0001213900-22-047522.txt : 20220812 0001213900-22-047522.hdr.sgml : 20220812 20220812171639 ACCESSION NUMBER: 0001213900-22-047522 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 70 CONFORMED PERIOD OF REPORT: 20220630 FILED AS OF DATE: 20220812 DATE AS OF CHANGE: 20220812 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OLB GROUP, INC. CENTRAL INDEX KEY: 0001314196 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 133712553 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-39435 FILM NUMBER: 221161237 BUSINESS ADDRESS: STREET 1: 200 PARK AVENUE STREET 2: SUITE 1700 CITY: NEW YORK STATE: NY ZIP: 10166 BUSINESS PHONE: 212-278-0900 MAIL ADDRESS: STREET 1: 200 PARK AVENUE STREET 2: SUITE 1700 CITY: NEW YORK STATE: NY ZIP: 10166 10-Q 1 f10q0622_olbgroup.htm QUARTERLY REPORT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2022

 

 TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _______ to _______

 

Commission File Number: 000-52994

 

 

 

THE OLB GROUP, INC.

(Exact name of registrant as specified in its charter)

 

DELAWARE   13-4188568
(State or other jurisdiction of
incorporation or organization)
  (IRS Employer
Identification No.)

 

200 Park AvenueSuite 1700New YorkNY   10166
(Address of principal executive offices)   (Zip Code)

 

(212) 278-0900
(Registrant’s telephone number, including area code)

 

 
(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on
which registered
Common Stock, $0.0001 par value   OLB   The Nasdaq Capital Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer  Accelerated filer 
Non-accelerated filer  Smaller reporting company 
    Emerging growth company 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No 

 

As of August 11, 2022, there were 14,702,804 shares of the issuer’s common stock issued and outstanding. 

 

 

 

 

 

 

THE OLB GROUP, INC.

 

FORM 10-Q

 

For the Quarterly Period Ended June 30, 2022

 

INDEX

 

PART I Financial Information 1
Item 1. Financial Statements (unaudited) 1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 18
Item 3. Quantitative and Qualitative Disclosures about Market Risk 23
Item 4. Controls and Procedures 23
     
PART II Other Information 24
Item 1. Legal Proceedings 24
Item 1A. Risk Factors 24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 24
Item 3. Defaults Upon Senior Securities 24
Item 4. Mine Safety Disclosures 24
Item 5. Other Information 24
Item 6. Exhibits 24
Signatures 25

 

i

 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

INDEX TO FINANCIAL STATEMENTS

 

Condensed Consolidated Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021 2
   
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 20, 2022 and 2021 (unaudited) 3
   
Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2022, and 2021 (unaudited) 4
   
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021 (unaudited) 5
   
Notes to the Condensed Consolidated Financial Statements (unaudited) 6

 

1

 

 

The OLB Group, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

 

   June 30,
2022
   December 31,
2021
 
ASSETS  (Unaudited)     
Current Assets:        
Cash  $3,619,974   $3,470,339 
Accounts receivable, net   839,237    670,822 
Prepaid expenses   303,909    15,064 
Other current assets   1,201,656    729,351 
Total Current Assets   5,964,776    4,885,576 
           
Other Assets:          
Property and equipment, net   7,527,497    8,967,096 
Intangible assets, net   22,069,280    23,964,180 
Goodwill   6,858,216    6,858,216 
Operating lease right-of-use assets   336,864    402,538 
Other long-term assets   461,904    451,885 
Total Other Assets   37,253,761    40,643,915 
           
TOTAL ASSETS  $43,218,537   $45,529,491 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current Liabilities:          
Accounts payable  $631,001   $501,762 
Accrued expenses   86,231    416,182 
Merchant portfolio purchase installment obligation   2,000,000    2,000,000 
Operating lease liability – current portion   142,050    133,180 
Note payable – current portion   298,053    
 
Total Current Liabilities   3,157,335    3,051,124 
Long Term Liabilities:          
Notes payable, net of current portion   408,402    
 
Operating lease liability – net of current portion   198,623    273,166 
Total Liabilities   3,764,360    3,324,290 
           
Commitments and contingencies (Note 11)   
 
    
 
 
           
Stockholders’ Equity:          
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding   
    
 
Series A Preferred stock, $0.01 par value, 10,000 shares authorized, 4,633 shares issued and outstanding at June 30, 2022 and December 31, 2021   46    46 
Common stock, $0.0001 par value, 200,000,000 shares authorized, 14,702,804 and 11,984,396 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively   1,469    1,197 
Additional paid-in capital   67,953,176    67,810,922 
Accumulated deficit   (28,500,514)   (25,606,964)
Total Stockholders’ Equity   39,454,177    42,205,201 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $43,218,537   $45,529,491 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

2

 

 

The OLB Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

 

   For the Three  Months  Ended
June 30,
   For the Six Months Ended
June 30,
 
   2022   2021   2022   2021 
Revenue:                
Transaction and processing fees  $7,813,969   $2,666,049   $16,227,398   $4,756,313 
Merchant equipment rental and sales   18,174    46,896    35,342    65,403 
Revenue, net - cryptocurrency mining   207,966    
    472,306    
 
Other revenue from monthly recurring subscriptions   332,326    120,627    423,848    238,260 
Total revenue   8,372,435    2,833,572    17,158,894    5,059,976 
                     
Operating expenses:                    
Processing and servicing costs, excluding merchant portfolio amortization   6,672,141    2,098,745    12,930,278    3,646,019 
Amortization and depreciation expense   903,353    215,903    1,901,943    431,807 
Depreciation expense - cryptocurrency mining   702,494    
    1,594,250    
 
Salaries and wages   622,914    336,703    1,156,773    1,156,794 
Professional fees   294,747    383,383    619,154    610,327 
General and administrative expenses   1,007,908    464,985    2,243,225    864,310 
Total operating expenses   10,203,557    3,499,719    20,445,623    6,709,257 
                     
Loss from operations   (1,831,122)   (666,147)   (3,286,729)   (1,649,281)
                     
Other Income (Expense):                    
Interest expense   
    
    
    (116,736)
Other income   393,168    11    393,179    24 
Total other income (expense)   393,168    11    393,179    (116,712)
                     
Net Loss before income taxes  $(1,437,954)  $(666,136)  $(2,893,550)  $(1,765,993)
                     

Income Taxes

   

    

    

    

 
                     
Net Loss  $

(1,437,954

)  $

(666,136

)  $

(2,893,550

)  $

(1,765,993

)
                     
Net loss per share, basic and diluted
  $(0.10)  $(0.09)  $(0.20)  $(0.25)
                     
Weighted average shares outstanding, basic and diluted
   14,702,804    7,117,070    14,607,209    6,905,822 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

3

 

 

The OLB Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

For the Three and Six Months ended June 30, 2022 and 2021

(Unaudited)

 

   Preferred Stock   Common Stock   Additional
Paid In
   Accumulated     
   Shares   Amount   Shares   Amount   Capital   Deficit   Total 
Balance at January 1, 2022   4,633   $46    11,984,396   $1,197   $67,810,922   $(25,606,964)  $42,205,201 
Stock based compensation       
        
    70,833    
    70,833 
Common stock issued for common control acquisitions       
    1,318,408    132    (132)   
    
 
Common stock issued for exercise of warrants       
    1,400,000    140    (140)   
    
 
Net loss       
        
    
    (1,455,596)   (1,455,596)
Balance at March 31, 2022   4,633    46    14,702,804    1,469    67,881,483    (27,062,560)   40,820,438 
Stock based compensation       
        
    71,693    
    71,693 
Net loss       
        
    
    (1,437,954)   (1,437,954)
Balance at June 30, 2022   4,633   $46    14,702,804   $1,469   $67,953,176   $(28,500,514)  $39,454,177 

 

   Preferred Stock   Common Stock   Additional
Paid In
   Accumulated     
   Shares   Amount   Shares   Amount   Capital   Deficit   Total 
Balance at January 1, 2021   4,633   $46    6,170,054   $617   $26,380,124   $(20,628,606)  $5,752,181 
Stock based compensation       
        
    74,011    
    74,011 
Common stock issued for the exercise of Warrants       
    944,720    94    7,160,846    
    7,160,940 
Net loss       
        
    
    (1,099,857)   (1,099,857)
Balance at March 31, 2021   4,633    46    7,114,774    711    33,614,981    (21,728,463)   11,887,275 
Stock based compensation       
        
    79,477    
    79,477 
Common stock issued for the exercise of warrants – related party       
    159,103    16    
    
    16 
Net loss       
        
    
    (666,136)   (666,136)
Balance at June 30, 2021   4,633   $46    7,273,877   $727   $33,694,458   $(22,394,599)  $11,300,632 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

4

 

 

The OLB Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

   For the Six Months Ended
June 30,
 
   2022   2021 
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net loss  $(2,893,550)  $(1,765,993)
Adjustments to reconcile net loss to net cash used in operations:          
Depreciation and amortization   3,334,499    373,850 
Stock based compensation   142,526    153,488 
Operating lease expense   65,674    60,458 
Changes in assets and liabilities:          
Accounts receivable   291,316    (32,631)
Prepaid expenses and other current assets   (1,220,881)   7,735 
Other long-term assets   (10,019)   (55,717)
Accounts payable   202,739    (34,077)
Other accrued liabilities   (395,624)   13,342 
Net cash used in operating activities   (483,320)   (1,279,545)
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchase of property and equipment   (73,500)   
 
Net cash used by investing activities   (73,500)    
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from note payable   875,000    
 
Payments on note payable   (168,545)   (7,654,845)
Proceeds from exercise of warrants   
    7,160,956 
Net cash provided by (used in) financing activities   706,455    (493,889)
           
Net change in cash   149,635    (1,773,434)
Cash – beginning of period   3,470,339    3,824,491 
Cash – end of period  $3,619,974   $2,051,057 
           
Cash paid for:          
Interest  $
   $116,736 
Income taxes  $
   $
 

  

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

5

 

 

The OLB Group, Inc. and Subsidiaries

Notes to the Unaudited Consolidated Financial Statements

June 30, 2022

 

NOTE 1 – BACKGROUND

 

Background

 

The OLB Group, Inc. (“OLB” the “Company”) was incorporated in the State of Delaware on November 18, 2004 and provides services through its wholly-owned subsidiaries and business segments. The Company generates its revenue through two business segments its Fintech Services and Cryptocurrency Business segments.

 

Fintech Services:

 

The Company provides integrated financial and transaction processing services (“Fintech Services”) to businesses throughout the United States. Through its eVance Capital, Inc. subsidiary (“eVance”), the Company provides an integrated suite of third-party merchant payment processing services and related proprietary software enabling products that deliver credit and debit card-based internet payment processing solutions primarily to small and mid-sized merchants operating in physical “brick and mortar” business environments, on the internet and in retail settings requiring both wired and wireless mobile payment solutions. eVance operates as an independent sales organization (“ISO”) generating individual merchant processing contracts in exchange for future residual payments. As a wholesale ISO, eVance has a direct contractual relationship with the merchants and takes greater responsibility in the approval and monitoring of merchants than do retail ISOs and as a result, receives additional consideration for this service and risk. The Company’s Securus365, Inc. (“Securus365”) subsidiary operates as a retail ISO and receives residual income as commission for merchants it places with third party processors.

 

CrowdPay.us, Inc. (“CrowdPay”) is a Crowdfunding platform used to facilitate a capital raise anywhere from $1,000,000 -$50,000,000 of various types of securities under Regulation D, Regulation Crowdfunding, Regulation A and the Securities Act of 1933. To date, the activities of this subsidiary have been nominal.

 

OmniSoft.io, Inc. (“OmniSoft”) operates a software platform for small merchants. The Omnicommerce applications work on an iPad, mobile device and the web and allows customers to sell a store’s products in a physical, retail setting. To date, the activities of this subsidiary have been nominal when compared to the overall business.

 

The Company also provides ecommerce development and consulting services on a project-by-project basis.

 

Cryptocurrency Business:

 

On July 23, 2021, the Company formed DMINT, Inc., a wholly owned subsidiary (“DMINT”). The purpose of DMINT is to operate its business related to cryptocurrency mining (“Cryptocurrency Business”).

 

On July 28, 2021, the Company entered into an exclusive agreement with Cai Energy Blockchain, Inc. (“CAI”) whereby CAI provided the Company with an exclusive natural gas supply agreement (the “Services”). In exchange for the Services, the Company granted CAI options to purchase up to 767,918 shares of Common Stock, $0.0001 par value (with a fair value of approximately $4.5 million on the date of grant) at an exercise price of $0.0001 per share. The natural gas is being used in connection with theCryptocurrency Business.

 

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 lending and transactional business leveraging the Company’s Cryptocurrency Business and Fintech Services business.

 

6

 

 

COVID-19 Impact

 

On January 30, 2020, the World Health Organization declared the COVID-19 (coronavirus) outbreak a “Public Health Emergency of International Concern” and on March 10, 2020, declared it to be a pandemic. The virus and actions taken to mitigate its spread have had and are expected to continue to have a broad adverse impact on the economies and financial markets of many countries, including the geographical areas in which the Company operates. In response to the pandemic, the Company has been working with merchants to address potential changes to the purchase patterns of consumers. In addition, it has been focusing on servicing merchants that sell products with an extended delivery time frame, that have products that are paid for in advance, and that work in the catering, ticketing, limo and travel related businesses which have been directly impacted by the social distancing requirement of the pandemic. Further, for those of the Company’s employees that are able to perform their job remotely, the Company implemented a “remote work” policy and provided employees with the technology necessary to continue to do their jobs from home and for those employees that are unable to perform their job from a remote location, the Company has taken steps to ensure appropriate distancing, continue to require wearing masks in the office and added sanitizing stations along with requiring frequent hand washing and work station cleaning. In addition, the Company has been encouraging its employees to get vaccinated, if possible. At June 30, 2022, all employees were no longer working remotely and had returned to the office. However, the Company continues to monitor and follow the advice of federal and state authorities. The Company has not seen a material impact on its business since states began to roll back restrictions on businesses in the United States.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company as of and for the six month period ending June 30, 2022 and not necessarily indicative of the results to be expected for the full year ending December 31, 2022. These unaudited financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

 

Use of Estimates

  

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s accounting estimates include the collectability of receivables, useful lives of long-lived assets and recoverability of those assets, impairment in fair value of goodwill, valuation allowances for income taxes, stock-based compensation.

 

Principles of Consolidation

 

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, eVance, Securus, CrowdPay, Omnisoft, OLBit, DMINT and Crowd Ignition, Inc. All significant intercompany transactions and balances have been eliminated.

 

Reclassifications

 

Certain reclassifications have been made to the prior year financial information to conform to the presentation used in the financial statements for the three and six months ended June 30, 2022.

 

Concentration of Credit Risk

 

Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash and accounts receivable. The Company’s cash is deposited with major financial institutions. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insurable amount (“FDIC”). As of June 30, 2022, the Company had $2,532,815 of cash in excess of the FDIC’s $250,000 insurance limit.

 

7

 

 

Operating Segments

 

Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”), or decision maker group, in deciding how to allocate resources to an individual segment and in assessing performance. Our chief operating decision–making group is composed of the Chief Executive Officer and Vice President - Finance. The Company has two operating segments as of June 30, 2022. See Note 13, “Segment Information”.

 

Net Loss per Share

 

Basic net loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and dilutive potentially outstanding shares of common stock during the period. The weighted average number of common shares for the six months ended June 30, 2022 and 2021 does not include warrants to acquire up to 8,563,127 and 2,368,978 shares of common stock, respectively, because of their anti-dilutive effect. The weighted average number of common shares for the six months ended June 30, 2022 and 2021 does not include up to 779,029 and 11,112 options, respectively, to purchase common stock because of their anti-dilutive effect.

 

Accounts Receivable

 

Accounts receivable represent contractual residual payments due from the Company’s processing partners or other customers. Residual payments are determined based on transaction fees and revenues from the credit and debit card processing activity of merchants for which the Company’s processing partners pay the Company. Based on collection experience and periodic reviews of outstanding receivables, management considers all accounts receivable for our residual payments to be fully collectible and accordingly, no allowance for doubtful accounts is required; however, CrowdPay has a recorded an allowance of approximately $0 and $38,000 as of June 30, 2022 and December 31, 2021, respectively.

 

Reserve for Chargeback Losses

 

Disputes between a cardholder and a merchant periodically arise as a result of, among other things, cardholder dissatisfaction with merchandise quality or merchant services. Such disputes may not be resolved in the merchant’s favor. In these cases, the transaction is “charged back” to the merchant, which means the purchase price is refunded to the customer through the merchant’s bank and charged to the merchant. If the merchant has inadequate funds, the Company must bear the credit risk for the full amount of the transaction. The Company evaluates the risk for such transactions and estimates the potential loss for chargebacks based primarily on historical experience and records a loss reserve accordingly.

 

Revenue Recognition and Cost of Revenues

 

The Company receives a percentage of recurring monthly transaction related fees comprised of credit and debit card fees charged to merchants, net of association fees, otherwise known as Interchange, as well as certain service charges and convenience fees, for payment processing services, including authorization, capture, clearing, settlement and information reporting of electronic transactions. Fees are calculated on either a percentage of the dollar volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of the transaction. In the case of “wholesale” residual revenue in which the Company has a direct contractual relationship with the merchant, bears risk of chargebacks and performs underwriting on the merchants, the Company records the full discount charged to the merchant as revenue and the related interchange and other processing fees as expenses. In cases of residual revenue where the Company is not responsible for merchant underwriting and has no chargeback liability and has no or limited contractual relationship with the merchant, the Company records the amount it receives from the processor net of interchange and other processing fees as revenue.

 

8

 

 

Disaggregation of Revenue

 

The following table presents the Company’s revenue disaggregated by revenue source:

 

   For the  Three Months Ended
June 30,
   For the Six  Months Ended
June 30,
 
   2022   2021   2022   2021 
Revenue from contracts with customers:                
Wholesale contracts  $7,290,143   $2,004,415   $14,996,351   $3,450,272 
Retail contracts  $379,599   $441,804   $753,372   $870,953 
Other transaction and processing fees  $494,727   $387,353   $936,865   $738,751 
Cryptocurrency mining fees  $207,966   $
   $472,306   $ 
Total fees  $8,372,435   $2,833,572   $17,158,894   $5,059,976 

 

The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). The Company determines revenue recognition through the following steps:

 

  Identification of a contract with a customer;
     
  Identification of the performance obligations in the contract;
     
  Determination of the transaction price;
     
  Allocation of the transaction price to the performance obligations in the contract; and
     
  Recognition of revenue when or as the performance obligations are satisfied.

 

Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Shipping and handling activities associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment activity and recognized as revenue at the point in time at which control of the goods transfers to the customer. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less.

  

Transaction and processing fees

 

Fees for the Company’s transaction and processing arrangements are typically billed and paid on a monthly basis. The Company receives a percentage of recurring monthly transaction related fees comprised of credit and debit card fees charged to merchants, net of association fees, otherwise known as Interchange, as well as certain service charges and convenience fees, for payment processing services, including authorization, capture, clearing, settlement and information reporting of electronic transactions. Fees are calculated on either a percentage of the dollar, volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of the transaction. These merchant services represent a single performance obligation satisfied over time and that the same measure of progress should be used to measure the Company’s progress toward complete satisfaction of the performance obligation. The Company will recognize revenue on a monthly basis as the services are transferred to the customer in short daily increments that qualify for series guidance as the best measure of the transfer of control.

 

In wholesale contracts, the Company recognizes transaction and processing fees on a gross basis as the Company is the principal in the merchant services. The Company has concluded it is the principal because it has a direct contractual relationship with the merchant, is primarily responsible for the delivery of services to the merchants, including performing underwriting, has discretion in setting prices, and bears risk of chargebacks and other merchant losses. The Company also has the unilateral ability to accept or reject a transaction based on criteria established by the Company. As the principal, the Company records the full discount charged to the merchant as revenue and the related interchange and other processing fees within cost of revenues.

 

9

 

 

In retail contracts, the Company is not responsible for merchant underwriting, has no chargeback liability and has no or limited contractual relationship with the merchant. As such, the Company records the net amount it receives from the processor, after interchange and other interchange and other processing fees, as revenue.

