($1,781,965).
For the year ended December 31, 2022, we used $1,921,318 of cash in operating activities, which included our net loss offset by $6,858,171 for amortization and depreciation expense, $624,683 for stock-based compensation, stock to be issued for services of $164,999 and net changes in operating assets and liabilities of ($1,781,965). 47 For the year ended December 31, 2023, we used $2,080,113 of cash used for investing activities.
Our net loss for year ended December 31, 2022, was $7,787,269 compared to $4,978,358 for year ended December 31, 2021. We had an increase in our net loss of $2,808,911 for the reasons discussed above.
Our net loss for year ended December 31, 2023, was $23,273,939 compared to $7,787,269 for year ended December 31, 2022. We had an increase in our net loss of $15,486,670 for the reasons discussed above.
While 20% of the net proceeds of $5.5 million was used to repay a portion of our outstanding Term Loan, immediately following the Offering, the Company had cash of $5.6 million on hand.
In addition, the underwriter fully exercised its option to purchase 210,000 Series A warrants and 52,500 Series B warrants. While 20% of the net proceeds of $5.5 million was used to repay a portion of our outstanding Term Loan, immediately following the Offering, the Company had cash of $5.6 million on hand.
Results of Operations Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 For the year ended December 31, 2022, we had total revenue of $30,368,979 compared to $16,710,759 of revenue for the year ended December 31, 2021, an increase of $13,140,159 or 83.1%.
Results of Operations Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 For the year ended December 31, 2023, we had total revenue of $30,571,637 compared to $30,368,979 of revenue for the year ended December 31, 2022, an increase of $202,658 or 0.1%.
At December 31, 2022, DMINT had mined 31.06 Bitcoin. On January 3, 2022, the Company entered into a share exchange agreement with all of the shareholders of Crowd Ignition, Inc.
As of December 31, 2022, DMINT has purchased 1,000 computers. In February 2023, it re-deployed all of the computers to its Selmer, Tennessee location. At December 31, 2023, DMINT had mined 31.06 Bitcoin. On January 3, 2022, the Company entered into a share exchange agreement with all of the shareholders of Crowd Ignition, Inc.
Insurance expense has increased as a result of the cost to insure the Bitcoin mining machines and the increase in the size of the Company’s business.
Some of our larger G&A expenses include insurance policy expense of $404,400 from $319,500 in the prior year. Insurance expense has increased as a result of the cost to insure the Bitcoin mining machines and the increase in the size of the Company’s business.
Amortization and depreciation expense for the year ended December 31, 2022 was $3,664,488 compared to $1,703,401 for the year ended December 31, 2021, an increase of $1,961,087 or 115.1%. We record amortization expense on our merchant portfolio, trademarks and natural gas purchase rights.
Processing and servicing costs decreased in conjunction with the decreased revenue. 46 Amortization and depreciation expense for the year ended December 31, 2023 was $4,172,117 compared to $3,664,488 for the year ended December 31, 2022, an increase of $507,629 or 13.9%. We record amortization expense on our merchant portfolio, trademarks and natural gas purchase rights.
(“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. 49 On May 14, 2021, the Company formed OLBit, Inc., a wholly owned subsidiary (“OLBit”).
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.
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. On May 22, 2020, the Company purchased certain assets from POSaBIT Inc.
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. 45 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”).
We earned $28,950,785 in transaction and processing fees, $64,900 in merchant equipment sales, $627,115 in other revenue from monthly recurring subscriptions and $726,179 of other revenue from the Cryptocurrency Mining segment, compared to $15,810,626 in transaction and processing fees, $131,802 in merchant equipment sales, $464,327 in other revenue from monthly recurring subscriptions and $304,004 of other revenue from the Cryptocurrency Mining Segment.
We earned $27,096,245 in transaction and processing fees, $89,532 in merchant equipment sales, $312,565 in revenue from monthly recurring subscriptions, $538,718 of revenue from the Bitcoin Mining segment, and $2,534,577 of digital product revenue; compared to $28,950,785 in transaction and processing fees, $64,900 in merchant equipment sales, $627,1115 in revenue from monthly recurring subscriptions and $726,179 of revenue from the Bitcoin Mining Segment.
The Company sold 700,000 units consisting of (a) one share of our common stock; (b) two Series A Warrants, and (c) one-half of one Series B warrant. In addition, the underwriter fully exercised its option to purchase 210,000 Series A warrants and 52,500 Series B warrants.
On August 11, 2020, the Company closed an offering of its securities (the “Offering”) for gross proceeds of $6.45 million. The Company sold 700,000 units consisting of (a) one share of our common stock; (b) two Series A Warrants, and (c) one-half of one Series B warrant.
For the year ended December 31, 2022, we had processing and servicing costs of $23,152,397 compared to $13,480,212 of processing and servicing costs for the year ended December 31, 2021, an increase of $9,672,185 or 71.8%. Processing and servicing costs increased in conjunction with the increased revenue.