 

Merchant equipment sales and other

 

The Company generates revenue through the sale and rental of merchant equipment. The Company satisfies its performance obligation upon delivery of equipment to merchants and recognizes revenue at a point in time. The Company allows for customer returns which are accounted for as variable consideration. The Company estimates these amounts based on historical experience and reduces revenue recognized. The Company invoices customers upon delivery of the equipment to merchants, and payments from such customers are due upon invoicing. The Company offers hardware installment sales to customers with terms ranging from three to forty-eight months. The Company allocates a portion of the consideration received from these arrangements to a financing component when it determines that a significant financing component exists. The financing component is subsequently recognized as financing revenue separate from hardware revenue, within subscription and services-based revenue, over the terms of the arrangement with the customer. Pursuant to practical expedients afforded under ASC 606, the Company does not recognize a financing component for hardware installment sales that have a term of one year or less.

  

Cryptocurrency mining

 

The Company has entered into digital asset mining pools by executing contracts, as amended from time to time, with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are immaterial and are recorded as a deduction from revenue), for successfully adding a block to the blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm.

 

Providing computing power to solve complex cryptographic algorithms in support of the Bitcoin blockchain (in a process known as “solving a block”) is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions.

 

Fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. Each individual unit of cryptocurrency held by the Company is a separate unit of account. There is currently no specific definitive guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the Financial Accounting Standards Board (“FASB”), the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations.

 

10

 

 

NOTE 3 – LIQUIDITY AND CAPITAL RESOURCES

 

At June 30, 2022, the Company had cash of approximately $3.6 million and working capital of approximately $2.8 million. As such, the Company believes it has sufficient liquidity to fund its future operations and capital requirements for a period of at least twelve months from the date these consolidated financial statements are issued.

 

NOTE 4 – INTANGIBLE ASSETS

 

Intangible assets, net, consist of the following as of:

 

   June 30,
2022
   December 31,
2021
 
Merchant Portfolios  $2,405,000   $2,405,000 
Less accumulated amortization   (1,744,606)   (1,562,798)
Net residual portfolios  $660,394   $842,202 

 

   June 30,
2022
   December 31,
2021
 
Trade name  $2,500,000   $2,500,000 
Less accumulated amortization   (1,750,000)   (1,500,000)
Net trade name  $750,000   $1,000,000 

 

   June 30,
2022
   December 31,
2021
 
CBD Merchant Portfolio  $18,000,000   $18,000,000 
Less accumulated amortization   (1,428,571)   (190,476)
Net CBD merchant portfolio  $16,571,429   $17,809,524 

  

   June 30,
2022
   December 31,
2021
 
Exclusive agreement to purchase natural gas  $4,499,952   $4,499,952 
Less accumulated amortization   (412,496)   (187,498)
Net mineral rights  $4,087,457   $4,312,454 
           
Total intangible assets, net  $22,069,280   $23,964,180 

 

Amortization expense for the three months ended June 30, 2022 and 2021 was $903,353 and $215,903, respectively.

 

Amortization expense for the six months ended June 30, 2022 and 2021 was $1,901,943 and $431,807, respectively.

 

The Company’s merchant portfolios and tradename are being amortized over respective useful lives of 7 and 5 years.

 

The Company’s agreement to purchase natural gas is being amortized over the useful life of 10 years.

 

The following sets forth the estimated amortization expense related to amortizing intangible assets for the years ended December 31:

 

2022 (six months)  $1,963,190 
2023   3,834,281 
2024   3,320,234 
2025   3,021,424 
2026   3,021,424 
Thereafter   6,908,727 
Total  $22,069,280 

 

The weighted average remaining useful life of amortizing intangible assets was 5.70 years at June 30, 2022.

 

11

 

 

NOTE 5 – PROPERTY AND EQUIPMENT

 

Long lived assets, including property and equipment assets to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Impairment losses are recognized if expected future cash flows of the related assets are less than their carrying values. Measurement of an impairment loss is based on the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.

 

Property and equipment are first recorded at cost. Depreciation and is computed using the straight-line method over the estimated useful lives of the various classes of assets.

 

Maintenance and repair expenses, as incurred, are charged to expense. Betterments and renewals are capitalized in plant and equipment accounts. Cost and accumulated depreciation applicable to items replaced or retired are eliminated from the related accounts with any gain or loss on the disposition included as income.

  

Assets stated at cost, less accumulated depreciation consisted of the following:

 

   June 30
2022
   December 31,
2021
 
Furniture and Fixtures  $36,471   $36,471 
Office Equipment   641,747    474,873 
Computer Software   182,345    182,345 
Leasehold Improvements   17,877    17,877 
Cryptocurrency Mining Equipment   9,410,000    9,410,000 
Total   10,288,440    10,121,566 
Less accumulated depreciation   (2,760,943)   (1,154,470)
Property and Equipment, net  $7,527,497   $8,967,096 

 

Depreciation expense

 

Depreciation expense for the six months ended June 30, 2022 and 2021 was $1,601,292 and $7,042, respectively.

 

NOTE 6 – NOTE PAYABLE

 

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 in the Cannabidiol (or “CBD”) industry, along with other merchants utilizing financial transaction processing services (the “Purchased Assets”). The purchase price was $20 million, with $16 million paid at closing, $2 million payable within six months after closing, and a $2 million payment to be transferred to an escrow account, contingent upon an Attrition Adjustment, as described in the Agreement.  Company management has recognized a liability for the contingent payment amount. However, on July 18, 2022, the Company notified the Seller of certain breaches of contract relating to, among other things, representations made by Seller in the Agreement, for which it will seek a reduction or cancellation of the final payment and a potential reduction in the overall purchase price.

 

On November 29, 2021, the Company entered into a Master Equipment Finance Agreement (the “MFA”) with VFS LLC (“VFS”) which would allow the Company to finance the purchase of certain equipment. The collateral and interest rate are determined at the time the Company borrows the funds. During the six months ended June 30, 2022, the Company received, as an initial draw on the MFA, $875,000 from VFS (the “Equipment Loan”). The Equipment Loan is secured by cryptocurrency mining computers being utilized by DMINT. The Equipment Loan requires monthly payments of $24,837.75 until the loan is repaid in full or it matures on November 29, 2024, requiring a full payment of all principal and accrued and unpaid interest.

 

12

 

 

NOTE 7 – STOCK OPTIONS

 

A summary of the status of the Company’s outstanding stock options and changes during the six months ended June 30, 2022 is presented below:

 

Stock Options  Options   Weighted
Average
Exercise
Price
   Aggregate
Intrinsic
Value
 
Options outstanding December 31, 2020   285,173   $0.0001   $1,408,755 
Granted   774,585   $0.0001    
-
 
Exercised   (159,103)  $
-
    
-
 
Expired   (6,667)  $
-
    
-
 
Options outstanding December 31, 2021   893,988   $0.0001   $2,369,065 
Granted   
-
   $
-
    
-
 
Exercised   
-
   $
-
    
-
 
Expired   (112,736)  $
-
    
-
 
Options outstanding June 30, 2022   781,252   $0.0001      
Shares exercisable at June 30, 2022   774,586   $0.0001   $683,572 

 

NOTE 8 – WARRANTS

        

A summary of the status of the Company’s outstanding stock warrants and changes during the six months ended June 30, 2022 is presented below:

 

   Number of
Warrants
   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contract
Term
 
Outstanding, December 31, 2020   3,353,698    4.61    4.81 
Cancelled   (40,000)  $7.50    
-
 
Underwriter Warrants   8,881,333   $3.62    
-
 
Warrant A Exercised   (742,220)  $9.00    
-
 
Warrant B Exercised   (313,320)  $4.50    
-
 
Underwriter Warrant Exercised   (1,176,364)  $0.0001    
-
 
Outstanding, December 31, 2021   9,963,127   $5.02    4.55 
Underwriter Warrant Exercised   (1,400,000)  $0.0001    
-
 
Outstanding, June 30, 2022   8,563,127   $5.10    4.45 

 

NOTE 9 – OPERATING LEASES

 

On June 24, 2020, eVance, Inc. (“eVance”) entered into a Lease Agreement (the “Lease”) with Pergament Lodi, LLC (the “Lessor”) relating to approximately 4,277 square feet of property located at 960 Northpoint Parkway, Alpharetta, Georgia, Suite 400. The term of the Lease is for thirty-nine (39) months commencing September 1, 2020. The monthly base rent is $8,019 for the first twelve (12) months increasing thereafter to $8,768. The total rent for the entire lease term is $315,044 and $8,768 is payable as a security deposit. The first three months of rent will be abated so long as eVance is not in default of any portion of the Lease.

 

On January 11, 2022, DMINT entered into two leases (the “Leases”) in Bradford, Pennsylvania relating to a combined 10,000 square feet of property located at the Bradford Regional Airport Authority multi-tenant building in Lafayette Township. The facility is in the process of being converted into a cryptocurrency mining data center powered on the local power grid in tandem with natural gas power. The location will be used for DMINT’s mining operation with capacity for up to 2,000 Antminer S19j PRO machines. The Leases are each for a term of five years, ending on the later of the date of occupancy and November 10, 2026. The monthly base rent for “Cell 3”, comprising 4,000 square feet, is $1,667 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 $250,00 and $8,768 is payable as a security deposit.

 

13

 

 

   Balance Sheet Classification  June 30,
2022
 
Asset       
Operating lease asset  Right of use asset  $336,864 
Total lease asset     $336,864 
         
Liability        
Operating lease liability – current portion  Current operating lease liability  $135,603 
Operating lease liability – noncurrent portion  Long-term operating lease liability   198,623 
Total lease liability     $334,226 

 

Lease obligations at June 30, 2022 consisted of the following:

 

For the year ended December 31:    
2022 (six months)  $75,568 
2023   144,393 
2024   50,000 
2025   50,000 
2026   41,667 
Total payments  $361,628 
Amount representing interest  $(20,955)
Lease obligation, net   340,673 
Less current portion   (142,050)
Lease obligation – long term  $198,623 

 

Rent expense for the three months ended June 30, 2022 and 2021, was $52,572 and $24,908, respectively.

 

Rent expense for the six months ended June 30, 2022 and 2021, was $94,984 and $49,817, respectively.

 

NOTE 10 - COMMON STOCK

 

In January 2022, Armistice Capital, received 1,400,000 shares of common stock upon the exercise of 1,400,000 warrants at $0.0001.

 

NOTE 11 – PREFERRED STOCK

 

Our certificate of incorporation authorizes the issuance of 50,000,000 shares of blank check preferred stock with such designation, rights and preferences as may be determined from time to time by our board of directors. The Company currently has 4,633 shares of preferred stock issued and outstanding.

 

Series A Preferred Stock

 

On August 7, 2020, we filed a Certificate of Designations, Preferences and Rights of Series A Preferred Stock (the “Certificate of Designations”) with the Secretary of State of Delaware. The Certificate of Designations will provide that the Company may issue up to 10,000 shares of Series A Preferred Stock at a stated value (the “Stated Value”) of $1,000 per share. Holders of Series A Preferred Stock are entitled to the following rights and preferences.

 

Dividends

 

The Series A Preferred Stockholders are entitled to receive cash dividends at a rate per share (as a percentage of the Stated Value per share) of 12% per annum. Dividends accrue quarterly. Dividends are to be paid to the holders from funds legally available for payment and as approved for payment by the Board of Directors of the Company.

 

14

 

 

Conversion

 

The Series A Preferred Stock holders may convert, at their option, on or after the date on which the Term Loan is repaid in full, each share of Series A Preferred Stock (along with accrued but unpaid dividends thereon) into such number of shares of common stock as determined by dividing the Stated Value by the conversion price. The conversion price for the Series A Preferred Stock will be equal to the offering price per Unit in this offering and will be subject to adjustment for splits and the like. The holders of Series A Preferred Stock will only be permitted to convert their shares of Series A Preferred Stock into shares of common stock at such time as the Term Loan has been repaid in full and there is no further outstanding obligations regarding such indebtedness.

 

Voting

 

Each holder of a share of Series A Preferred Stock will have the right to vote its shares of Series A Preferred Stock with the common stock on an as-converted basis, and with respect to such votes, such holder shall have full voting rights and powers equal to the voting rights and powers of the holders of common stock, and shall be entitled, to notice of any stockholders’ meeting in accordance with the Company’s bylaws, and shall be entitled to vote, together with holders of common stock, with respect to any question upon which holders of common stock have the right to vote. Fractional votes shall not be permitted, and such shares shall be rounded up.

 

Liquidation Preference

 

Each share of Series A Preferred Stock will have a liquidation preference equal to the Stated Value plus any accrued but unpaid dividends thereon. In the event of a liquidation, dissolution or winding up of the Company (which includes any merger, reorganization, sale of assets in which control of the Company is transferred or event which results in all or substantially all of the Company’s assets being transferred), the holders of Series A Preferred Stock shall be entitled to receive out of the assets of the Company, before any payment is made to the holders of the Company’s common stock and either in preference to or pari pasu with the holders of any other series of preferred stock that may be issued in the future, a per share amount equal to the liquidation preference.

 

NOTE 12 – RELATED PARTY TRANSACTIONS

 

On January 3, 2022, the Company entered into a share exchange agreement with all of the shareholders of Crowd Ignition, Inc. (“Crowd Ignition”) whereby the Company purchased 100% of the equity of Crowd Ignition in exchange for 1,318,408 shares of the common stock, par value $0.0001 of the Company (the “CI Issued Shares”). The value of the CI Issued Shares was, for purposes of the Agreement, based on the closing trading price of the Company on October 1, 2021 (the date on which a third-party fairness opinion was issued), resulting in an aggregate purchase price for Crowd Ignition of $5.3 million. The purchase price was used solely to establish the agreed upon purchase price between the parties and not for accounting purposes.

 

Crowd Ignition is a web-based crowdfunding software system. Ronny Yakov, Chairman and CEO of the Company and John Herzog, a significant shareholder of the Company, collectively owned 100% of the equity of Crowd Ignition. The acquisition of Crowd Ignition., was determined to be a common control transaction as each Company has the same two shareholders with a majority ownership. As a result, the assets and liabilities assumed were recorded on the Company’s condensed consolidated financial statements at their respective carry-over basis; however, as of January 3, 2022, Crowd Ignition has no assets, liabilities or other operations.

 

NOTE 13 – COMMITMENTS AND CONTINGENCIES

 

In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements.

 

15

 

 

On January 11, 2022, the Company entered into a new employment agreement with Mr. Yakov (the “Yakov Agreement”) and a new employment agreement with Mr. Smith (the “Smith Agreement”). The Yakov Agreement maintains Mr. Yakov’s role as the Company’s Chief Executive Officer through December 31, 2027 and extended for one-year terms thereafter. The Smith Agreement maintains Mr. Smith’s role as the Company’s Vice President, Finance unless terminated or upon his resignation.

 

The Yakov Agreement increases Mr. Yakov’s base salary to $750,000 and he will continue to be eligible for insurance coverages and benefits available to the Company’s employees pursuant to the terms of such plans. Mr. Yakov also received a $490,000 bonus for acquisitions closed by the Company in 2020 and 2021 and he will be eligible to receive an acquisition bonus equal to two percent (2%) of the gross purchase price paid in connection with a future acquisition. Mr. Yakov shall be eligible to receive an annual bonus of Three Hundred Thousand Dollars ($300,000) based on performance criteria established by the Board. In addition, on an annual basis, Mr. Yakov shall receive options to purchase up to 200,000 shares of common stock of the Company at an exercise price of $0.001 per share. The Company’s existing option plan will need to be amended to increase the number of available shares before the options to Mr. Yakov can be granted.

 

The Yakov Agreement also states that, if Mr. Yakov’s employment is terminated without cause or he voluntarily terminates his employment for good reason, he will continue to receive his base salary for the remainder of the term along with all earned bonuses. In the event the termination is in connection with Mr. Yakov’s death, disability or bankruptcy of the Company, he will receive the pro rata amount of his base salary through the termination date and all bonuses earned through the termination date.

 

The Smith Agreement increases Mr. Smith’s base salary to $350,000 and he will continue to be eligible for insurance coverages and benefits available to the Company’s employees pursuant to the terms of such plans. Mr. Smith shall be eligible to receive an annual bonus of One Hundred Fifty Thousand Dollars ($150,000) based on performance criteria established by the Committee. In addition, Mr. Smith shall receive options (the “Options”) to purchase up to 275,000 shares of common stock of the Company at an exercise price of $0.001 per share. The Options vest equally over five years at the rate of one-fifth (1/5th) beginning on the anniversary of the Effective Date of the Agreement. The Company’s existing option plan will need to be amended to increase the number of available shares before the options to Mr. Smith can be granted.

 

The Smith Agreement also states that, if Mr. Smith’s employment is terminated without cause or he voluntarily terminates his employment for good reason, he will continue to receive his base salary for the remainder of the term along with all earned bonuses. In the event the termination is in connection with Mr. Smith’s death, disability or bankruptcy of the Company, he will receive the pro rata amount of his base salary through the termination date and all bonuses earned through the termination date.

 

The Company had an adverse litigation judgment against it during the fiscal year relating to, among other things, a breach of contract claim, which included damages and attorney fees in favor of the Plaintiff. The Company appealed the judgment of both the award of damages and attorney fees and it prevailed in July 2022 when the case was remanded for retrial. As a result, the accrued expense related to the damage award has been eliminated.

  

NOTE 14 - SEGMENTS

 

The Company applies ASC 280, Segment Reporting, in determining its reportable segments. The Company has two reportable segments during 2021: Cryptocurrency Mining and Fintech Services. The guidance requires that segment disclosures present the measure(s) used by the Chief Operating Decision Maker (“CODM”) to decide how to allocate resources and for purposes of assessing such segments’ performance. The Company’s CODM is comprised of several members of its executive management team who use revenue and expenses of our two reporting segments to assess the performance of the business of our reportable operating segments.

 

16

 

 

The following tables details revenue, operating expenses, and assets for the Company’s reportable segments for the three months ended June 30, 2022.

 

   For  the Three Months ended
June 30,
   For the Six  Months ended
June 30,
 
   2022   2021   2022   2021 
Reportable segment revenue:                
Revenue, net - cryptocurrency mining  $207,966   $
   $472,306   $
 
Fintech services revenue   8,164,469    2,833,572    16,686,588    5,059,976 
Total segment and consolidated revenue  $8,372,435   $2,833,572   $17,158,894   $5,059,976 

 

  

June 30,

2022

   December 31,
2021
 
Total Assets:        
Cryptocurrency mining  $9,081,126   $9,749,652 
Fintech services   34,137,411    33,779,839 
   $43,218,537   $43,529,491 

 

NOTE 15 – SUBSEQUENT EVENTS

 

On July 12, 2022, the Board of the Company authorized a share repurchase program, pursuant to which the Company may repurchase up to 1 million shares of its outstanding shares of common stock. The Board authorized the Company to purchase its common stock from time to time on a discretionary basis through open market purchases, privately negotiated transactions or other means, including trading plans intended to qualify under Rule 10b5-1 of the Exchange Act, in accordance with applicable federal securities laws and other applicable legal requirements. The Company expects to fund these repurchases through existing cash balances. Decisions regarding the amount and the timing of purchases under the program will be influenced by the Company’s cash on hand, cash flows from operations, general market conditions and other factors. The Company is not obligated to acquire any particular amount of its common stock. This program has no set termination date and may be suspended or discontinued by the Board at any time. 

 

17

 

 

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward-Looking Statements

 

The information in this report contains forward-looking statements. All statements other than statements of historical fact made in this report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management’s current expectations and are inherently uncertain. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, our actual results may differ significantly from management’s expectations. These risks and uncertainties include those factors described in greater detail in the risk factors disclosed in our Form 10-K for the fiscal year ended December 31, 2021 filed with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those anticipated in these forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

 

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or, in the case of documents referred to or incorporated by reference, the date of those documents.

 

The following discussion and analysis should be read in conjunction with our unaudited financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.

 

Company Overview and Description of Business

 

Overview

 

We are a FinTech company and PayFac that focuses on a suite of products in the merchant services and payment facilitator verticals that seeks to provide integrated business solutions to merchants throughout the United States. We seek to accomplish this by providing merchants with a wide range of products and services through our various online platforms, including financial and transaction processing services. We also have products that provide support for crowdfunding and other capital raising initiatives. We supplement our online platforms with certain hardware solutions that are integrated with our online platforms. Our business functions primarily through three wholly-owned subsidiaries, eVance, OmniSoft, and CrowdPay, though substantially all of our revenue has been generated from our eVance business (we began generating revenue from our OmniSoft and CrowdPay businesses in the second half of 2019). We expect to build out our OmniSoft software business and to rely more on our PayFac model for revenue so that we are not dependent on our revenue from our eVance business but there is no guarantee that we will be able to do so.

 

With respect to our eVance business, our merchants are currently processing over $100,000,000 in gross transactions monthly and average approximately 1,400,000 transactions a month. These transactions come from a variety of sources including direct accounts and ISO channels. The accounts consist of businesses across the United States with no concentration of industries or merchants.

 

18

 

 

We have integrated all the applications for OmniSoft and the ShopFast Omnicommerce solution with the eVance mobile payment gateway, SecurePay.comTM. SecurePay.comTM, is currently used by approximately 3,000 merchants processing over 32,000 transactions and approximately $9,000,000 of monthly gross transactions (though our revenue from these transactions is limited). 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. (“POSaBIT”), including its contracts and arrangements with the Doublebeam merchant payment processing platform (the “POSaBIT Asset Acquisition”). The assets included, but were not limited to, software source codes, customer lists, customer contracts, hardware and website domains.

 

On May 14, 2021, the Company formed OLBit, Inc., a wholly owned subsidiary (“OLBit”). The purpose of OLBit is to hold the Company’s assets and operate its business related to its emerging cryptocurrency-related lending and transactional business.

  

On July 23, 2021, we formed DMINT, Inc., a wholly owned subsidiary (“DMINT”) to operate in the cryptocurrency mining industry. DMINT has initiated the first phase of the cryptocurrency mining operation by placing purchase orders for data centers and ASIC-based Antminer S19J Pro mining computers specifically configured to mine Bitcoin. The first lot of equipment is being used to establish a proof of concept before DMINT expands the number of computers in operation. As of June 30, 2022, DMint has purchased 1,000 computers, of which 650 computers have been delivered with 250 online and mining for Bitcoin, 400 computers are in process of being installed and 350 additional computers are scheduled for delivery in 2022. It has six data centers located in Pennsylvania where it has mined ten Bitcoin. It has entered into an exclusive agreement whereby it has rights to all of the natural gas produced by 15 mines in Bradford, Pennsylvania. The natural gas is taken directly from the well heads to generate electricity required to power the mining computers. As configured, it is expected that the computers purchased will have a combined computing power of approximately 100 petahash per second. If the initial mining operation results are as anticipated, DMINT plans to expand the number of mining computers every quarter, whereby it would aim to have the computing power of 500 petahash per second by the end of 2022.

 

On January 3, 2022, the Company entered into a share exchange agreement with all of the shareholders of Crowd Ignition, Inc. (“Crowd Ignition”) whereby the Company purchased 100% of the equity of Crowd Ignition).

 Crowd Ignition is a web-based crowdfunding software system. Ronny Yakov, Chairman and CEO of the Company and John Herzog, a shareholder of the Company, owned 100% of the equity of Crowd Ignition. The software provides broker-dealer, merchant banks and law firms a platform to market crowdfunding offerings, collect payments and issue securities. The software has been developed in response to, and to comply with, recent changes in investment regulations including Regulation D 506(b) and 506(v), Regulation A+ and Title III of the Jobs Act (Regulation CF), including raising the crowdfunding limit from $1.07 million to $5.0 million. Crowd Ignition is one of only about 50 companies registered with the SEC to provide the services permitted under Regulation CF.

 

Results of Operations

 

Management’s discussion and analysis of financial condition and results of operations (“MD&A”) includes a discussion of the consolidated results from operations of The OLB Group, Inc. and its subsidiaries for the three and six months ended June 30, 2022 and 2021.

 

19

 

 

Three Months Ended June 30, 2022 Compared to the Three Months Ended June 30, 2021

 

For the three months ended June 30, 2022, we had total revenue of $8,372,435 compared to $2,833,572 of revenue for the three months ended June 30, 2022, an increase of $5,538,863 or 195.5%. We earned $7,813,969 in transaction and processing fees, $18,174 in merchant equipment rental and sales, $332,326 in other revenue from monthly recurring subscriptions and $207,966 of other revenue from the Cryptocurrency Mining segment during the three months ended June 30, 2022, compared to $2,666,049 in transaction and processing fees, $46,896 in merchant equipment sales and $120,627 in other revenue during the three months June 30, 2021. 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 revenue from cryptocurrency mining, which we did not have in the prior period. Processing and servicing costs increased by $4,573,396 or 217.9%

 

Amortization and depreciation expense for the three months ended June 30, 2022 was $903,353 compared to $215,903 for the three months ended June 30, 2021, an increase of $687,450 or 318.4%. We record amortization expense on our merchant portfolio, trademarks and natural gas purchase rights. Our amortization expense for the three months ended June 30, 2022, increased in the current year period due to the agreement with Cai Energy to purchase natural gas to operate the cryptocurrency mining computers used in the Cryptocurrency Mining segment. Depreciation expense for our cryptocurrency mining segment was $702,494 in the current period due to the acquisition of Cryptocurrency Mining equipment. 

  

Salary and wage expense for the three months ended June 30, 2022, was $622,914 compared to $336,703 for the three months ended June 30, 2021 an increase of $286,211 or 85%. Salary and wage expense has increased due to the hiring of new employees during the latter part of 2021 and to an increase in salary for our officers.

  

Professional fees for the three months ended June 30, 2022, were $292,747 compared to $383,383 for the three months ended June 30, 2021, a decrease of $90,636 or 23.6%. Professional fees consist mainly of audit and legal fees. The decrease in the current period is mainly due to a decrease in legal expense.

 

General and administrative expenses (“G&A”) for the three months ended June 30, 2022, was $1,007,908 compared to $464,985 for the three months ended June 30, 2021, an increase of $542,923 or 116.8%. Some of our larger G&A expenses included insurance policy expense of $130,000 as a result of the cost to insure the cryptocurrency mining machines and the increase in the size of the Company’s business, travel of $71,000 from $11,000 in the same period of 2021, marketing and promotion of $58,000 from $7,400 in the same period of 2021, contracted services of $180,000 from $61,000 in the same period of 2021, utilities of $133,00 from $0 in the same period of 2021 and computer and internet expense of $131,000 from $68,000 in the same period of 2021.

  

For the three months ended June 30, 2022, we had other income of $393,168 compared to $11 for the three months ended June 30, 2021. In the current period we recognized a gain of $393,158 from the elimination of a liability associated with a prior adverse judgement which was reversed on appeal.

 

Our net loss for the three months ended June 30, 2022 was $1,437,954 compared to $666,136 for the three months ended June 30, 2021. We had an increase in our net loss of $577,374 for the reasons discussed above. 

 

20

 

 

Six Months Ended June 30, 2022 Compared to the Six Months Ended June 30, 2021

 

For the six months ended June 30, 2022, we had total revenue of $17,158,894 compared to $5,059,976 of revenue for the six months ended June 30, 2022, an increase of $12,098,918 or 239.1%. We earned $16,227,398 in transaction and processing fees, $35,342 in merchant equipment rental and sales, $423,848 in other revenue from monthly recurring subscriptions and $472,306 of other revenue from the Cryptocurrency Mining segment during the six months ended June 30, 2022, compared to $4,756,313 in transaction and processing fees, $65,403 in merchant equipment sales and $238,260 in other revenue during the six months June 30, 2021. 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 revenue from cryptocurrency mining, which we did not have in the prior period. Processing and servicing costs increased by $9,284,259 or 254.6%

 

Amortization and depreciation expense for the six months ended June 30, 2022, was $1,901,943 compared to $431,807 for the six months ended June 30, 2021, an increase of $1,470,136 or 340.5%. We record amortization expense on our merchant portfolio, trademarks and natural gas purchase rights. Our amortization expense for the six months ended June 30, 2022, increased in the current year period due to the agreement with Cai Energy to purchase natural gas to operate the cryptocurrency mining computers used in the Cryptocurrency Mining segment. Depreciation expense for our cryptocurrency mining segment was $1,594,250 in the current period due to the acquisition of Cryptocurrency Mining equipment. 

 

Salary and wage expense for the six months ended June 30, 2022 was $1,156,773 compared to $1,156,794 for the six months ended June 30, 2021 a decrease of only $21. There were $275,000 in salary increases in 2022. However, bonuses of $400,000 paid in the first quarter of 2021 which were one-time payments resulted in a year-over-year decrease in the total salary and wage expense for the six months period. 

  

Professional fees for the six months ended June 30, 2022 were $619,154 compared to $610,3217 for the six months ended June 30, 2021, an increase of $8,827 or 1.4%. Professional fees consist mainly of audit and legal fees. The increase in the current period is mainly due to an increase in legal expense during the second three months of 2022.

 

General and administrative expenses (“G&A”) for the six months ended June 30, 2022 was $2,243,225 compared to $864,310 for the six months ended June 30, 2021, an increase of $1,378,915 or 159.5%. Some of our larger G&A expenses included insurance policy expense of $166,000 as a result of the cost to insure the cryptocurrency mining machines and the increase in the size of the Company’s business, travel of $179,000 from $14,000 in the same period of 2021, marketing and promotion of $183,000 from $7,400 in the same period of 2021, contracted services of $439,000 from $126,000 in the same period of 2021, utilities of $231,00 from $0 in the same period of 2021and computer and internet expense of $277,000 from $161,000 in the same period of 2021.

  

For the six months ended June 30, 2022, we incurred $0 of interest expense, compared to $116,736 for the six months ended June 30, 2021, a decrease of $116,736. The decrease in interest expense is due the conversion of all related party debt and the repayment of the Term Loan in March 2021.

 

For the six months ended June 30, 2022, we had other income of $393,179 compared to $24 for the six months ended June 30, 2021. In the current period we recognized a gain of $393,158 from the reversal of a liability associated with a prior adverse judgement on appeal.

 

Our net loss for the six months ended June 30, 2022 was $2,893,550 compared to $1,765,993 for the six months ended June 30, 2021. We had an increase in our net loss of $933,113 for the reasons discussed above. 

 

Liquidity and Capital Resources

 

Trends and Uncertainties

 

The Company’s financial condition and results of operations 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. as some workers were forced to quarantine or convalesce as a result of the spread of the COVID-19 virus. The Company is currently following the recommendations of local health authorities to minimize exposure risk for its employees and visitors. During the first six months of 2022, the Company did not attribute any material impact on its business as a result of the pandemic. However, the duration of this pandemic continues to remain unknown. If there was another increase in cases requiring quarantines or closures of businesses by our merchants, the duration of the business disruption and related financial impact cannot be reasonably estimated at this time. While the Company has 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 plans will be successful or that the Company’s merchants will meet the number of forecasted transactions.

 

21

 

 

In 2021 and the first six months of 2022, 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. 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. Accordingly, COVID-19 could still have a material adverse effect on the Company’s business, results of operations, financial condition and prospects during the second half of 2022 and beyond.

 

Changes in Cash Flows

 

For the six months ended June 30, 2022, $556,820 of cash was used by operating activities, which included our net loss, offset by $3,334,499 for amortization and depreciation expense, $142,526 for stock-based compensation $65,674 of operating lease expense and net changes in operating assets and liabilities of $1,205,969.

 

For the six months ended June 30, 2022, we received net cash of $706,455 in financing activities from a loan payable.

  

Liquidity and Capital Resources

 

At June 30, 2022, the Company had cash of $3,619,974 and working capital of $2,807,441. The Company has approximately $3.8 million of outstanding liabilities.

 

On March 2, 2021, the Company, utilizing a portion of funds received from the exercise of outstanding warrants, paid approximately $7.7 million to the pay off the entire outstanding amount of the Term Loan. In connection with the extinguishment of the obligations under the Term Loan, 40,000 warrants to purchase Common Stock were cancelled.

 

In addition, the Company has received a Paycheck Protection Program loan under the CARES Act for approximately $236,000 (the “PPP Loan”). On October 11, 2021, the Company obtained forgiveness of all amounts due under the PPP Loan.

 

On November 2, 2021, the Company entered into a series of securities purchase agreements with certain institutional accredited investors pursuant to which the Company issued and sold, in a private placement (i) 1,969,091 shares (the “Shares”) of the Company’s Common Stock (ii) pre-funded warrants exercisable for a total of 2,576,364 shares of Common Stock (the “Prefunded Warrant Shares”) with an exercise price of $0.0001 per Prefunded Warrant Share, and (iii) warrants exercisable for a total of 4,545,455 shares of Common Stock (the “Common Warrant Shares” and together with the Prefunded Warrant Shares, the “Warrant Shares”) with an exercise price of $6.50 per Common Warrant Share. The offering closed on November 5, 2021 and the Company received net proceeds of approximately $22.9 million, after deducting placement agent fees and other offering expenses. The Company intends to use the net proceeds from the offering to invest in or acquire companies or technologies that are synergistic with or complimentary to its business, to expand and market its current products and for working capital and general corporate purposes.

 

The Company has reviewed its cash flow for 2022, projected operating cash flows for 2022 and 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 Quarterly Report. As a result of (a) the improved transaction volume trends the Company experienced during 2021 and the first six months ended June 30, 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 Quarterly Report.

 

Critical Accounting Policies

 

Refer to our Form 10-K for the year ended December 31, 2021, for a full discussion of our critical accounting policies.

 

Subsequent Events

 

On July 12, 2022, the Board of the Company authorized a share repurchase program, pursuant to which the Company may repurchase up to 1 million shares of its outstanding shares of common stock. The Board authorized the Company to purchase its common stock from time to time on a discretionary basis through open market purchases, privately negotiated transactions or other means, including trading plans intended to qualify under Rule 10b5-1 of the Exchange Act, in accordance with applicable federal securities laws and other applicable legal requirements. The Company expects to fund these repurchases through existing cash balances. Decisions regarding the amount and the timing of purchases under the program will be influenced by the Company’s cash on hand, cash flows from operations, general market conditions and other factors. The Company is not obligated to acquire any particular amount of its common stock. This program has no set termination date and may be suspended or discontinued by the Board at any time.

 

22

 

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.

 

ITEM 4. CONTROLS AND PROCEDURES

 

During the second quarter of the year ended June 30, 2022, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, are recorded, processed, summarized and reported within the required time periods specified in the Commission’s rules and forms and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

Our principal executive officer and principal financial officer, do not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended June 30, 2022, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

 

23

 

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

There are no claims, actions, suits, proceedings, or investigations that are currently pending or, to the Company’s knowledge, threatened by or against the Company or respecting its operations or assets, or by or against any of the Company’s officers, directors, or affiliates.

 

ITEM 1A. RISK FACTORS

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None.

 

ITEM 6. EXHIBITS

 

Exhibit
Number
  Exhibit Description
31.1   Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
31.2   Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
32   Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002. (filed herewith)
101.INS   Inline XBRL Instance Document.  
101.SCH   Inline XBRL Taxonomy Extension Schema Document.
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

24

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: August 12, 2022  By: /s/ Ronny Yakov
  Name:  Ronny Yakov
  Title: Chief Executive Officer
    (Principal Executive Officer)
     
Date: August 12, 2022  By: /s/ Rachel Boulds
  Name: Rachel Boulds
  Title: Chief Financial Officer
    (Principal Financial and Accounting Officer)

 

 

25

 

 

 

 

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EX-31.1 2 f10q0622ex31-1_theolbgroup.htm CERTIFICATION

Exhibit 31.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, 

AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

 

I, Ronny Yakov, Chief Executive Officer of The OLB Group, Inc. (the “Registrant”) certify that:

 

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2022 of The OLB Group, Inc.

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 12, 2022 

 

By: /s/ Ronny Yakov  
 

Ronny Yakov

 
  Chief Executive Officer  
  (Principal Executive Officer)  

 

EX-31.2 3 f10q0622ex31-2_theolbgroup.htm CERTIFICATION

Exhibit 31.2

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, 

AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

 

I, Rachel Boulds, Chief Financial Officer of The OLB Group, Inc. (the “Registrant”) certify that:

 

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2022 of The OLB Group, Inc.

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 12, 2022 

 

By: /s/ Rachel Boulds  
  Rachel Boulds  
 

Chief Financial Officer 

(Principal Financial and Accounting Executive)

 

 

EX-32 4 f10q0622ex32_theolbgroup.htm CERTIFICATION

Exhibit 32

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES—OXLEY ACT OF 2002

 

In connection with the Quarterly Report of The OLB Group, Inc. (the “Company”) on Form 10-Q for the three and six months ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ronny Yakov, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Sec.1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that to my knowledge:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

 

Date: August 12, 2022

 

By: /s/ Ronny Yakov  
  Ronny Yakov
Chief Executive Officer
 
  (Principal Executive)  

 

In connection with the Quarterly Report of The OLB Group, Inc. (the “Company”) on Form 10-Q for the three and six months ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Rachel Boulds, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Sec.1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that to my knowledge:

 

(1)The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

 

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

 

Date: August 12, 2022

 

By: /s/ Rachel Boulds  
  Rachel Boulds
Chief Financial Officer

(Principal Financial and Accounting Executive)
 

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to The OLB Group, Inc. and will be retained by The OLB Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

 