For the year ended December 31, 2023, we had processing and servicing costs of $21,181,499 compared to $23,152,397 of processing and servicing costs for the year ended December 31, 2022, a decrease of $1,970,898 or 8.5%.
We purchased $186,600 of office equipment and $9,410,000 of mining equipment for our DMINT subsidiary. For the year ended December 31, 2022, we received net cash of $447,429 from financing activities. We received a loan payable of $875,000, of which we repaid $317,571. For the year ended December 31, 2021, we received net cash of $28,815,530 from financing activities.
For the year ended December 31, 2022, we received net cash of $447,429 from financing activities. We received a loan payable of $875,000, of which we repaid $317,571 and used $110,000 in cash for the acquisition of treasury stock Liquidity and Capital Resources At December 31, 2023, the Company had cash of $179,006 and negative working capital of $5,413,927.
We also had travel expense $336,300 from $250,000 in the prior year, marketing and promotion of $210,000 from $180,000 in the prior year, contracted services of $656,000 from $511,000 in the prior year, utilities of $565,000 from $406,000 in the prior year and computer and internet expense of $730,000 from $515,000 in the prior year.
We had credit card processing and bank fees of $1,137,000 from $39,000 in the prior year, contracted services of $913,000 from $656,000 in the prior year, utilities of $679,500 from $565,000 in the prior year and computer and internet expense of $933,700 from $730,000 in the prior year.
Salary and wage expense for the year ended December 31, 2022 was $3,073,598 compared to $2,126,451 for the year ended December 31, 2021, an increase of $947,147 or 44.5%.
The majority of the decrease was due to reclassing items to construction in process and not deprecating miners until the construction on the Selmer, TN building is completed. Salary and wage expense for the year ended December 31, 2023 was $3,817,508 compared to $3,073,598 for the year ended December 31, 2022, an increase of $743,910 or 24.2%.
The increase is due to both new hires and salary increases to existing employees and management. 50 Professional fees for the year ended December 31, 2022 were $964,541 compared to $1,590,520 for the year ended December 31, 2021, a decrease of $625,979 or 39.4%. Professional fees consist mainly of audit and legal fees.
The increase is due to an increase in staff from the Cuentas SDI acquisition and also accrued bonus expense. Professional fees for the year ended December 31, 2023 were $2,336,785 compared to $964,541 for the year ended December 31, 2022, an increase of $1,372,244 or 142%. Professional fees consist mainly of audit and legal fees.
Our amortization expense for the year ended December 31, 2022, increased due to the agreement with Cai Energy to purchase natural gas to operate the Bitcoin mining computers used in the Cryptocurrency Mining segment. Depreciation expense for our Cryptocurrency Mining Segment was $3,193,683 for the year ended December 31, 2022 compared to $187,498 for the year ended December 31, 2021.
Our amortization expense for the year ended December 31, 2023, was higher due to a onetime adjustment. Depreciation expense for our Bitcoin Mining Segment was $2,560,015 for the year ended December 31, 2023 compared to $3,193,683 for the year ended December 31, 2022, a decrease of $633,668 or 19.8%.
For the year ended December 31, 2021, we used $3,508,082 of cash in operating activities, which included our net loss offset by $1,890,899 for amortization and depreciation expense, $461,051 for stock-based compensation, a gain on forgiveness of debt of $236,231 and net changes in operating assets and liabilities of ($648,117).
Liquidity and Capital Resources Changes in Cash Flows For the year ended December 31, 2023, we received $2,046,922 of cash in operating activities, which included our net loss offset by $6,732,132 for amortization and depreciation expense, $727,758 for stock-based compensation, impairment expense of $12,902,788, a realized gain of $288,584 from the sale of bitcoin of $288,584 and an unrealized gain on investment of $23,662 and net changes in operating assets and liabilities of $5,274,238.
For the year ended December 31, 2022, we used $1,562,361 of cash used for investing activities. We used $409,000 for plant and machinery, $1,062,000 for office equipment and $96,000 for leasehold improvements. 51 For the year ended December 31, 2021, we used $25,661,600 of cash used for investing activities.
We used $1,225,148 for property and equipment, $4,965 for purchase of intangible assets and $850,000 the purchase of an 80.01% interest in Cuentas SDI, LLC. For the year ended December 31, 2022, we used $1,562,361 of cash used for investing activities to acquire property and equipment.
General and Administrative (“G&A”) expense for the year ended December 31, 2022, was $4,490,731 compared to $2,387,416 for the year ended December 31, 2021, an increase of $2,103,315 or 88.1%. Some of our larger G&A expenses include insurance policy expense of $319,500 from $234,000 in the prior year.
Our increase in audit fees is primarily due to the stand-alone audit of our DMINT subsidiary in connection with the planned spin-off of the entity. General and Administrative (“G&A”) expense for the year ended December 31, 2023, was $7,078,947 compared to $4,490,731 for the year ended December 31, 2022, an increase of $2,588,216 or 57.6%.