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Document And Entity Information - shares
6 Months Ended
Jun. 30, 2022
Aug. 11, 2022
Document Information Line Items    
Entity Registrant Name OLB GROUP, INC.  
Trading Symbol OLB  
Document Type 10-Q  
Current Fiscal Year End Date --12-31  
Entity Common Stock, Shares Outstanding   14,702,804
Amendment Flag false  
Entity Central Index Key 0001314196  
Entity Current Reporting Status Yes  
Entity Filer Category Non-accelerated Filer  
Document Period End Date Jun. 30, 2022  
Document Fiscal Year Focus 2022  
Document Fiscal Period Focus Q2  
Entity Small Business true  
Entity Emerging Growth Company true  
Entity Shell Company false  
Entity Ex Transition Period false  
Document Quarterly Report true  
Document Transition Report false  
Entity File Number 000-52994  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 13-4188568  
Entity Address, Address Line One 200 Park Avenue  
Entity Address, Address Line Two Suite 1700  
Entity Address, City or Town New York  
Entity Address, State or Province NY  
Entity Address, Postal Zip Code 10166  
City Area Code (212)  
Local Phone Number 278-0900  
Title of 12(b) Security Common Stock, $0.0001 par value  
Security Exchange Name NASDAQ  
Entity Interactive Data Current Yes  
XML 12 R2.htm IDEA: XBRL DOCUMENT v3.22.2
Condensed Consolidated Balance Sheets - USD ($)
Jun. 30, 2022
Dec. 31, 2021
Current Assets:    
Cash $ 3,619,974 $ 3,470,339
Accounts receivable, net 839,237 670,822
Prepaid expenses 303,909 15,064
Other current assets 1,201,656 729,351
Total Current Assets 5,964,776 4,885,576
Other Assets:    
Property and equipment, net 7,527,497 8,967,096
Intangible assets, net 22,069,280 23,964,180
Goodwill 6,858,216 6,858,216
Operating lease right-of-use assets 336,864 402,538
Other long-term assets 461,904 451,885
Total Other Assets 37,253,761 40,643,915
TOTAL ASSETS 43,218,537 45,529,491
Current Liabilities:    
Accounts payable 631,001 501,762
Accrued expenses 86,231 416,182
Merchant portfolio purchase installment obligation 2,000,000 2,000,000
Operating lease liability – current portion 142,050 133,180
Note payable – current portion 298,053
Total Current Liabilities 3,157,335 3,051,124
Long Term Liabilities:    
Notes payable, net of current portion 408,402
Operating lease liability – net of current portion 198,623 273,166
Total Liabilities 3,764,360 3,324,290
Commitments and contingencies (Note 11)
Stockholders’ Equity:    
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding
Series A Preferred stock, $0.01 par value, 10,000 shares authorized, 4,633 shares issued and outstanding at June 30, 2022 and December 31, 2021 46 46
Common stock, $0.0001 par value, 200,000,000 shares authorized, 14,702,804 and 11,984,396 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively 1,469 1,197
Additional paid-in capital 67,953,176 67,810,922
Accumulated deficit (28,500,514) (25,606,964)
Total Stockholders’ Equity 39,454,177 42,205,201
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 43,218,537 $ 45,529,491
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Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares
Jun. 30, 2022
Dec. 31, 2021
Preferred stock, par value (in Dollars per share) $ 0.01 $ 0.01
Preferred stock, shares authorized 50,000,000 50,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value (in Dollars per share) $ 0.0001 $ 0.0001
Common stock, shares authorized 200,000,000 200,000,000
Common stock, shares issued 14,702,804 11,984,396
Common stock, shares outstanding 14,702,804 11,984,396
Series A Preferred Stock    
Preferred stock, par value (in Dollars per share) $ 0.01 $ 0.01
Preferred stock, shares authorized 10,000 10,000
Preferred stock, shares issued 4,633 4,633
Preferred stock, shares outstanding 4,633 4,633
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Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
Jun. 30, 2022
Jun. 30, 2021
Revenue:        
Transaction and processing fees $ 7,813,969 $ 2,666,049 $ 16,227,398 $ 4,756,313
Merchant equipment rental and sales 18,174 46,896 35,342 65,403
Revenue, net - cryptocurrency mining 207,966 472,306
Other revenue from monthly recurring subscriptions 332,326 120,627 423,848 238,260
Total revenue 8,372,435 2,833,572 17,158,894 5,059,976
Operating expenses:        
Processing and servicing costs, excluding merchant portfolio amortization 6,672,141 2,098,745 12,930,278 3,646,019
Amortization and depreciation expense 903,353 215,903 1,901,943 431,807
Depreciation expense - cryptocurrency mining 702,494 1,594,250
Salaries and wages 622,914 336,703 1,156,773 1,156,794
Professional fees 294,747 383,383 619,154 610,327
General and administrative expenses 1,007,908 464,985 2,243,225 864,310
Total operating expenses 10,203,557 3,499,719 20,445,623 6,709,257
Loss from operations (1,831,122) (666,147) (3,286,729) (1,649,281)
Other Income (Expense):        
Interest expense (116,736)
Other income 393,168 11 393,179 24
Total other income (expense) 393,168 11 393,179 (116,712)
Net Loss before income taxes (1,437,954) (666,136) (2,893,550) (1,765,993)
Income Taxes
Net Loss $ (1,437,954) $ (666,136) $ (2,893,550) $ (1,765,993)
Net loss per share, basic and diluted (in Dollars per share) $ (0.1) $ (0.09) $ (0.2) $ (0.25)
Weighted average shares outstanding, basic and diluted (in Shares) 14,702,804 7,117,070 14,607,209 6,905,822
XML 15 R5.htm IDEA: XBRL DOCUMENT v3.22.2
Condensed Consolidated Statements of Operations (Unaudited) (Parentheticals) - $ / shares
3 Months Ended 6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
Jun. 30, 2022
Jun. 30, 2021
Income Statement [Abstract]        
Net loss per share, basic and diluted (in Dollars per share) $ (0.08) $ (0.09) $ (0.18) $ (0.25)
Weighted average shares outstanding, basic and diluted (in Shares) 14,702,804 7,117,070 14,607,209 6,905,822
XML 16 R6.htm IDEA: XBRL DOCUMENT v3.22.2
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) - USD ($)
Preferred Stock
Common Stock
Additional Paid In Capital
Accumulated Deficit
Total
Balance at Dec. 31, 2020 $ 46 $ 617 $ 26,380,124 $ (20,628,606) $ 5,752,181
Balance (in Shares) at Dec. 31, 2020 4,633 6,170,054      
Stock based compensation 74,011 74,011
Common stock issued for exercise of warrants $ 94 7,160,846 7,160,940
Common stock issued for exercise of warrants (in Shares)   944,720      
Net loss (1,099,857) (1,099,857)
Balance at Mar. 31, 2021 $ 46 $ 711 33,614,981 (21,728,463) 11,887,275
Balance (in Shares) at Mar. 31, 2021 4,633 7,114,774      
Balance at Dec. 31, 2020 $ 46 $ 617 26,380,124 (20,628,606) 5,752,181
Balance (in Shares) at Dec. 31, 2020 4,633 6,170,054      
Net loss         (1,765,993)
Balance at Jun. 30, 2021 $ 46 $ 727 33,694,458 (22,394,599) 11,300,632
Balance (in Shares) at Jun. 30, 2021 4,633 7,273,877      
Balance at Mar. 31, 2021 $ 46 $ 711 33,614,981 (21,728,463) 11,887,275
Balance (in Shares) at Mar. 31, 2021 4,633 7,114,774      
Stock based compensation 79,477 79,477
Common stock issued for the exercise of warrants – related party $ 16 16
Common stock issued for the exercise of warrants – related party (in Shares)   159,103      
Net loss (666,136) (666,136)
Balance at Jun. 30, 2021 $ 46 $ 727 33,694,458 (22,394,599) 11,300,632
Balance (in Shares) at Jun. 30, 2021 4,633 7,273,877      
Balance at Dec. 31, 2021 $ 46 $ 1,197 67,810,922 (25,606,964) 42,205,201
Balance (in Shares) at Dec. 31, 2021 4,633 11,984,396      
Stock based compensation 70,833 70,833
Common stock issued for common control acquisitions $ 132 (132)
Common stock issued for common control acquisitions (in Shares)   1,318,408      
Common stock issued for exercise of warrants $ 140 (140)
Common stock issued for exercise of warrants (in Shares)   1,400,000      
Net loss (1,455,596) (1,455,596)
Balance at Mar. 31, 2022 $ 46 $ 1,469 67,881,483 (27,062,560) 40,820,438
Balance (in Shares) at Mar. 31, 2022 4,633 14,702,804      
Balance at Dec. 31, 2021 $ 46 $ 1,197 67,810,922 (25,606,964) 42,205,201
Balance (in Shares) at Dec. 31, 2021 4,633 11,984,396      
Net loss         (2,893,550)
Balance at Jun. 30, 2022 $ 46 $ 1,469 67,953,176 (28,500,514) 39,454,177
Balance (in Shares) at Jun. 30, 2022 4,633 14,702,804      
Balance at Mar. 31, 2022 $ 46 $ 1,469 67,881,483 (27,062,560) 40,820,438
Balance (in Shares) at Mar. 31, 2022 4,633 14,702,804      
Stock based compensation 71,693 71,693
Net loss (1,437,954) (1,437,954)
Balance at Jun. 30, 2022 $ 46 $ 1,469 $ 67,953,176 $ (28,500,514) $ 39,454,177
Balance (in Shares) at Jun. 30, 2022 4,633 14,702,804      
XML 17 R7.htm IDEA: XBRL DOCUMENT v3.22.2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (2,893,550) $ (1,765,993)
Adjustments to reconcile net loss to net cash used in operations:    
Depreciation and amortization 3,334,499 373,850
Stock based compensation 142,526 153,488
Operating lease expense 65,674 60,458
Changes in assets and liabilities:    
Accounts receivable 291,316 (32,631)
Prepaid expenses and other current assets (1,220,881) 7,735
Other long-term assets (10,019) (55,717)
Accounts payable 202,739 (34,077)
Other accrued liabilities (395,624) 13,342
Net cash used in operating activities (483,320) (1,279,545)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchase of property and equipment (73,500)
Net cash used by investing activities (73,500)  
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from note payable 875,000
Payments on note payable (168,545) (7,654,845)
Proceeds from exercise of warrants 7,160,956
Net cash provided by (used in) financing activities 706,455 (493,889)
Net change in cash 149,635 (1,773,434)
Cash – beginning of period 3,470,339 3,824,491
Cash – end of period 3,619,974 2,051,057
Cash paid for:    
Interest 116,736
Income taxes
XML 18 R8.htm IDEA: XBRL DOCUMENT v3.22.2
Background
6 Months Ended
Jun. 30, 2022
Background [Abstract]  
BACKGROUND

NOTE 1 – BACKGROUND

 

Background

 

The OLB Group, Inc. (“OLB” the “Company”) was incorporated in the State of Delaware on November 18, 2004 and provides services through its wholly-owned subsidiaries and business segments. The Company generates its revenue through two business segments its Fintech Services and Cryptocurrency Business segments.

 

Fintech Services:

 

The Company provides integrated financial and transaction processing services (“Fintech Services”) to businesses throughout the United States. Through its eVance Capital, Inc. subsidiary (“eVance”), the Company provides an integrated suite of third-party merchant payment processing services and related proprietary software enabling products that deliver credit and debit card-based internet payment processing solutions primarily to small and mid-sized merchants operating in physical “brick and mortar” business environments, on the internet and in retail settings requiring both wired and wireless mobile payment solutions. eVance operates as an independent sales organization (“ISO”) generating individual merchant processing contracts in exchange for future residual payments. As a wholesale ISO, eVance has a direct contractual relationship with the merchants and takes greater responsibility in the approval and monitoring of merchants than do retail ISOs and as a result, receives additional consideration for this service and risk. The Company’s Securus365, Inc. (“Securus365”) subsidiary operates as a retail ISO and receives residual income as commission for merchants it places with third party processors.

 

CrowdPay.us, Inc. (“CrowdPay”) is a Crowdfunding platform used to facilitate a capital raise anywhere from $1,000,000 -$50,000,000 of various types of securities under Regulation D, Regulation Crowdfunding, Regulation A and the Securities Act of 1933. To date, the activities of this subsidiary have been nominal.

 

OmniSoft.io, Inc. (“OmniSoft”) operates a software platform for small merchants. The Omnicommerce applications work on an iPad, mobile device and the web and allows customers to sell a store’s products in a physical, retail setting. To date, the activities of this subsidiary have been nominal when compared to the overall business.

 

The Company also provides ecommerce development and consulting services on a project-by-project basis.

 

Cryptocurrency Business:

 

On July 23, 2021, the Company formed DMINT, Inc., a wholly owned subsidiary (“DMINT”). The purpose of DMINT is to operate its business related to cryptocurrency mining (“Cryptocurrency Business”).

 

On July 28, 2021, the Company entered into an exclusive agreement with Cai Energy Blockchain, Inc. (“CAI”) whereby CAI provided the Company with an exclusive natural gas supply agreement (the “Services”). In exchange for the Services, the Company granted CAI options to purchase up to 767,918 shares of Common Stock, $0.0001 par value (with a fair value of approximately $4.5 million on the date of grant) at an exercise price of $0.0001 per share. The natural gas is being used in connection with theCryptocurrency Business.

 

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 lending and transactional business leveraging the Company’s Cryptocurrency Business and Fintech Services business.

 

COVID-19 Impact

 

On January 30, 2020, the World Health Organization declared the COVID-19 (coronavirus) outbreak a “Public Health Emergency of International Concern” and on March 10, 2020, declared it to be a pandemic. The virus and actions taken to mitigate its spread have had and are expected to continue to have a broad adverse impact on the economies and financial markets of many countries, including the geographical areas in which the Company operates. In response to the pandemic, the Company has been working with merchants to address potential changes to the purchase patterns of consumers. In addition, it has been focusing on servicing merchants that sell products with an extended delivery time frame, that have products that are paid for in advance, and that work in the catering, ticketing, limo and travel related businesses which have been directly impacted by the social distancing requirement of the pandemic. Further, for those of the Company’s employees that are able to perform their job remotely, the Company implemented a “remote work” policy and provided employees with the technology necessary to continue to do their jobs from home and for those employees that are unable to perform their job from a remote location, the Company has taken steps to ensure appropriate distancing, continue to require wearing masks in the office and added sanitizing stations along with requiring frequent hand washing and work station cleaning. In addition, the Company has been encouraging its employees to get vaccinated, if possible. At June 30, 2022, all employees were no longer working remotely and had returned to the office. However, the Company continues to monitor and follow the advice of federal and state authorities. The Company has not seen a material impact on its business since states began to roll back restrictions on businesses in the United States.

XML 19 R9.htm IDEA: XBRL DOCUMENT v3.22.2
Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2022
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company as of and for the six month period ending June 30, 2022 and not necessarily indicative of the results to be expected for the full year ending December 31, 2022. These unaudited financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

 

Use of Estimates

  

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s accounting estimates include the collectability of receivables, useful lives of long-lived assets and recoverability of those assets, impairment in fair value of goodwill, valuation allowances for income taxes, stock-based compensation.

 

Principles of Consolidation

 

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, eVance, Securus, CrowdPay, Omnisoft, OLBit, DMINT and Crowd Ignition, Inc. All significant intercompany transactions and balances have been eliminated.

 

Reclassifications

 

Certain reclassifications have been made to the prior year financial information to conform to the presentation used in the financial statements for the three and six months ended June 30, 2022.

 

Concentration of Credit Risk

 

Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash and accounts receivable. The Company’s cash is deposited with major financial institutions. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insurable amount (“FDIC”). As of June 30, 2022, the Company had $2,532,815 of cash in excess of the FDIC’s $250,000 insurance limit.

 

Operating Segments

 

Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”), or decision maker group, in deciding how to allocate resources to an individual segment and in assessing performance. Our chief operating decision–making group is composed of the Chief Executive Officer and Vice President - Finance. The Company has two operating segments as of June 30, 2022. See Note 13, “Segment Information”.

 

Net Loss per Share

 

Basic net loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and dilutive potentially outstanding shares of common stock during the period. The weighted average number of common shares for the six months ended June 30, 2022 and 2021 does not include warrants to acquire up to 8,563,127 and 2,368,978 shares of common stock, respectively, because of their anti-dilutive effect. The weighted average number of common shares for the six months ended June 30, 2022 and 2021 does not include up to 779,029 and 11,112 options, respectively, to purchase common stock because of their anti-dilutive effect.

 

Accounts Receivable

 

Accounts receivable represent contractual residual payments due from the Company’s processing partners or other customers. Residual payments are determined based on transaction fees and revenues from the credit and debit card processing activity of merchants for which the Company’s processing partners pay the Company. Based on collection experience and periodic reviews of outstanding receivables, management considers all accounts receivable for our residual payments to be fully collectible and accordingly, no allowance for doubtful accounts is required; however, CrowdPay has a recorded an allowance of approximately $0 and $38,000 as of June 30, 2022 and December 31, 2021, respectively.

 

Reserve for Chargeback Losses

 

Disputes between a cardholder and a merchant periodically arise as a result of, among other things, cardholder dissatisfaction with merchandise quality or merchant services. Such disputes may not be resolved in the merchant’s favor. In these cases, the transaction is “charged back” to the merchant, which means the purchase price is refunded to the customer through the merchant’s bank and charged to the merchant. If the merchant has inadequate funds, the Company must bear the credit risk for the full amount of the transaction. The Company evaluates the risk for such transactions and estimates the potential loss for chargebacks based primarily on historical experience and records a loss reserve accordingly.

 

Revenue Recognition and Cost of Revenues

 

The Company receives a percentage of recurring monthly transaction related fees comprised of credit and debit card fees charged to merchants, net of association fees, otherwise known as Interchange, as well as certain service charges and convenience fees, for payment processing services, including authorization, capture, clearing, settlement and information reporting of electronic transactions. Fees are calculated on either a percentage of the dollar volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of the transaction. In the case of “wholesale” residual revenue in which the Company has a direct contractual relationship with the merchant, bears risk of chargebacks and performs underwriting on the merchants, the Company records the full discount charged to the merchant as revenue and the related interchange and other processing fees as expenses. In cases of residual revenue where the Company is not responsible for merchant underwriting and has no chargeback liability and has no or limited contractual relationship with the merchant, the Company records the amount it receives from the processor net of interchange and other processing fees as revenue.

 

Disaggregation of Revenue

 

The following table presents the Company’s revenue disaggregated by revenue source:

 

   For the  Three Months Ended
June 30,
   For the Six  Months Ended
June 30,
 
   2022   2021   2022   2021 
Revenue from contracts with customers:                
Wholesale contracts  $7,290,143   $2,004,415   $14,996,351   $3,450,272 
Retail contracts  $379,599   $441,804   $753,372   $870,953 
Other transaction and processing fees  $494,727   $387,353   $936,865   $738,751 
Cryptocurrency mining fees  $207,966   $
   $472,306   $ 
Total fees  $8,372,435   $2,833,572   $17,158,894   $5,059,976 

 

The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). The Company determines revenue recognition through the following steps:

 

  Identification of a contract with a customer;
     
  Identification of the performance obligations in the contract;
     
  Determination of the transaction price;
     
  Allocation of the transaction price to the performance obligations in the contract; and
     
  Recognition of revenue when or as the performance obligations are satisfied.

 

Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Shipping and handling activities associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment activity and recognized as revenue at the point in time at which control of the goods transfers to the customer. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less.

  

Transaction and processing fees

 

Fees for the Company’s transaction and processing arrangements are typically billed and paid on a monthly basis. The Company receives a percentage of recurring monthly transaction related fees comprised of credit and debit card fees charged to merchants, net of association fees, otherwise known as Interchange, as well as certain service charges and convenience fees, for payment processing services, including authorization, capture, clearing, settlement and information reporting of electronic transactions. Fees are calculated on either a percentage of the dollar, volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of the transaction. These merchant services represent a single performance obligation satisfied over time and that the same measure of progress should be used to measure the Company’s progress toward complete satisfaction of the performance obligation. The Company will recognize revenue on a monthly basis as the services are transferred to the customer in short daily increments that qualify for series guidance as the best measure of the transfer of control.

 

In wholesale contracts, the Company recognizes transaction and processing fees on a gross basis as the Company is the principal in the merchant services. The Company has concluded it is the principal because it has a direct contractual relationship with the merchant, is primarily responsible for the delivery of services to the merchants, including performing underwriting, has discretion in setting prices, and bears risk of chargebacks and other merchant losses. The Company also has the unilateral ability to accept or reject a transaction based on criteria established by the Company. As the principal, the Company records the full discount charged to the merchant as revenue and the related interchange and other processing fees within cost of revenues.

 

In retail contracts, the Company is not responsible for merchant underwriting, has no chargeback liability and has no or limited contractual relationship with the merchant. As such, the Company records the net amount it receives from the processor, after interchange and other interchange and other processing fees, as revenue.

 

Merchant equipment sales and other

 

The Company generates revenue through the sale and rental of merchant equipment. The Company satisfies its performance obligation upon delivery of equipment to merchants and recognizes revenue at a point in time. The Company allows for customer returns which are accounted for as variable consideration. The Company estimates these amounts based on historical experience and reduces revenue recognized. The Company invoices customers upon delivery of the equipment to merchants, and payments from such customers are due upon invoicing. The Company offers hardware installment sales to customers with terms ranging from three to forty-eight months. The Company allocates a portion of the consideration received from these arrangements to a financing component when it determines that a significant financing component exists. The financing component is subsequently recognized as financing revenue separate from hardware revenue, within subscription and services-based revenue, over the terms of the arrangement with the customer. Pursuant to practical expedients afforded under ASC 606, the Company does not recognize a financing component for hardware installment sales that have a term of one year or less.

  

Cryptocurrency mining

 

The Company has entered into digital asset mining pools by executing contracts, as amended from time to time, with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are immaterial and are recorded as a deduction from revenue), for successfully adding a block to the blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm.

 

Providing computing power to solve complex cryptographic algorithms in support of the Bitcoin blockchain (in a process known as “solving a block”) is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions.

 

Fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. Each individual unit of cryptocurrency held by the Company is a separate unit of account. There is currently no specific definitive guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the Financial Accounting Standards Board (“FASB”), the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations.

XML 20 R10.htm IDEA: XBRL DOCUMENT v3.22.2
Liquidity and Capital Resources
6 Months Ended
Jun. 30, 2022
Liquidity and Capital Resources [Abstract]  
LIQUIDITY AND CAPITAL RESOURCES

NOTE 3 – LIQUIDITY AND CAPITAL RESOURCES

 

At June 30, 2022, the Company had cash of approximately $3.6 million and working capital of approximately $2.8 million. As such, the Company believes it has sufficient liquidity to fund its future operations and capital requirements for a period of at least twelve months from the date these consolidated financial statements are issued.

XML 21 R11.htm IDEA: XBRL DOCUMENT v3.22.2
Intangible Assets
6 Months Ended
Jun. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
INTANGIBLE ASSETS

NOTE 4 – INTANGIBLE ASSETS

 

Intangible assets, net, consist of the following as of:

 

   June 30,
2022
   December 31,
2021
 
Merchant Portfolios  $2,405,000   $2,405,000 
Less accumulated amortization   (1,744,606)   (1,562,798)
Net residual portfolios  $660,394   $842,202 

 

   June 30,
2022
   December 31,
2021
 
Trade name  $2,500,000   $2,500,000 
Less accumulated amortization   (1,750,000)   (1,500,000)
Net trade name  $750,000   $1,000,000 

 

   June 30,
2022
   December 31,
2021
 
CBD Merchant Portfolio  $18,000,000   $18,000,000 
Less accumulated amortization   (1,428,571)   (190,476)
Net CBD merchant portfolio  $16,571,429   $17,809,524 

  

   June 30,
2022
   December 31,
2021
 
Exclusive agreement to purchase natural gas  $4,499,952   $4,499,952 
Less accumulated amortization   (412,496)   (187,498)
Net mineral rights  $4,087,457   $4,312,454 
           
Total intangible assets, net  $22,069,280   $23,964,180 

 

Amortization expense for the three months ended June 30, 2022 and 2021 was $903,353 and $215,903, respectively.

 

Amortization expense for the six months ended June 30, 2022 and 2021 was $1,901,943 and $431,807, respectively.

 

The Company’s merchant portfolios and tradename are being amortized over respective useful lives of 7 and 5 years.

 

The Company’s agreement to purchase natural gas is being amortized over the useful life of 10 years.

 

The following sets forth the estimated amortization expense related to amortizing intangible assets for the years ended December 31:

 

2022 (six months)  $1,963,190 
2023   3,834,281 
2024   3,320,234 
2025   3,021,424 
2026   3,021,424 
Thereafter   6,908,727 
Total  $22,069,280 

 

The weighted average remaining useful life of amortizing intangible assets was 5.70 years at June 30, 2022.

XML 22 R12.htm IDEA: XBRL DOCUMENT v3.22.2
Property and Equipment
6 Months Ended
Jun. 30, 2022
Property and Equipment [Abstract]  
PROPERTY AND EQUIPMENT

NOTE 5 – PROPERTY AND EQUIPMENT

 

Long lived assets, including property and equipment assets to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Impairment losses are recognized if expected future cash flows of the related assets are less than their carrying values. Measurement of an impairment loss is based on the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.

 

Property and equipment are first recorded at cost. Depreciation and is computed using the straight-line method over the estimated useful lives of the various classes of assets.

 

Maintenance and repair expenses, as incurred, are charged to expense. Betterments and renewals are capitalized in plant and equipment accounts. Cost and accumulated depreciation applicable to items replaced or retired are eliminated from the related accounts with any gain or loss on the disposition included as income.

  

Assets stated at cost, less accumulated depreciation consisted of the following:

 

   June 30
2022
   December 31,
2021
 
Furniture and Fixtures  $36,471   $36,471 
Office Equipment   641,747    474,873 
Computer Software   182,345    182,345 
Leasehold Improvements   17,877    17,877 
Cryptocurrency Mining Equipment   9,410,000    9,410,000 
Total   10,288,440    10,121,566 
Less accumulated depreciation   (2,760,943)   (1,154,470)
Property and Equipment, net  $7,527,497   $8,967,096 

 

Depreciation expense

 

Depreciation expense for the six months ended June 30, 2022 and 2021 was $1,601,292 and $7,042, respectively.

XML 23 R13.htm IDEA: XBRL DOCUMENT v3.22.2
Note Payable
6 Months Ended
Jun. 30, 2022
Debt Disclosure [Abstract]  
NOTE PAYABLE

NOTE 6 – NOTE PAYABLE

 

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 in the Cannabidiol (or “CBD”) industry, along with other merchants utilizing financial transaction processing services (the “Purchased Assets”). The purchase price was $20 million, with $16 million paid at closing, $2 million payable within six months after closing, and a $2 million payment to be transferred to an escrow account, contingent upon an Attrition Adjustment, as described in the Agreement.  Company management has recognized a liability for the contingent payment amount. However, on July 18, 2022, the Company notified the Seller of certain breaches of contract relating to, among other things, representations made by Seller in the Agreement, for which it will seek a reduction or cancellation of the final payment and a potential reduction in the overall purchase price.

 

On November 29, 2021, the Company entered into a Master Equipment Finance Agreement (the “MFA”) with VFS LLC (“VFS”) which would allow the Company to finance the purchase of certain equipment. The collateral and interest rate are determined at the time the Company borrows the funds. During the six months ended June 30, 2022, the Company received, as an initial draw on the MFA, $875,000 from VFS (the “Equipment Loan”). The Equipment Loan is secured by cryptocurrency mining computers being utilized by DMINT. The Equipment Loan requires monthly payments of $24,837.75 until the loan is repaid in full or it matures on November 29, 2024, requiring a full payment of all principal and accrued and unpaid interest.

XML 24 R14.htm IDEA: XBRL DOCUMENT v3.22.2
Stock Options
6 Months Ended
Jun. 30, 2022
Share-Based Payment Arrangement [Abstract]  
STOCK OPTIONS

NOTE 7 – STOCK OPTIONS

 

A summary of the status of the Company’s outstanding stock options and changes during the six months ended June 30, 2022 is presented below:

 

Stock Options  Options   Weighted
Average
Exercise
Price
   Aggregate
Intrinsic
Value
 
Options outstanding December 31, 2020   285,173   $0.0001   $1,408,755 
Granted   774,585   $0.0001    
-
 
Exercised   (159,103)  $
-
    
-
 
Expired   (6,667)  $
-
    
-
 
Options outstanding December 31, 2021   893,988   $0.0001   $2,369,065 
Granted   
-
   $
-
    
-
 
Exercised   
-
   $
-
    
-
 
Expired   (112,736)  $
-
    
-
 
Options outstanding June 30, 2022   781,252   $0.0001      
Shares exercisable at June 30, 2022   774,586   $0.0001   $683,572 
XML 25 R15.htm IDEA: XBRL DOCUMENT v3.22.2
Warrants
6 Months Ended
Jun. 30, 2022
Warrant [Abstract]  
WARRANTS

NOTE 8 – WARRANTS

        

A summary of the status of the Company’s outstanding stock warrants and changes during the six months ended June 30, 2022 is presented below:

 

   Number of
Warrants
   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contract
Term
 
Outstanding, December 31, 2020   3,353,698    4.61    4.81 
Cancelled   (40,000)  $7.50    
-
 
Underwriter Warrants   8,881,333   $3.62    
-
 
Warrant A Exercised   (742,220)  $9.00    
-
 
Warrant B Exercised   (313,320)  $4.50    
-
 
Underwriter Warrant Exercised   (1,176,364)  $0.0001    
-
 
Outstanding, December 31, 2021   9,963,127   $5.02    4.55 
Underwriter Warrant Exercised   (1,400,000)  $0.0001    
-
 
Outstanding, June 30, 2022   8,563,127   $5.10    4.45 
XML 26 R16.htm IDEA: XBRL DOCUMENT v3.22.2
Operating Leases
6 Months Ended
Jun. 30, 2022
Operating Leases [Abstract]  
OPERATING LEASES

NOTE 9 – OPERATING LEASES

 

On June 24, 2020, eVance, Inc. (“eVance”) entered into a Lease Agreement (the “Lease”) with Pergament Lodi, LLC (the “Lessor”) relating to approximately 4,277 square feet of property located at 960 Northpoint Parkway, Alpharetta, Georgia, Suite 400. The term of the Lease is for thirty-nine (39) months commencing September 1, 2020. The monthly base rent is $8,019 for the first twelve (12) months increasing thereafter to $8,768. The total rent for the entire lease term is $315,044 and $8,768 is payable as a security deposit. The first three months of rent will be abated so long as eVance is not in default of any portion of the Lease.

 

On January 11, 2022, DMINT entered into two leases (the “Leases”) in Bradford, Pennsylvania relating to a combined 10,000 square feet of property located at the Bradford Regional Airport Authority multi-tenant building in Lafayette Township. The facility is in the process of being converted into a cryptocurrency mining data center powered on the local power grid in tandem with natural gas power. The location will be used for DMINT’s mining operation with capacity for up to 2,000 Antminer S19j PRO machines. The Leases are each for a term of five years, ending on the later of the date of occupancy and November 10, 2026. The monthly base rent for “Cell 3”, comprising 4,000 square feet, is $1,667 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 $250,00 and $8,768 is payable as a security deposit.

 

   Balance Sheet Classification  June 30,
2022
 
Asset       
Operating lease asset  Right of use asset  $336,864 
Total lease asset     $336,864 
         
Liability        
Operating lease liability – current portion  Current operating lease liability  $135,603 
Operating lease liability – noncurrent portion  Long-term operating lease liability   198,623 
Total lease liability     $334,226 

 

Lease obligations at June 30, 2022 consisted of the following:

 

For the year ended December 31:    
2022 (six months)  $75,568 
2023   144,393 
2024   50,000 
2025   50,000 
2026   41,667 
Total payments  $361,628 
Amount representing interest  $(20,955)
Lease obligation, net   340,673 
Less current portion   (142,050)
Lease obligation – long term  $198,623 

 

Rent expense for the three months ended June 30, 2022 and 2021, was $52,572 and $24,908, respectively.

 

Rent expense for the six months ended June 30, 2022 and 2021, was $94,984 and $49,817, respectively.

XML 27 R17.htm IDEA: XBRL DOCUMENT v3.22.2
Common Stock
6 Months Ended
Jun. 30, 2022
Common Stock [Abstract]  
COMMON STOCK

NOTE 10 - COMMON STOCK

 

In January 2022, Armistice Capital, received 1,400,000 shares of common stock upon the exercise of 1,400,000 warrants at $0.0001.

XML 28 R18.htm IDEA: XBRL DOCUMENT v3.22.2
Preferred Stock
6 Months Ended
Jun. 30, 2022
Preferred Stock [Abstract]  
PREFERRED STOCK

NOTE 11 – PREFERRED STOCK

 

Our certificate of incorporation authorizes the issuance of 50,000,000 shares of blank check preferred stock with such designation, rights and preferences as may be determined from time to time by our board of directors. The Company currently has 4,633 shares of preferred stock issued and outstanding.

 

Series A Preferred Stock

 

On August 7, 2020, we filed a Certificate of Designations, Preferences and Rights of Series A Preferred Stock (the “Certificate of Designations”) with the Secretary of State of Delaware. The Certificate of Designations will provide that the Company may issue up to 10,000 shares of Series A Preferred Stock at a stated value (the “Stated Value”) of $1,000 per share. Holders of Series A Preferred Stock are entitled to the following rights and preferences.

 

Dividends

 

The Series A Preferred Stockholders are entitled to receive cash dividends at a rate per share (as a percentage of the Stated Value per share) of 12% per annum. Dividends accrue quarterly. Dividends are to be paid to the holders from funds legally available for payment and as approved for payment by the Board of Directors of the Company.

 

Conversion

 

The Series A Preferred Stock holders may convert, at their option, on or after the date on which the Term Loan is repaid in full, each share of Series A Preferred Stock (along with accrued but unpaid dividends thereon) into such number of shares of common stock as determined by dividing the Stated Value by the conversion price. The conversion price for the Series A Preferred Stock will be equal to the offering price per Unit in this offering and will be subject to adjustment for splits and the like. The holders of Series A Preferred Stock will only be permitted to convert their shares of Series A Preferred Stock into shares of common stock at such time as the Term Loan has been repaid in full and there is no further outstanding obligations regarding such indebtedness.

 

Voting

 

Each holder of a share of Series A Preferred Stock will have the right to vote its shares of Series A Preferred Stock with the common stock on an as-converted basis, and with respect to such votes, such holder shall have full voting rights and powers equal to the voting rights and powers of the holders of common stock, and shall be entitled, to notice of any stockholders’ meeting in accordance with the Company’s bylaws, and shall be entitled to vote, together with holders of common stock, with respect to any question upon which holders of common stock have the right to vote. Fractional votes shall not be permitted, and such shares shall be rounded up.

 

Liquidation Preference

 

Each share of Series A Preferred Stock will have a liquidation preference equal to the Stated Value plus any accrued but unpaid dividends thereon. In the event of a liquidation, dissolution or winding up of the Company (which includes any merger, reorganization, sale of assets in which control of the Company is transferred or event which results in all or substantially all of the Company’s assets being transferred), the holders of Series A Preferred Stock shall be entitled to receive out of the assets of the Company, before any payment is made to the holders of the Company’s common stock and either in preference to or pari pasu with the holders of any other series of preferred stock that may be issued in the future, a per share amount equal to the liquidation preference.

XML 29 R19.htm IDEA: XBRL DOCUMENT v3.22.2
Related Party Transactions
6 Months Ended
Jun. 30, 2022
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 12 – RELATED PARTY TRANSACTIONS

 

On January 3, 2022, the Company entered into a share exchange agreement with all of the shareholders of Crowd Ignition, Inc. (“Crowd Ignition”) whereby the Company purchased 100% of the equity of Crowd Ignition in exchange for 1,318,408 shares of the common stock, par value $0.0001 of the Company (the “CI Issued Shares”). The value of the CI Issued Shares was, for purposes of the Agreement, based on the closing trading price of the Company on October 1, 2021 (the date on which a third-party fairness opinion was issued), resulting in an aggregate purchase price for Crowd Ignition of $5.3 million. The purchase price was used solely to establish the agreed upon purchase price between the parties and not for accounting purposes.

 

Crowd Ignition is a web-based crowdfunding software system. Ronny Yakov, Chairman and CEO of the Company and John Herzog, a significant shareholder of the Company, collectively owned 100% of the equity of Crowd Ignition. The acquisition of Crowd Ignition., was determined to be a common control transaction as each Company has the same two shareholders with a majority ownership. As a result, the assets and liabilities assumed were recorded on the Company’s condensed consolidated financial statements at their respective carry-over basis; however, as of January 3, 2022, Crowd Ignition has no assets, liabilities or other operations.

XML 30 R20.htm IDEA: XBRL DOCUMENT v3.22.2
Commitments and Contingencies
6 Months Ended
Jun. 30, 2022
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 13 – COMMITMENTS AND CONTINGENCIES

 

In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements.

 

On January 11, 2022, the Company entered into a new employment agreement with Mr. Yakov (the “Yakov Agreement”) and a new employment agreement with Mr. Smith (the “Smith Agreement”). The Yakov Agreement maintains Mr. Yakov’s role as the Company’s Chief Executive Officer through December 31, 2027 and extended for one-year terms thereafter. The Smith Agreement maintains Mr. Smith’s role as the Company’s Vice President, Finance unless terminated or upon his resignation.

 

The Yakov Agreement increases Mr. Yakov’s base salary to $750,000 and he will continue to be eligible for insurance coverages and benefits available to the Company’s employees pursuant to the terms of such plans. Mr. Yakov also received a $490,000 bonus for acquisitions closed by the Company in 2020 and 2021 and he will be eligible to receive an acquisition bonus equal to two percent (2%) of the gross purchase price paid in connection with a future acquisition. Mr. Yakov shall be eligible to receive an annual bonus of Three Hundred Thousand Dollars ($300,000) based on performance criteria established by the Board. In addition, on an annual basis, Mr. Yakov shall receive options to purchase up to 200,000 shares of common stock of the Company at an exercise price of $0.001 per share. The Company’s existing option plan will need to be amended to increase the number of available shares before the options to Mr. Yakov can be granted.

 

The Yakov Agreement also states that, if Mr. Yakov’s employment is terminated without cause or he voluntarily terminates his employment for good reason, he will continue to receive his base salary for the remainder of the term along with all earned bonuses. In the event the termination is in connection with Mr. Yakov’s death, disability or bankruptcy of the Company, he will receive the pro rata amount of his base salary through the termination date and all bonuses earned through the termination date.

 

The Smith Agreement increases Mr. Smith’s base salary to $350,000 and he will continue to be eligible for insurance coverages and benefits available to the Company’s employees pursuant to the terms of such plans. Mr. Smith shall be eligible to receive an annual bonus of One Hundred Fifty Thousand Dollars ($150,000) based on performance criteria established by the Committee. In addition, Mr. Smith shall receive options (the “Options”) to purchase up to 275,000 shares of common stock of the Company at an exercise price of $0.001 per share. The Options vest equally over five years at the rate of one-fifth (1/5th) beginning on the anniversary of the Effective Date of the Agreement. The Company’s existing option plan will need to be amended to increase the number of available shares before the options to Mr. Smith can be granted.

 

The Smith Agreement also states that, if Mr. Smith’s employment is terminated without cause or he voluntarily terminates his employment for good reason, he will continue to receive his base salary for the remainder of the term along with all earned bonuses. In the event the termination is in connection with Mr. Smith’s death, disability or bankruptcy of the Company, he will receive the pro rata amount of his base salary through the termination date and all bonuses earned through the termination date.

 

The Company had an adverse litigation judgment against it during the fiscal year relating to, among other things, a breach of contract claim, which included damages and attorney fees in favor of the Plaintiff. The Company appealed the judgment of both the award of damages and attorney fees and it prevailed in July 2022 when the case was remanded for retrial. As a result, the accrued expense related to the damage award has been eliminated.

XML 31 R21.htm IDEA: XBRL DOCUMENT v3.22.2
Segments
6 Months Ended
Jun. 30, 2022
Segment Reporting [Abstract]  
SEGMENTS

NOTE 14 - SEGMENTS

 

The Company applies ASC 280, Segment Reporting, in determining its reportable segments. The Company has two reportable segments during 2021: Cryptocurrency Mining and Fintech Services. The guidance requires that segment disclosures present the measure(s) used by the Chief Operating Decision Maker (“CODM”) to decide how to allocate resources and for purposes of assessing such segments’ performance. The Company’s CODM is comprised of several members of its executive management team who use revenue and expenses of our two reporting segments to assess the performance of the business of our reportable operating segments.

 

The following tables details revenue, operating expenses, and assets for the Company’s reportable segments for the three months ended June 30, 2022.

 

   For  the Three Months ended
June 30,
   For the Six  Months ended
June 30,
 
   2022   2021   2022   2021 
Reportable segment revenue:                
Revenue, net - cryptocurrency mining  $207,966   $
   $472,306   $
 
Fintech services revenue   8,164,469    2,833,572    16,686,588    5,059,976 
Total segment and consolidated revenue  $8,372,435   $2,833,572   $17,158,894   $5,059,976 

 

  

June 30,

2022

   December 31,
2021
 
Total Assets:        
Cryptocurrency mining  $9,081,126   $9,749,652 
Fintech services   34,137,411    33,779,839 
   $43,218,537   $43,529,491 
XML 32 R22.htm IDEA: XBRL DOCUMENT v3.22.2
Subsequent Events
6 Months Ended
Jun. 30, 2022
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 15 – SUBSEQUENT EVENTS

 

On July 12, 2022, the Board of the Company authorized a share repurchase program, pursuant to which the Company may repurchase up to 1 million shares of its outstanding shares of common stock. The Board authorized the Company to purchase its common stock from time to time on a discretionary basis through open market purchases, privately negotiated transactions or other means, including trading plans intended to qualify under Rule 10b5-1 of the Exchange Act, in accordance with applicable federal securities laws and other applicable legal requirements. The Company expects to fund these repurchases through existing cash balances. Decisions regarding the amount and the timing of purchases under the program will be influenced by the Company’s cash on hand, cash flows from operations, general market conditions and other factors. The Company is not obligated to acquire any particular amount of its common stock. This program has no set termination date and may be suspended or discontinued by the Board at any time. 

XML 33 R23.htm IDEA: XBRL DOCUMENT v3.22.2
Accounting Policies, by Policy (Policies)
6 Months Ended
Jun. 30, 2022
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

 

The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company as of and for the six month period ending June 30, 2022 and not necessarily indicative of the results to be expected for the full year ending December 31, 2022. These unaudited financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

 

Use of Estimates

Use of Estimates

  

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s accounting estimates include the collectability of receivables, useful lives of long-lived assets and recoverability of those assets, impairment in fair value of goodwill, valuation allowances for income taxes, stock-based compensation.

 

Principles of Consolidation

Principles of Consolidation

 

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, eVance, Securus, CrowdPay, Omnisoft, OLBit, DMINT and Crowd Ignition, Inc. All significant intercompany transactions and balances have been eliminated.

 

Reclassifications

Reclassifications

 

Certain reclassifications have been made to the prior year financial information to conform to the presentation used in the financial statements for the three and six months ended June 30, 2022.

 

Concentration of Credit Risk

Concentration of Credit Risk

 

Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash and accounts receivable. The Company’s cash is deposited with major financial institutions. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insurable amount (“FDIC”). As of June 30, 2022, the Company had $2,532,815 of cash in excess of the FDIC’s $250,000 insurance limit.

 

Operating Segments

Operating Segments

 

Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”), or decision maker group, in deciding how to allocate resources to an individual segment and in assessing performance. Our chief operating decision–making group is composed of the Chief Executive Officer and Vice President - Finance. The Company has two operating segments as of June 30, 2022. See Note 13, “Segment Information”.

 

Net Loss per Share

Net Loss per Share

 

Basic net loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and dilutive potentially outstanding shares of common stock during the period. The weighted average number of common shares for the six months ended June 30, 2022 and 2021 does not include warrants to acquire up to 8,563,127 and 2,368,978 shares of common stock, respectively, because of their anti-dilutive effect. The weighted average number of common shares for the six months ended June 30, 2022 and 2021 does not include up to 779,029 and 11,112 options, respectively, to purchase common stock because of their anti-dilutive effect.