We also had an increase in stock-based compensation of $328,641 for stock option expense. For the year ended December 31, 2022, we incurred $0 of interest expense, compared to $116,737 for the year ended December 31, 2021.
We also had an increase in stock-based compensation of $104,000 for stock option expense. For the year ended December 31, 2023, we had total impairment expense of $12,902,787. $12,642,857 was for the write down of the Acquired Merchant Portfolio. There was also an impairment of $259,931 related to the Bitcoin miners owned by DMINT.
Removed
The purpose of OLBit is to hold the Company’s assets and operate its business related to its emerging money transmission and transactional business. On July 23, 2021, we formed DMINT, Inc., a wholly owned subsidiary (“DMINT”) to operate in the cryptocurrency mining industry, specifically the mining of Bitcoin.
Added
In July 2019, we launched a new merchant and ISO boarding system that will be able to onboard merchants instantly.
Removed
The increase in revenue was a result of an increase in the amount of fees earned from merchant processing transactions primarily due to the revenue attributed to the merchant portfolio acquired in the fourth quarter ended December 31, 2021 and to increased revenue from Bitcoin mining.
Added
We had a decrease of revenue for our transaction and processing fees of $1,854,540, a decrease of $187,461 of bitcoin mining revenue and a decrease of $314,550 from the monthly recurring subscriptions. These decreases were offset with an increase in our digital product revenue of $2,534,577.
Removed
The decrease in the current period is due to a decrease in legal fees of approximately $575,000 and auditor expenses of approximately $51,500, compared with the prior period in which the Company completed an offering of its common stock and warrants.
Added
Transaction and processing revenue decreased due to a decrease in the in merchants and volume processed. Bitcoin revenue decreased due to the price of bitcoin dropping in 2023 compared to 2022. Monthly recurring subscription revenue decreased due to less subscriptions.
Removed
The decrease in interest expense is due the conversion of all related party debt and the repayment of the Term Loan in March 2021. In the prior year we also recognized a gain on the forgiveness of debt of $236,231 for our PPP loan and a $333,158 expense for litigation liability.
Added
The increase in the current period is due to an increase in legal fees of approximately $1,333,600 and auditor expenses of approximately $45,800. Our increase in legal fees can be attributed to the ongoing litigation relating to the FFS Acquired Merchant Portfolio.
Removed
Trends and Uncertainties The Company’s financial condition and results of operations for the next fiscal year 2022 may be adversely affected by a further prolonging of the COVID-19 pandemic. The New York and Atlanta areas, including the location of the Company’s corporate headquarters and its operations business, continued to experience impacts of the COVID-19 pandemic in the U.S.
Added
For the year ended December 31, 2023, we recognized a realized gain from the sale of bitcoin of $288,584 and an unrealized gain on investment of $23,662. We also had other income of $40,320 and interest expense of $148,483. In the prior year we had other income of $383,190.
Removed
The Company is currently following the recommendations of local health authorities to minimize exposure risk for its employees and visitors. However, the scale and duration of this pandemic remains unknown. If there was another increase in cases requiring quarantines or closures of businesses, the duration of the business disruption and related financial impact cannot be reasonably estimated at this time.
Added
For the year ended December 31, 2023, we used net cash of $221,829 in financing activities as a result of a cash overdraft obtained in an acquisition of $8,050 and payments on a note payable of $226,457 along with $12,678 in advances from related parties.
Removed
While the Company is currently implementing specific business continuity plans to reduce the potential impact of COVID-19 during 2022 and believe that its business being principally operated using digital platforms, in the long-term, will suffer minimal ongoing negative impact, there is no guarantee that the Company’s continuity plan will be successful, that the Company’s merchants will meet the number of forecasted transactions due to a change in consumer activity around point of sale purchasing resulting from the temporary closure of businesses in the future.
Removed
In 2021, as a result of the continued high transmission of COVID-19 cases requiring quarantines and convalescence of so many people, the Company experienced some disruptions to its business and disruptions for the Company’s customers and merchants that had an impact on the number of transactions processed by the Company.
Removed
The extent to which COVID-19 or any other health epidemic may impact the Company’s results for 2022 and beyond will depend on future developments and impacts of variants of the virus, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the continuing economic impact of the response to the COVID-19 pandemic.
Removed
Accordingly, COVID-19 could still have a material adverse effect on the Company’s business, results of operations, financial condition and prospects during 2022 and beyond.
Removed
We received a total of $8,090,709 from the exercise of warrants issued in the offerings, $16 from the exercise of options and we netted $28,379,650 from the sale of common stock and warrants. In addition, $7,654,845 was repaid on our loan to GACP.
Removed
Liquidity and Capital Resources At December 31, 2022, the Company had cash of $434,026 and negative working capital of $64,503. On August 11, 2020, the Company closed an offering of its securities (the “Offering”) for gross proceeds of $6.45 million.

Other OLB 10-K year-over-year comparisons