 

Accounts Receivable

Accounts Receivable

 

Accounts receivable represent contractual residual payments due from the Company’s processing partners or other customers. Residual payments are determined based on transaction fees and revenues from the credit and debit card processing activity of merchants for which the Company’s processing partners pay the Company. Based on collection experience and periodic reviews of outstanding receivables, management considers all accounts receivable for our residual payments to be fully collectible and accordingly, no allowance for doubtful accounts is required; however, CrowdPay has a recorded an allowance of approximately $0 and $38,000 as of June 30, 2022 and December 31, 2021, respectively.

 

Reserve for Chargeback Losses

Reserve for Chargeback Losses

 

Disputes between a cardholder and a merchant periodically arise as a result of, among other things, cardholder dissatisfaction with merchandise quality or merchant services. Such disputes may not be resolved in the merchant’s favor. In these cases, the transaction is “charged back” to the merchant, which means the purchase price is refunded to the customer through the merchant’s bank and charged to the merchant. If the merchant has inadequate funds, the Company must bear the credit risk for the full amount of the transaction. The Company evaluates the risk for such transactions and estimates the potential loss for chargebacks based primarily on historical experience and records a loss reserve accordingly.

 

Revenue Recognition and Cost of Revenues

Revenue Recognition and Cost of Revenues

 

The Company receives a percentage of recurring monthly transaction related fees comprised of credit and debit card fees charged to merchants, net of association fees, otherwise known as Interchange, as well as certain service charges and convenience fees, for payment processing services, including authorization, capture, clearing, settlement and information reporting of electronic transactions. Fees are calculated on either a percentage of the dollar volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of the transaction. In the case of “wholesale” residual revenue in which the Company has a direct contractual relationship with the merchant, bears risk of chargebacks and performs underwriting on the merchants, the Company records the full discount charged to the merchant as revenue and the related interchange and other processing fees as expenses. In cases of residual revenue where the Company is not responsible for merchant underwriting and has no chargeback liability and has no or limited contractual relationship with the merchant, the Company records the amount it receives from the processor net of interchange and other processing fees as revenue.

 

Disaggregation of Revenue

Disaggregation of Revenue

 

The following table presents the Company’s revenue disaggregated by revenue source:

 

   For the  Three Months Ended
June 30,
   For the Six  Months Ended
June 30,
 
   2022   2021   2022   2021 
Revenue from contracts with customers:                
Wholesale contracts  $7,290,143   $2,004,415   $14,996,351   $3,450,272 
Retail contracts  $379,599   $441,804   $753,372   $870,953 
Other transaction and processing fees  $494,727   $387,353   $936,865   $738,751 
Cryptocurrency mining fees  $207,966   $
   $472,306   $ 
Total fees  $8,372,435   $2,833,572   $17,158,894   $5,059,976 

 

The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). The Company determines revenue recognition through the following steps:

 

  Identification of a contract with a customer;
     
  Identification of the performance obligations in the contract;
     
  Determination of the transaction price;
     
  Allocation of the transaction price to the performance obligations in the contract; and
     
  Recognition of revenue when or as the performance obligations are satisfied.

 

Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Shipping and handling activities associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment activity and recognized as revenue at the point in time at which control of the goods transfers to the customer. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less.

  

Transaction and processing fees

Transaction and processing fees

 

Fees for the Company’s transaction and processing arrangements are typically billed and paid on a monthly basis. The Company receives a percentage of recurring monthly transaction related fees comprised of credit and debit card fees charged to merchants, net of association fees, otherwise known as Interchange, as well as certain service charges and convenience fees, for payment processing services, including authorization, capture, clearing, settlement and information reporting of electronic transactions. Fees are calculated on either a percentage of the dollar, volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of the transaction. These merchant services represent a single performance obligation satisfied over time and that the same measure of progress should be used to measure the Company’s progress toward complete satisfaction of the performance obligation. The Company will recognize revenue on a monthly basis as the services are transferred to the customer in short daily increments that qualify for series guidance as the best measure of the transfer of control.

 

In wholesale contracts, the Company recognizes transaction and processing fees on a gross basis as the Company is the principal in the merchant services. The Company has concluded it is the principal because it has a direct contractual relationship with the merchant, is primarily responsible for the delivery of services to the merchants, including performing underwriting, has discretion in setting prices, and bears risk of chargebacks and other merchant losses. The Company also has the unilateral ability to accept or reject a transaction based on criteria established by the Company. As the principal, the Company records the full discount charged to the merchant as revenue and the related interchange and other processing fees within cost of revenues.

 

In retail contracts, the Company is not responsible for merchant underwriting, has no chargeback liability and has no or limited contractual relationship with the merchant. As such, the Company records the net amount it receives from the processor, after interchange and other interchange and other processing fees, as revenue.

 

Merchant equipment sales and other

Merchant equipment sales and other

 

The Company generates revenue through the sale and rental of merchant equipment. The Company satisfies its performance obligation upon delivery of equipment to merchants and recognizes revenue at a point in time. The Company allows for customer returns which are accounted for as variable consideration. The Company estimates these amounts based on historical experience and reduces revenue recognized. The Company invoices customers upon delivery of the equipment to merchants, and payments from such customers are due upon invoicing. The Company offers hardware installment sales to customers with terms ranging from three to forty-eight months. The Company allocates a portion of the consideration received from these arrangements to a financing component when it determines that a significant financing component exists. The financing component is subsequently recognized as financing revenue separate from hardware revenue, within subscription and services-based revenue, over the terms of the arrangement with the customer. Pursuant to practical expedients afforded under ASC 606, the Company does not recognize a financing component for hardware installment sales that have a term of one year or less.

  

Cryptocurrency mining

Cryptocurrency mining

 

The Company has entered into digital asset mining pools by executing contracts, as amended from time to time, with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are immaterial and are recorded as a deduction from revenue), for successfully adding a block to the blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm.

 

Providing computing power to solve complex cryptographic algorithms in support of the Bitcoin blockchain (in a process known as “solving a block”) is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions.

 

Fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. Each individual unit of cryptocurrency held by the Company is a separate unit of account. There is currently no specific definitive guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the Financial Accounting Standards Board (“FASB”), the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations.

XML 34 R24.htm IDEA: XBRL DOCUMENT v3.22.2
Summary of Significant Accounting Policies (Tables)
6 Months Ended
Jun. 30, 2022
Accounting Policies [Abstract]  
Schedule of disaggregated by revenue
   For the  Three Months Ended
June 30,
   For the Six  Months Ended
June 30,
 
   2022   2021   2022   2021 
Revenue from contracts with customers:                
Wholesale contracts  $7,290,143   $2,004,415   $14,996,351   $3,450,272 
Retail contracts  $379,599   $441,804   $753,372   $870,953 
Other transaction and processing fees  $494,727   $387,353   $936,865   $738,751 
Cryptocurrency mining fees  $207,966   $
   $472,306   $ 
Total fees  $8,372,435   $2,833,572   $17,158,894   $5,059,976 

 

XML 35 R25.htm IDEA: XBRL DOCUMENT v3.22.2
Intangible Assets (Tables)
6 Months Ended
Jun. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of intangible assets, net
   June 30,
2022
   December 31,
2021
 
Merchant Portfolios  $2,405,000   $2,405,000 
Less accumulated amortization   (1,744,606)   (1,562,798)
Net residual portfolios  $660,394   $842,202 

 

   June 30,
2022
   December 31,
2021
 
Trade name  $2,500,000   $2,500,000 
Less accumulated amortization   (1,750,000)   (1,500,000)
Net trade name  $750,000   $1,000,000 

 

   June 30,
2022
   December 31,
2021
 
CBD Merchant Portfolio  $18,000,000   $18,000,000 
Less accumulated amortization   (1,428,571)   (190,476)
Net CBD merchant portfolio  $16,571,429   $17,809,524 

  

   June 30,
2022
   December 31,
2021
 
Exclusive agreement to purchase natural gas  $4,499,952   $4,499,952 
Less accumulated amortization   (412,496)   (187,498)
Net mineral rights  $4,087,457   $4,312,454 
           
Total intangible assets, net  $22,069,280   $23,964,180 

 

Schedule of estimated amortization expense related to amortizing intangible assets
2022 (six months)  $1,963,190 
2023   3,834,281 
2024   3,320,234 
2025   3,021,424 
2026   3,021,424 
Thereafter   6,908,727 
Total  $22,069,280 

 

XML 36 R26.htm IDEA: XBRL DOCUMENT v3.22.2
Property and Equipment (Tables)
6 Months Ended
Jun. 30, 2022
Property and Equipment [Abstract]  
Schedule of assets stated at cost, less accumulated depreciation
   June 30
2022
   December 31,
2021
 
Furniture and Fixtures  $36,471   $36,471 
Office Equipment   641,747    474,873 
Computer Software   182,345    182,345 
Leasehold Improvements   17,877    17,877 
Cryptocurrency Mining Equipment   9,410,000    9,410,000 
Total   10,288,440    10,121,566 
Less accumulated depreciation   (2,760,943)   (1,154,470)
Property and Equipment, net  $7,527,497   $8,967,096 

 

XML 37 R27.htm IDEA: XBRL DOCUMENT v3.22.2
Stock Options (Tables)
6 Months Ended
Jun. 30, 2022
Share-Based Payment Arrangement [Abstract]  
Schedule of outstanding stock options and changes
Stock Options  Options   Weighted
Average
Exercise
Price
   Aggregate
Intrinsic
Value
 
Options outstanding December 31, 2020   285,173   $0.0001   $1,408,755 
Granted   774,585   $0.0001    
-
 
Exercised   (159,103)  $
-
    
-
 
Expired   (6,667)  $
-
    
-
 
Options outstanding December 31, 2021   893,988   $0.0001   $2,369,065 
Granted   
-
   $
-
    
-
 
Exercised   
-
   $
-
    
-
 
Expired   (112,736)  $
-
    
-
 
Options outstanding June 30, 2022   781,252   $0.0001      
Shares exercisable at June 30, 2022   774,586   $0.0001   $683,572 
XML 38 R28.htm IDEA: XBRL DOCUMENT v3.22.2
Warrants (Tables)
6 Months Ended
Jun. 30, 2022
Warrant [Abstract]  
Schedule of outstanding stock warrants and changes
   Number of
Warrants
   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contract
Term
 
Outstanding, December 31, 2020   3,353,698    4.61    4.81 
Cancelled   (40,000)  $7.50    
-
 
Underwriter Warrants   8,881,333   $3.62    
-
 
Warrant A Exercised   (742,220)  $9.00    
-
 
Warrant B Exercised   (313,320)  $4.50    
-
 
Underwriter Warrant Exercised   (1,176,364)  $0.0001    
-
 
Outstanding, December 31, 2021   9,963,127   $5.02    4.55 
Underwriter Warrant Exercised   (1,400,000)  $0.0001    
-
 
Outstanding, June 30, 2022   8,563,127   $5.10    4.45 
XML 39 R29.htm IDEA: XBRL DOCUMENT v3.22.2
Operating Leases (Tables)
6 Months Ended
Jun. 30, 2022
Operating Leases [Abstract]  
Schedule of balance sheet classification
   Balance Sheet Classification  June 30,
2022
 
Asset       
Operating lease asset  Right of use asset  $336,864 
Total lease asset     $336,864 
         
Liability        
Operating lease liability – current portion  Current operating lease liability  $135,603 
Operating lease liability – noncurrent portion  Long-term operating lease liability   198,623 
Total lease liability     $334,226 

 

Schedule of lease obligations
For the year ended December 31:    
2022 (six months)  $75,568 
2023   144,393 
2024   50,000 
2025   50,000 
2026   41,667 
Total payments  $361,628 
Amount representing interest  $(20,955)
Lease obligation, net   340,673 
Less current portion   (142,050)
Lease obligation – long term  $198,623 

 

XML 40 R30.htm IDEA: XBRL DOCUMENT v3.22.2
Segments (Tables)
6 Months Ended
Jun. 30, 2022
Segment Reporting [Abstract]  
Schedule of details revenue, operating expenses
   For  the Three Months ended
June 30,
   For the Six  Months ended
June 30,
 
   2022   2021   2022   2021 
Reportable segment revenue:                
Revenue, net - cryptocurrency mining  $207,966   $
   $472,306   $
 
Fintech services revenue   8,164,469    2,833,572    16,686,588    5,059,976 
Total segment and consolidated revenue  $8,372,435   $2,833,572   $17,158,894   $5,059,976 

 

Schedule of total assets
  

June 30,

2022

   December 31,
2021
 
Total Assets:        
Cryptocurrency mining  $9,081,126   $9,749,652 
Fintech services   34,137,411    33,779,839 
   $43,218,537   $43,529,491 
XML 41 R31.htm IDEA: XBRL DOCUMENT v3.22.2
Background (Details) - USD ($)
1 Months Ended
Jul. 28, 2021
Jun. 30, 2022
Background (Details) [Line Items]    
Purchase of shares (in Shares) 767,918  
Minimum [Member]    
Background (Details) [Line Items]    
Capital raise   $ 1,000,000
Maximum [Member]    
Background (Details) [Line Items]    
Capital raise   $ 50,000,000
Cai Energy Blockchain, Inc.[Member]    
Background (Details) [Line Items]    
Common stock par value (in Dollars per share) $ 0.0001  
Fair market value $ 4,500,000  
Exercise price per share (in Dollars per share) $ 0.0001  
XML 42 R32.htm IDEA: XBRL DOCUMENT v3.22.2
Summary of Significant Accounting Policies (Details) - USD ($)
6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
Dec. 31, 2021
Accounting Policies [Abstract]      
Cash amount $ 2,532,815    
FDIC’s insurance limit $ 250,000    
Weighted average number of common shares anti-dilutive effect 8,563,127 2,368,978  
Weighted average number of common shares 779,029 11,112  
Allowance for doubtful accounts receivable $ 0   $ 38,000
XML 43 R33.htm IDEA: XBRL DOCUMENT v3.22.2
Summary of Significant Accounting Policies (Details) - Schedule of disaggregated by revenue - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
Jun. 30, 2022
Jun. 30, 2021
Revenue from contracts with customers:        
Wholesale contracts $ 7,290,143 $ 2,004,415 $ 14,996,351 $ 3,450,272
Retail contracts 379,599 441,804 753,372 870,953
Other transaction and processing fees 494,727 387,353 936,865 738,751
Cryptocurrency mining fees 207,966 472,306  
Total fees $ 8,372,435 $ 2,833,572 $ 17,158,894 $ 5,059,976
XML 44 R34.htm IDEA: XBRL DOCUMENT v3.22.2
Liquidity and Capital Resources (Details)
$ in Millions
Jun. 30, 2022
USD ($)
Liquidity And Capital Resources [Abstract]  
Cash $ 3.6
Working capital deficit $ 2.8
XML 45 R35.htm IDEA: XBRL DOCUMENT v3.22.2
Intangible Assets (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
Jun. 30, 2022
Jun. 30, 2021
Intangible Assets (Details) [Line Items]        
Amortization expense $ 903,353 $ 215,903 $ 1,901,943 $ 431,807
Amortized over the useful life     10 years  
Weighted average useful life     5 years 8 months 12 days  
Maximum [Member]        
Intangible Assets (Details) [Line Items]        
Purchase natural gas useful life     7 years  
Minimum [Member]        
Intangible Assets (Details) [Line Items]        
Purchase natural gas useful life     5 years  
XML 46 R36.htm IDEA: XBRL DOCUMENT v3.22.2
Intangible Assets (Details) - Schedule of intangible assets, net - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2022
Dec. 31, 2021
Schedule of intangible assets, net [Abstract]    
Merchant Portfolios $ 2,405,000 $ 2,405,000
Less accumulated amortization (1,744,606) (1,562,798)
Net residual portfolios 660,394 842,202
Trade name 2,500,000 2,500,000
Less accumulated amortization (1,750,000) (1,500,000)
Net trade name 750,000 1,000,000
CBD Merchant Portfolio 18,000,000 18,000,000
Less accumulated amortization (1,428,571) (190,476)
Net CBD merchant portfolio 16,571,429 17,809,524
Exclusive agreement to purchase natural gas 4,499,952 4,499,952
Less accumulated amortization (412,496) (187,498)
Net mineral rights 4,087,457 4,312,454
Total intangible assets, net $ 22,069,280 $ 23,964,180
XML 47 R37.htm IDEA: XBRL DOCUMENT v3.22.2
Intangible Assets (Details) - Schedule of estimated amortization expense related to amortizing intangible assets
6 Months Ended
Jun. 30, 2022
USD ($)
Schedule of estimated amortization expense related to amortizing intangible assets [Abstract]  
2022 (six months) $ 1,963,190
2023 3,834,281
2024 3,320,234
2025 3,021,424
2026 3,021,424
Thereafter 6,908,727
Total $ 22,069,280
XML 48 R38.htm IDEA: XBRL DOCUMENT v3.22.2
Property and Equipment (Details) - USD ($)
Jun. 30, 2022
Jun. 30, 2021
Property and Equipment [Abstract]    
Depreciation expense $ 1,601,292 $ 7,042
XML 49 R39.htm IDEA: XBRL DOCUMENT v3.22.2
Property and Equipment (Details) - Schedule of assets stated at cost, less accumulated depreciation - USD ($)
Jun. 30, 2022
Dec. 31, 2021
Property, Plant and Equipment [Line Items]    
Property, Plant and Equipment, Gross $ 10,288,440 $ 10,121,566
Less accumulated depreciation (2,760,943) (1,154,470)
Property and Equipment, net 7,527,497 8,967,096
Furniture and Fixtures [Member]    
Property, Plant and Equipment [Line Items]    
Property, Plant and Equipment, Gross 36,471 36,471
Office Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Property, Plant and Equipment, Gross 641,747 474,873
Computer Software [Member]    
Property, Plant and Equipment [Line Items]    
Property, Plant and Equipment, Gross 182,345 182,345
Leasehold Improvements [Member]    
Property, Plant and Equipment [Line Items]    
Property, Plant and Equipment, Gross 17,877 17,877
Cryptocurrency Mining Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Property, Plant and Equipment, Gross $ 9,410,000 $ 9,410,000
XML 50 R40.htm IDEA: XBRL DOCUMENT v3.22.2
Note Payable (Details) - USD ($)
$ in Millions
1 Months Ended 6 Months Ended
Nov. 24, 2021
Jun. 30, 2022
Note Payable (Details) [Line Items]    
Purchase price $ 20  
Equipment loan description   the Company received, as an initial draw on the MFA, $875,000 from VFS (the “Equipment Loan”). The Equipment Loan is secured by cryptocurrency mining computers being utilized by DMINT. The Equipment Loan requires monthly payments of $24,837.75 until the loan is repaid in full or it matures on November 29, 2024, requiring a full payment of all principal and accrued and unpaid interest.
At Closing [Member]    
Note Payable (Details) [Line Items]    
Purchase price 16  
Within Six Months After Closing [Member]    
Note Payable (Details) [Line Items]    
Purchase price 2  
Escrow Account [Member]    
Note Payable (Details) [Line Items]    
Purchase price $ 2  
XML 51 R41.htm IDEA: XBRL DOCUMENT v3.22.2
Stock Options (Details) - Schedule of outstanding stock options and changes - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2022
Dec. 31, 2021
Schedule of outstanding stock options and changes [Abstract]    
Options outstanding, beginning balance 893,988 285,173
Weighted Average Exercise Price, Options outstanding, beginning balance $ 0.0001 $ 0.0001
Aggregate Intrinsic Value, Options outstanding, beginning balance $ 2,369,065 $ 1,408,755
Options outstanding, Granted 774,585
Weighted Average Exercise Price, Granted $ 0.0001
Aggregate Intrinsic Value, Granted
Options outstanding, Shares exercisable 774,586  
Weighted Average Exercise Price, Shares exercisable $ 0.0001  
Aggregate Intrinsic Value, Shares exercisable $ 683,572  
Options outstanding, Exercised (159,103)
Weighted Average Exercise Price, Exercised
Aggregate Intrinsic Value, Exercised
Options outstanding, Expired (112,736) (6,667)
Weighted Average Exercise Price, Expired
Aggregate Intrinsic Value, Expired
Options outstanding, ending balance 781,252 893,988
Weighted Average Exercise Price, Options outstanding, ending balance $ 0.0001 $ 0.0001
Aggregate Intrinsic Value, Options outstanding, ending balance   $ 2,369,065
XML 52 R42.htm IDEA: XBRL DOCUMENT v3.22.2
Warrants (Details) - Schedule of outstanding stock warrants and changes - $ / shares
6 Months Ended 12 Months Ended
Jun. 30, 2022
Dec. 31, 2021
Schedule of outstanding stock warrants and changes [Abstract]    
Number of Warrants, outstanding beginning balance 9,963,127 3,353,698
Weighted Average Exercise Price, outstanding beginning balance $ 5.02 $ 4.61
Weighted Average Remaining Contract Term, outstanding beginning balance 4 years 6 months 18 days 4 years 9 months 21 days
Number of Warrants, Cancelled   (40,000)
Weighted Average Exercise Price, Cancelled   $ 7.5
Weighted Average Remaining Contract Term, Cancelled  
Number of Warrants, Underwriter Warrants   8,881,333
Weighted Average Exercise Price, Underwriter Warrants   $ 3.62
Weighted Average Remaining Contract Term, Underwriter Warrants  
Number of Warrants, Warrant A Exercised   (742,220)
Weighted Average Exercise Price, Warrant A Exercised   $ 9
Weighted Average Remaining Contract Term, Warrant A Exercised  
Number of Warrants, Warrant B Exercised   (313,320)
Weighted Average Exercise Price, Warrant B Exercised   $ 4.5
Weighted Average Remaining Contract Term, Warrant B Exercised  
Number of Warrants, Underwriter Warrant Exercised (1,400,000) (1,176,364)
Weighted Average Exercise Price, Underwriter Warrant Exercised $ 0.0001 $ 0.0001
Weighted Average Remaining Contract Term, Underwriter Warrant Exercised
Number of Warrants, outstanding ending balance 8,563,127 9,963,127
Weighted Average Exercise Price, outstanding ending balance $ 5.1 $ 5.02
Weighted Average Remaining Contract Term, outstanding ending balance 4 years 5 months 12 days 4 years 6 months 18 days
XML 53 R43.htm IDEA: XBRL DOCUMENT v3.22.2
Operating Leases (Details)
1 Months Ended 3 Months Ended 6 Months Ended
Jan. 11, 2022
USD ($)
ft²
Jun. 24, 2020
Jun. 30, 2022
USD ($)
Jun. 30, 2021
USD ($)
Jun. 30, 2022
USD ($)
Jun. 30, 2021
USD ($)
Operating Lease (Textual)            
Lease agreement, description   eVance, Inc. (“eVance”) entered into a Lease Agreement (the “Lease”) with Pergament Lodi, LLC (the “Lessor”) relating to approximately 4,277 square feet of property located at 960 Northpoint Parkway, Alpharetta, Georgia, Suite 400. The term of the Lease is for thirty-nine (39) months commencing September 1, 2020. The monthly base rent is $8,019 for the first twelve (12) months increasing thereafter to $8,768. The total rent for the entire lease term is $315,044 and $8,768 is payable as a security deposit.        
Lease term 5 years          
Monthly base rent $ 1,667          
Total rent for the entire lease term of the leases 25,000          
Security deposit $ 8,768          
Operating lease rent expense     $ 52,572 $ 24,908 $ 94,984 $ 49,817
Cell 3 [Member]            
Operating Lease (Textual)            
Square feet | ft² 4,000          
Cell 4 [Member]            
Operating Lease (Textual)            
Square feet | m² 6,000          
Monthly base rent $ 2,500          
DMINT [Member]            
Operating Lease (Textual)            
Square feet | ft² 10,000          
XML 54 R44.htm IDEA: XBRL DOCUMENT v3.22.2
Operating Leases (Details) - Schedule of balance sheet classification
Jun. 30, 2022
USD ($)
Asset  
Operating lease asset $ 336,864
Total lease asset 336,864
Liability  
Operating lease liability – current portion 135,603
Operating lease liability – noncurrent portion 198,623
Total lease liability $ 334,226
XML 55 R45.htm IDEA: XBRL DOCUMENT v3.22.2
Operating Leases (Details) - Schedule of lease obligations
Jun. 30, 2022
USD ($)
Schedule of lease obligations [Abstract]  
2022 (six months) $ 75,568
2023 144,393
2024 50,000
2025 50,000
2026 41,667
Total payments 361,628
Amount representing interest (20,955)
Lease obligation, net 340,673
Less current portion (142,050)
Lease obligation – long term $ 198,623
XML 56 R46.htm IDEA: XBRL DOCUMENT v3.22.2
Common Stock (Details)
1 Months Ended
Jan. 31, 2022
Common Stock [Abstract]  
Purchase agreement, description In January 2022, Armistice Capital, received 1,400,000 shares of common stock upon the exercise of 1,400,000 warrants at $0.0001.
XML 57 R47.htm IDEA: XBRL DOCUMENT v3.22.2
Preferred Stock (Details) - shares
6 Months Ended
Aug. 07, 2020
Jun. 30, 2022
Dec. 31, 2021
Preferred Stock (Details) [Line Items]      
Preferred Stock, Shares Issued  
Preferred Stock [Member]      
Preferred Stock (Details) [Line Items]      
Issuance of shares   50,000,000  
Series A Preferred Stock [Member]      
Preferred Stock (Details) [Line Items]      
Preferred Stock, Shares Issued   4,633 4,633
Certificate of designations, descriptions we filed a Certificate of Designations, Preferences and Rights of Series A Preferred Stock (the “Certificate of Designations”) with the Secretary of State of Delaware. The Certificate of Designations will provide that the Company may issue up to 10,000 shares of Series A Preferred Stock at a stated value (the “Stated Value”) of $1,000 per share. Holders of Series A Preferred Stock are entitled to the following rights and preferences    
Cash dividend percentage   12.00%  
Board of Directors Chairman [Member] | Preferred Stock [Member]      
Preferred Stock (Details) [Line Items]      
Preferred Stock, Shares Issued   4,633  
XML 58 R48.htm IDEA: XBRL DOCUMENT v3.22.2
Related Party Transactions (Details) - Crowd Ignition, Inc. [Member] - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2022
Oct. 01, 2021
Related Party Transactions (Details) [Line Items]    
Conversion of warrants, description On January 3, 2022, the Company entered into a share exchange agreement with all of the shareholders of Crowd Ignition, Inc. (“Crowd Ignition”) whereby the Company purchased 100% of the equity of Crowd Ignition in exchange for 1,318,408 shares of the common stock, par value $0.0001 of the Company (the “CI Issued Shares”).  
Aggregate purchase price   $ 5.3
Collectively owned equity percentage 100.00%  
XML 59 R49.htm IDEA: XBRL DOCUMENT v3.22.2
Commitments and Contingencies (Details)
6 Months Ended
Jan. 11, 2022
Jun. 30, 2022
Commitments and Contingencies (Details) [Line Items]    
Employment agreement, description On January 11, 2022, the Company entered into a new employment agreement with Mr. Yakov (the “Yakov Agreement”) and a new employment agreement with Mr. Smith (the “Smith Agreement”). The Yakov Agreement maintains Mr. Yakov’s role as the Company’s Chief Executive Officer through December 31, 2027 and extended for one-year terms thereafter. The Smith Agreement maintains Mr. Smith’s role as the Company’s Vice President, Finance unless terminated or upon his resignation.   
Mr. Yakov’s [Member]    
Commitments and Contingencies (Details) [Line Items]    
Salary split description   The Yakov Agreement increases Mr. Yakov’s base salary to $750,000 and he will continue to be eligible for insurance coverages and benefits available to the Company’s employees pursuant to the terms of such plans. Mr. Yakov also received a $490,000 bonus for acquisitions closed by the Company in 2020 and 2021 and he will be eligible to receive an acquisition bonus equal to two percent (2%) of the gross purchase price paid in connection with a future acquisition. Mr. Yakov shall be eligible to receive an annual bonus of Three Hundred Thousand Dollars ($300,000) based on performance criteria established by the Board. In addition, on an annual basis, Mr. Yakov shall receive options to purchase up to 200,000 shares of common stock of the Company at an exercise price of $0.001 per share. The Company’s existing option plan will need to be amended to increase the number of available shares before the options to Mr. Yakov can be granted. 
Mr. Smith’s [Member]    
Commitments and Contingencies (Details) [Line Items]    
Salary split description   The Smith Agreement increases Mr. Smith’s base salary to $350,000 and he will continue to be eligible for insurance coverages and benefits available to the Company’s employees pursuant to the terms of such plans. Mr. Smith shall be eligible to receive an annual bonus of One Hundred Fifty Thousand Dollars ($150,000) based on performance criteria established by the Committee. In addition, Mr. Smith shall receive options (the “Options”) to purchase up to 275,000 shares of common stock of the Company at an exercise price of $0.001 per share. The Options vest equally over five years at the rate of one-fifth (1/5th) beginning on the anniversary of the Effective Date of the Agreement. The Company’s existing option plan will need to be amended to increase the number of available shares before the options to Mr. Smith can be granted. 
XML 60 R50.htm IDEA: XBRL DOCUMENT v3.22.2
Segments (Details)
6 Months Ended 12 Months Ended
Jun. 30, 2022
Dec. 31, 2021
Segment Reporting [Abstract]    
Reportable segments 2 2
XML 61 R51.htm IDEA: XBRL DOCUMENT v3.22.2
Segments (Details) - Schedule of details revenue, operating expenses - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2022
Jun. 30, 2021
Jun. 30, 2022
Jun. 30, 2021
Reportable segment revenue:        
Revenue, net - cryptocurrency mining $ 207,966 $ 472,306
Fintech services revenue 8,164,469 2,833,572 16,686,588 5,059,976
Total segment and consolidated revenue $ 8,372,435 $ 2,833,572 $ 17,158,894 $ 5,059,976
XML 62 R52.htm IDEA: XBRL DOCUMENT v3.22.2
Segments (Details) - Schedule of total assets - USD ($)
Jun. 30, 2022
Dec. 31, 2021
Total Assets:    
Total assets $ 43,218,537 $ 43,529,491
Cryptocurrency Mining [Member]    
Total Assets:    
Total assets 9,081,126 9,749,652
Fintech Services [Member]    
Total Assets:    
Total assets $ 34,137,411 $ 33,779,839
XML 63 R53.htm IDEA: XBRL DOCUMENT v3.22.2
Subsequent Events (Details)
shares in Millions
Jul. 12, 2022
shares
Subsequent Event [Member]  
Subsequent Events (Details) [Line Items]  
Outstanding shares of common stock 1
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us-gaap:SubsequentEventMember 2022-07-12 shares iso4217:USD iso4217:USD shares utr:sqft utr:sqm pure 10-Q true 2022-06-30 2022 false 000-52994 OLB GROUP, INC. 13-4188568 200 Park Avenue Suite 1700 New York NY 10166 (212) 278-0900 Common Stock, $0.0001 par value OLB NASDAQ Yes Yes Non-accelerated Filer true true false false 14702804 3619974 3470339 839237 670822 303909 15064 1201656 729351 5964776 4885576 7527497 8967096 22069280 23964180 6858216 6858216 336864 402538 461904 451885 37253761 40643915 43218537 45529491 631001 501762 86231 416182 2000000 2000000 142050 133180 298053 3157335 3051124 408402 198623 273166 3764360 3324290 0.01 0.01 50000000 50000000 0.01 0.01 10000 10000 4633 4633 4633 4633 46 46 0.0001 0.0001 200000000 200000000 14702804 14702804 11984396 11984396 1469 1197 67953176 67810922 -28500514 -25606964 39454177 42205201 43218537 45529491 7813969 2666049 16227398 4756313 18174 46896 35342 65403 207966 472306 332326 120627 423848 238260 8372435 2833572 17158894 5059976 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202739 -34077 -395624 13342 -483320 -1279545 73500 -73500 875000 168545 7654845 7160956 706455 -493889 149635 -1773434 3470339 3824491 3619974 2051057 116736 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 1 – BACKGROUND</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Background</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The OLB Group, Inc. (“OLB” the “Company”) was incorporated in the State of Delaware on November 18, 2004 and provides services through its wholly-owned subsidiaries and business segments. The Company generates its revenue through two business segments its Fintech Services and Cryptocurrency Business segments.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fintech Services:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company provides integrated financial and transaction processing services (“Fintech Services”) to businesses throughout the United States. Through its eVance Capital, Inc. subsidiary (“eVance”), the Company provides an integrated suite of third-party merchant payment processing services and related proprietary software enabling products that deliver credit and debit card-based internet payment processing solutions primarily to small and mid-sized merchants operating in physical “brick and mortar” business environments, on the internet and in retail settings requiring both wired and wireless mobile payment solutions. eVance operates as an independent sales organization (“ISO”) generating individual merchant processing contracts in exchange for future residual payments. As a wholesale ISO, eVance has a direct contractual relationship with the merchants and takes greater responsibility in the approval and monitoring of merchants than do retail ISOs and as a result, receives additional consideration for this service and risk. The Company’s Securus365, Inc. (“Securus365”) subsidiary operates as a retail ISO and receives residual income as commission for merchants it places with third party processors.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CrowdPay.us, Inc. (“CrowdPay”) is a Crowdfunding platform used to facilitate a capital raise anywhere from $1,000,000 -$50,000,000 of various types of securities under Regulation D, Regulation Crowdfunding, Regulation A and the Securities Act of 1933. To date, the activities of this subsidiary have been nominal.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">OmniSoft.io, Inc. (“OmniSoft”) operates a software platform for small merchants. The Omnicommerce applications work on an iPad, mobile device and the web and allows customers to sell a store’s products in a physical, retail setting. To date, the activities of this subsidiary have been nominal when compared to the overall business.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company also provides ecommerce development and consulting services on a project-by-project basis.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cryptocurrency Business:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On July 23, 2021, the Company formed DMINT, Inc., a wholly owned subsidiary (“DMINT”). The purpose of DMINT is to operate its business related to cryptocurrency mining (“Cryptocurrency Business”).</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On July 28, 2021, the Company entered into an exclusive agreement with Cai Energy Blockchain, Inc. (“CAI”) whereby CAI provided the Company with an exclusive natural gas supply agreement (the “Services”). In exchange for the Services, the Company granted CAI options to purchase up to 767,918 shares of Common Stock, $0.0001 par value (with a fair value of approximately $4.5 million on the date of grant) at an exercise price of $0.0001 per share. The natural gas is being used in connection with theCryptocurrency Business.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 lending and transactional business leveraging the Company’s Cryptocurrency Business and Fintech Services business.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>COVID-19 Impact</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On January 30, 2020, the World Health Organization declared the COVID-19 (coronavirus) outbreak a “Public Health Emergency of International Concern” and on March 10, 2020, declared it to be a pandemic. The virus and actions taken to mitigate its spread have had and are expected to continue to have a broad adverse impact on the economies and financial markets of many countries, including the geographical areas in which the Company operates. In response to the pandemic, the Company has been working with merchants to address potential changes to the purchase patterns of consumers. In addition, it has been focusing on servicing merchants that sell products with an extended delivery time frame, that have products that are paid for in advance, and that work in the catering, ticketing, limo and travel related businesses which have been directly impacted by the social distancing requirement of the pandemic. Further, for those of the Company’s employees that are able to perform their job remotely, the Company implemented a “remote work” policy and provided employees with the technology necessary to continue to do their jobs from home and for those employees that are unable to perform their job from a remote location, the Company has taken steps to ensure appropriate distancing, continue to require wearing masks in the office and added sanitizing stations along with requiring frequent hand washing and work station cleaning. In addition, the Company has been encouraging its employees to get vaccinated, if possible. At June 30, 2022, all employees were no longer working remotely and had returned to the office. However, the Company continues to monitor and follow the advice of federal and state authorities. The Company has not seen a material impact on its business since states began to roll back restrictions on businesses in the United States.</span></p> 1000000 50000000 767918 0.0001 4500000 0.0001 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Basis of Presentation</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company as of and for the six month period ending June 30, 2022 and not necessarily indicative of the results to be expected for the full year ending December 31, 2022. These unaudited financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Use of Estimates</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">  </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s accounting estimates include the collectability of receivables, useful lives of long-lived assets and recoverability of those assets, impairment in fair value of goodwill, valuation allowances for income taxes, stock-based compensation.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Principles of Consolidation</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, eVance, Securus, CrowdPay, Omnisoft, OLBit, DMINT and Crowd Ignition, Inc. All significant intercompany transactions and balances have been eliminated.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Reclassifications</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain reclassifications have been made to the prior year financial information to conform to the presentation used in the financial statements for the three and six months ended June 30, 2022.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Concentration of Credit Risk</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash and accounts receivable. The Company’s cash is deposited with major financial institutions. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insurable amount (“FDIC”). As of June 30, 2022, the Company had $2,532,815 of cash in excess of the FDIC’s $250,000 insurance limit.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Operating Segments</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”), or decision maker group, in deciding how to allocate resources to an individual segment and in assessing performance. Our chief operating decision–making group is composed of the Chief Executive Officer and Vice President - Finance. The Company has two operating segments as of June 30, 2022. See Note 13, “Segment Information”.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Net Loss per Share</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Basic net loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and dilutive potentially outstanding shares of common stock during the period. The weighted average number of common shares for the six months ended June 30, 2022 and 2021 does not include warrants to acquire up to 8,563,127 and 2,368,978 shares of common stock, respectively, because of their anti-dilutive effect. The weighted average number of common shares for the six months ended June 30, 2022 and 2021 does not include up to 779,029 and 11,112 options, respectively, to purchase common stock because of their anti-dilutive effect.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Accounts Receivable</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts receivable represent contractual residual payments due from the Company’s processing partners or other customers. Residual payments are determined based on transaction fees and revenues from the credit and debit card processing activity of merchants for which the Company’s processing partners pay the Company. Based on collection experience and periodic reviews of outstanding receivables, management considers all accounts receivable for our residual payments to be fully collectible and accordingly, no allowance for doubtful accounts is required; however, CrowdPay has a recorded an allowance of approximately $0 and $38,000 as of June 30, 2022 and December 31, 2021, respectively.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Reserve for Chargeback Losses</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Disputes between a cardholder and a merchant periodically arise as a result of, among other things, cardholder dissatisfaction with merchandise quality or merchant services. Such disputes may not be resolved in the merchant’s favor. In these cases, the transaction is “charged back” to the merchant, which means the purchase price is refunded to the customer through the merchant’s bank and charged to the merchant. If the merchant has inadequate funds, the Company must bear the credit risk for the full amount of the transaction. The Company evaluates the risk for such transactions and estimates the potential loss for chargebacks based primarily on historical experience and records a loss reserve accordingly.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Revenue Recognition and Cost of Revenues</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company receives a percentage of recurring monthly transaction related fees comprised of credit and debit card fees charged to merchants, net of association fees, otherwise known as Interchange, as well as certain service charges and convenience fees, for payment processing services, including authorization, capture, clearing, settlement and information reporting of electronic transactions. Fees are calculated on either a percentage of the dollar volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of the transaction. In the case of “wholesale” residual revenue in which the Company has a direct contractual relationship with the merchant, bears risk of chargebacks and performs underwriting on the merchants, the Company records the full discount charged to the merchant as revenue and the related interchange and other processing fees as expenses. In cases of residual revenue where the Company is not responsible for merchant underwriting and has no chargeback liability and has no or limited contractual relationship with the merchant, the Company records the amount it receives from the processor net of interchange and other processing fees as revenue.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Disaggregation of Revenue</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The following table presents the Company’s revenue disaggregated by revenue source:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="white-space: nowrap; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the  Three Months Ended<br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Six  Months Ended<br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold">Revenue from contracts with customers:</td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left">Wholesale contracts</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">7,290,143</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,004,415</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">14,996,351</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">3,450,272</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Retail contracts</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">379,599</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">441,804</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">753,372</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">870,953</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Other transaction and processing fees</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">494,727</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">387,353</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">936,865</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">738,751</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Cryptocurrency mining fees</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">207,966</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-71">—</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">472,306</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">—</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Total fees</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">8,372,435</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,833,572</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">17,158,894</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">5,059,976</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). The Company determines revenue recognition through the following steps:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Identification of a contract with a customer;</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Identification of the performance obligations in the contract;</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Determination of the transaction price;</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Allocation of the transaction price to the performance obligations in the contract; and</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recognition of revenue when or as the performance obligations are satisfied.</span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Shipping and handling activities associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment activity and recognized as revenue at the point in time at which control of the goods transfers to the customer. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">  </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Transaction and processing fees</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fees for the Company’s transaction and processing arrangements are typically billed and paid on a monthly basis. The Company receives a percentage of recurring monthly transaction related fees comprised of credit and debit card fees charged to merchants, net of association fees, otherwise known as Interchange, as well as certain service charges and convenience fees, for payment processing services, including authorization, capture, clearing, settlement and information reporting of electronic transactions. Fees are calculated on either a percentage of the dollar, volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of the transaction. These merchant services represent a single performance obligation satisfied over time and that the same measure of progress should be used to measure the Company’s progress toward complete satisfaction of the performance obligation. The Company will recognize revenue on a monthly basis as the services are transferred to the customer in short daily increments that qualify for series guidance as the best measure of the transfer of control.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In wholesale contracts, the Company recognizes transaction and processing fees on a gross basis as the Company is the principal in the merchant services. The Company has concluded it is the principal because it has a direct contractual relationship with the merchant, is primarily responsible for the delivery of services to the merchants, including performing underwriting, has discretion in setting prices, and bears risk of chargebacks and other merchant losses. The Company also has the unilateral ability to accept or reject a transaction based on criteria established by the Company. As the principal, the Company records the full discount charged to the merchant as revenue and the related interchange and other processing fees within cost of revenues.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In retail contracts, the Company is not responsible for merchant underwriting, has no chargeback liability and has no or limited contractual relationship with the merchant. As such, the Company records the net amount it receives from the processor, after interchange and other interchange and other processing fees, as revenue.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Merchant equipment sales and other</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company generates revenue through the sale and rental of merchant equipment. The Company satisfies its performance obligation upon delivery of equipment to merchants and recognizes revenue at a point in time. The Company allows for customer returns which are accounted for as variable consideration. The Company estimates these amounts based on historical experience and reduces revenue recognized. The Company invoices customers upon delivery of the equipment to merchants, and payments from such customers are due upon invoicing. The Company offers hardware installment sales to customers with terms ranging from three to forty-eight months. The Company allocates a portion of the consideration received from these arrangements to a financing component when it determines that a significant financing component exists. The financing component is subsequently recognized as financing revenue separate from hardware revenue, within subscription and services-based revenue, over the terms of the arrangement with the customer. Pursuant to practical expedients afforded under ASC 606, the Company does not recognize a financing component for hardware installment sales that have a term of one year or less.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">  </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Cryptocurrency mining</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company has entered into digital asset mining pools by executing contracts, as amended from time to time, with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are immaterial and are recorded as a deduction from revenue), for successfully adding a block to the blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Providing computing power to solve complex cryptographic algorithms in support of the Bitcoin blockchain (in a process known as “solving a block”) is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. Each individual unit of cryptocurrency held by the Company is a separate unit of account. There is currently no specific definitive guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the Financial Accounting Standards Board (“FASB”), the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Basis of Presentation</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company as of and for the six month period ending June 30, 2022 and not necessarily indicative of the results to be expected for the full year ending December 31, 2022. These unaudited financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Use of Estimates</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">  </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s accounting estimates include the collectability of receivables, useful lives of long-lived assets and recoverability of those assets, impairment in fair value of goodwill, valuation allowances for income taxes, stock-based compensation.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Principles of Consolidation</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, eVance, Securus, CrowdPay, Omnisoft, OLBit, DMINT and Crowd Ignition, Inc. All significant intercompany transactions and balances have been eliminated.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Reclassifications</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain reclassifications have been made to the prior year financial information to conform to the presentation used in the financial statements for the three and six months ended June 30, 2022.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Concentration of Credit Risk</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash and accounts receivable. The Company’s cash is deposited with major financial institutions. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insurable amount (“FDIC”). As of June 30, 2022, the Company had $2,532,815 of cash in excess of the FDIC’s $250,000 insurance limit.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> 2532815 250000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Operating Segments</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”), or decision maker group, in deciding how to allocate resources to an individual segment and in assessing performance. Our chief operating decision–making group is composed of the Chief Executive Officer and Vice President - Finance. The Company has two operating segments as of June 30, 2022. See Note 13, “Segment Information”.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Net Loss per Share</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Basic net loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and dilutive potentially outstanding shares of common stock during the period. The weighted average number of common shares for the six months ended June 30, 2022 and 2021 does not include warrants to acquire up to 8,563,127 and 2,368,978 shares of common stock, respectively, because of their anti-dilutive effect. The weighted average number of common shares for the six months ended June 30, 2022 and 2021 does not include up to 779,029 and 11,112 options, respectively, to purchase common stock because of their anti-dilutive effect.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p> 8563127 2368978 779029 11112 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Accounts Receivable</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts receivable represent contractual residual payments due from the Company’s processing partners or other customers. Residual payments are determined based on transaction fees and revenues from the credit and debit card processing activity of merchants for which the Company’s processing partners pay the Company. Based on collection experience and periodic reviews of outstanding receivables, management considers all accounts receivable for our residual payments to be fully collectible and accordingly, no allowance for doubtful accounts is required; however, CrowdPay has a recorded an allowance of approximately $0 and $38,000 as of June 30, 2022 and December 31, 2021, respectively.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> 0 38000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Reserve for Chargeback Losses</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Disputes between a cardholder and a merchant periodically arise as a result of, among other things, cardholder dissatisfaction with merchandise quality or merchant services. Such disputes may not be resolved in the merchant’s favor. In these cases, the transaction is “charged back” to the merchant, which means the purchase price is refunded to the customer through the merchant’s bank and charged to the merchant. If the merchant has inadequate funds, the Company must bear the credit risk for the full amount of the transaction. The Company evaluates the risk for such transactions and estimates the potential loss for chargebacks based primarily on historical experience and records a loss reserve accordingly.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Revenue Recognition and Cost of Revenues</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company receives a percentage of recurring monthly transaction related fees comprised of credit and debit card fees charged to merchants, net of association fees, otherwise known as Interchange, as well as certain service charges and convenience fees, for payment processing services, including authorization, capture, clearing, settlement and information reporting of electronic transactions. Fees are calculated on either a percentage of the dollar volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of the transaction. In the case of “wholesale” residual revenue in which the Company has a direct contractual relationship with the merchant, bears risk of chargebacks and performs underwriting on the merchants, the Company records the full discount charged to the merchant as revenue and the related interchange and other processing fees as expenses. In cases of residual revenue where the Company is not responsible for merchant underwriting and has no chargeback liability and has no or limited contractual relationship with the merchant, the Company records the amount it receives from the processor net of interchange and other processing fees as revenue.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Disaggregation of Revenue</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The following table presents the Company’s revenue disaggregated by revenue source:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="white-space: nowrap; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the  Three Months Ended<br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Six  Months Ended<br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold">Revenue from contracts with customers:</td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left">Wholesale contracts</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">7,290,143</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,004,415</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">14,996,351</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">3,450,272</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Retail contracts</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">379,599</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">441,804</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">753,372</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">870,953</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Other transaction and processing fees</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">494,727</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">387,353</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">936,865</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">738,751</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Cryptocurrency mining fees</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">207,966</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-71">—</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">472,306</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">—</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Total fees</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">8,372,435</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,833,572</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">17,158,894</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">5,059,976</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). The Company determines revenue recognition through the following steps:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Identification of a contract with a customer;</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Identification of the performance obligations in the contract;</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Determination of the transaction price;</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Allocation of the transaction price to the performance obligations in the contract; and</span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recognition of revenue when or as the performance obligations are satisfied.</span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Shipping and handling activities associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment activity and recognized as revenue at the point in time at which control of the goods transfers to the customer. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">  </span></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="white-space: nowrap; border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the  Three Months Ended<br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Six  Months Ended<br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold">Revenue from contracts with customers:</td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left">Wholesale contracts</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">7,290,143</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,004,415</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">14,996,351</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">3,450,272</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Retail contracts</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">379,599</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">441,804</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">753,372</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">870,953</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Other transaction and processing fees</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">494,727</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">387,353</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">936,865</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">738,751</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Cryptocurrency mining fees</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">207,966</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-71">—</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">472,306</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">—</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Total fees</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">8,372,435</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,833,572</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">17,158,894</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">5,059,976</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> 7290143 2004415 14996351 3450272 379599 441804 753372 870953 494727 387353 936865 738751 207966 472306 8372435 2833572 17158894 5059976 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Transaction and processing fees</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fees for the Company’s transaction and processing arrangements are typically billed and paid on a monthly basis. The Company receives a percentage of recurring monthly transaction related fees comprised of credit and debit card fees charged to merchants, net of association fees, otherwise known as Interchange, as well as certain service charges and convenience fees, for payment processing services, including authorization, capture, clearing, settlement and information reporting of electronic transactions. Fees are calculated on either a percentage of the dollar, volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of the transaction. These merchant services represent a single performance obligation satisfied over time and that the same measure of progress should be used to measure the Company’s progress toward complete satisfaction of the performance obligation. The Company will recognize revenue on a monthly basis as the services are transferred to the customer in short daily increments that qualify for series guidance as the best measure of the transfer of control.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In wholesale contracts, the Company recognizes transaction and processing fees on a gross basis as the Company is the principal in the merchant services. The Company has concluded it is the principal because it has a direct contractual relationship with the merchant, is primarily responsible for the delivery of services to the merchants, including performing underwriting, has discretion in setting prices, and bears risk of chargebacks and other merchant losses. The Company also has the unilateral ability to accept or reject a transaction based on criteria established by the Company. As the principal, the Company records the full discount charged to the merchant as revenue and the related interchange and other processing fees within cost of revenues.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In retail contracts, the Company is not responsible for merchant underwriting, has no chargeback liability and has no or limited contractual relationship with the merchant. As such, the Company records the net amount it receives from the processor, after interchange and other interchange and other processing fees, as revenue.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Merchant equipment sales and other</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company generates revenue through the sale and rental of merchant equipment. The Company satisfies its performance obligation upon delivery of equipment to merchants and recognizes revenue at a point in time. The Company allows for customer returns which are accounted for as variable consideration. The Company estimates these amounts based on historical experience and reduces revenue recognized. The Company invoices customers upon delivery of the equipment to merchants, and payments from such customers are due upon invoicing. The Company offers hardware installment sales to customers with terms ranging from three to forty-eight months. The Company allocates a portion of the consideration received from these arrangements to a financing component when it determines that a significant financing component exists. The financing component is subsequently recognized as financing revenue separate from hardware revenue, within subscription and services-based revenue, over the terms of the arrangement with the customer. Pursuant to practical expedients afforded under ASC 606, the Company does not recognize a financing component for hardware installment sales that have a term of one year or less.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">  </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Cryptocurrency mining</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i> </i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company has entered into digital asset mining pools by executing contracts, as amended from time to time, with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are immaterial and are recorded as a deduction from revenue), for successfully adding a block to the blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Providing computing power to solve complex cryptographic algorithms in support of the Bitcoin blockchain (in a process known as “solving a block”) is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. Each individual unit of cryptocurrency held by the Company is a separate unit of account. There is currently no specific definitive guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the Financial Accounting Standards Board (“FASB”), the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 3 – LIQUIDITY AND CAPITAL RESOURCES</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At June 30, 2022, the Company had cash of approximately $3.6 million and working capital of approximately $2.8 million. As such, the Company believes it has sufficient liquidity to fund its future operations and capital requirements for a period of at least twelve months from the date these consolidated financial statements are issued.</span></p> 3600000 2800000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 4 – INTANGIBLE ASSETS</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Intangible assets, net, consist of the following as of:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Merchant Portfolios</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,405,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,405,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Less accumulated amortization</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,744,606</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,562,798</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Net residual portfolios</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">660,394</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">842,202</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Trade name</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,500,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,500,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Less accumulated amortization</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,750,000</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,500,000</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Net trade name</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">750,000</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,000,000</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">CBD Merchant Portfolio</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">18,000,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">18,000,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Less accumulated amortization</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,428,571</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(190,476</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Net CBD merchant portfolio</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">16,571,429</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">17,809,524</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">  </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Exclusive agreement to purchase natural gas</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">4,499,952</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">4,499,952</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Less accumulated amortization</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(412,496</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(187,498</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Net mineral rights</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">4,087,457</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">4,312,454</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Total intangible assets, net</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">22,069,280</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">23,964,180</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amortization expense for the three months ended June 30, 2022 and 2021 was $903,353 and $215,903, respectively.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amortization expense for the six months ended June 30, 2022 and 2021 was $1,901,943 and $431,807, respectively.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company’s merchant portfolios and tradename are being amortized over respective useful lives of 7 and 5 years.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company’s agreement to purchase natural gas is being amortized over the useful life of 10 years.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The following sets forth the estimated amortization expense related to amortizing intangible assets for the years ended December 31:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left">2022 (six months)</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,963,190</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2023</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,834,281</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2024</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,320,234</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2025</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,021,424</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2026</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,021,424</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Thereafter</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">6,908,727</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">22,069,280</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The weighted average remaining useful life of amortizing intangible assets was 5.70 years at June 30, 2022.</span></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Merchant Portfolios</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,405,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,405,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Less accumulated amortization</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,744,606</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,562,798</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Net residual portfolios</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">660,394</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">842,202</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Trade name</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,500,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,500,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Less accumulated amortization</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,750,000</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,500,000</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Net trade name</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">750,000</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,000,000</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">CBD Merchant Portfolio</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">18,000,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">18,000,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Less accumulated amortization</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,428,571</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(190,476</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Net CBD merchant portfolio</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">16,571,429</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">17,809,524</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">  </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,<br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Exclusive agreement to purchase natural gas</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">4,499,952</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">4,499,952</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Less accumulated amortization</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(412,496</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(187,498</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Net mineral rights</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">4,087,457</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">4,312,454</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Total intangible assets, net</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">22,069,280</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">23,964,180</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> 2405000 2405000 1744606 1562798 660394 842202 2500000 2500000 -1750000 -1500000 750000 1000000 18000000 18000000 1428571 190476 16571429 17809524 4499952 4499952 -412496 -187498 4087457 4312454 22069280 23964180 903353 215903 1901943 431807 P7Y P5Y P10Y <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left">2022 (six months)</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,963,190</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2023</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,834,281</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2024</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,320,234</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2025</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,021,424</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2026</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,021,424</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Thereafter</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">6,908,727</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">22,069,280</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> 1963190 3834281 3320234 3021424 3021424 6908727 22069280 P5Y8M12D <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 5 – PROPERTY AND EQUIPMENT</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Long lived assets, including property and equipment assets to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Impairment losses are recognized if expected future cash flows of the related assets are less than their carrying values. Measurement of an impairment loss is based on the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property and equipment are first recorded at cost. Depreciation and is computed using the straight-line method over the estimated useful lives of the various classes of assets.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Maintenance and repair expenses, as incurred, are charged to expense. Betterments and renewals are capitalized in plant and equipment accounts. Cost and accumulated depreciation applicable to items replaced or retired are eliminated from the related accounts with any gain or loss on the disposition included as income.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">  </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Assets stated at cost, less accumulated depreciation consisted of the following:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Furniture and Fixtures</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">36,471</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">36,471</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Office Equipment</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">641,747</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">474,873</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Computer Software</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">182,345</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">182,345</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Leasehold Improvements</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">17,877</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">17,877</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Cryptocurrency Mining Equipment</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">9,410,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">9,410,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Total</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">10,288,440</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">10,121,566</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Less accumulated depreciation</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(2,760,943</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,154,470</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 4pt">Property and Equipment, net</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,527,497</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">8,967,096</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Depreciation expense</span></i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Depreciation expense for the six months ended June 30, 2022 and 2021 was $1,601,292 and $7,042, respectively.</p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, <br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Furniture and Fixtures</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">36,471</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">36,471</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Office Equipment</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">641,747</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">474,873</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Computer Software</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">182,345</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">182,345</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Leasehold Improvements</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">17,877</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">17,877</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Cryptocurrency Mining Equipment</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">9,410,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">9,410,000</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Total</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">10,288,440</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">10,121,566</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Less accumulated depreciation</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(2,760,943</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,154,470</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 4pt">Property and Equipment, net</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,527,497</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">8,967,096</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> 36471 36471 641747 474873 182345 182345 17877 17877 9410000 9410000 10288440 10121566 2760943 1154470 7527497 8967096 1601292 7042 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 6 – NOTE PAYABLE</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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 in the Cannabidiol (or “CBD”) industry, along with other merchants utilizing financial transaction processing services (the “Purchased Assets”). The purchase price was $20 million, with $16 million paid at closing, $2 million payable within six months after closing, and a $2 million payment to be transferred to an escrow account, contingent upon an Attrition Adjustment, as described in the Agreement.  Company management has recognized a liability for the contingent payment amount. However, on July 18, 2022, the Company notified the Seller of certain breaches of contract relating to, among other things, representations made by Seller in the Agreement, for which it will seek a reduction or cancellation of the final payment and a potential reduction in the overall purchase price.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On November 29, 2021, the Company entered into a Master Equipment Finance Agreement (the “MFA”) with VFS LLC (“VFS”) which would allow the Company to finance the purchase of certain equipment. The collateral and interest rate are determined at the time the Company borrows the funds. During the six months ended June 30, 2022, the Company received, as an initial draw on the MFA, $875,000 from VFS (the “Equipment Loan”). The Equipment Loan is secured by cryptocurrency mining computers being utilized by DMINT. The Equipment Loan requires monthly payments of $24,837.75 until the loan is repaid in full or it matures on November 29, 2024, requiring a full payment of all principal and accrued and unpaid interest.</p> 20000000 16000000 2000000 2000000 the Company received, as an initial draw on the MFA, $875,000 from VFS (the “Equipment Loan”). The Equipment Loan is secured by cryptocurrency mining computers being utilized by DMINT. The Equipment Loan requires monthly payments of $24,837.75 until the loan is repaid in full or it matures on November 29, 2024, requiring a full payment of all principal and accrued and unpaid interest. <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 7 – STOCK OPTIONS</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A summary of the status of the Company’s outstanding stock options and changes during the six months ended June 30, 2022 is presented below:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; font-weight: bold">Stock Options</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Options</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted<br/> Average<br/> Exercise<br/> Price</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Aggregate<br/> Intrinsic<br/> Value</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%">Options outstanding December 31, 2020</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">285,173</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.0001</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,408,755</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td>Granted</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">774,585</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">0.0001</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-72">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Exercised</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(159,103</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-73">-</div></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-74">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">Expired</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(6,667</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-75">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-76">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Options outstanding December 31, 2021</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">893,988</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">0.0001</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">2,369,065</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td>Granted</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-77">-</div></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-78">-</div></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-79">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Exercised</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-80">-</div></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-81">-</div></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-82">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td>Expired</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(112,736</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-83">-</div></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-84">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Options outstanding June 30, 2022</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">781,252</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">0.0001</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">Shares exercisable at June 30, 2022</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">774,586</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">0.0001</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">683,572</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; font-weight: bold">Stock Options</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Options</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted<br/> Average<br/> Exercise<br/> Price</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Aggregate<br/> Intrinsic<br/> Value</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%">Options outstanding December 31, 2020</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">285,173</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.0001</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,408,755</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td>Granted</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">774,585</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">0.0001</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-72">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Exercised</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(159,103</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-73">-</div></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-74">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">Expired</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(6,667</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-75">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-76">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Options outstanding December 31, 2021</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">893,988</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">0.0001</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">2,369,065</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td>Granted</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-77">-</div></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-78">-</div></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-79">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Exercised</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-80">-</div></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-81">-</div></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-82">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td>Expired</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(112,736</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-83">-</div></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-84">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Options outstanding June 30, 2022</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">781,252</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">0.0001</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"> </td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">Shares exercisable at June 30, 2022</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">774,586</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">0.0001</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">683,572</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> </table> 285173 0.0001 1408755 774585 0.0001 159103 6667 893988 0.0001 2369065 112736 781252 0.0001 774586 0.0001 683572 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 8 – WARRANTS</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">        </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A summary of the status of the Company’s outstanding stock warrants and changes during the six months ended June 30, 2022 is presented below:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Number of<br/> Warrants</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted<br/> Average<br/> Exercise<br/> Price</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted<br/> Average<br/> Remaining<br/> Contract<br/> Term</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%">Outstanding, December 31, 2020</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">3,353,698</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">4.61</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">4.81</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td>Cancelled</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(40,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">7.50</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-85">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Underwriter Warrants</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">8,881,333</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">3.62</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-86">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Warrant A Exercised</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(742,220</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">9.00</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-87">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Warrant B Exercised</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(313,320</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">4.50</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-88">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Underwriter Warrant Exercised</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,176,364</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">0.0001</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-89">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Outstanding, December 31, 2021</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">9,963,127</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">5.02</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4.55</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Underwriter Warrant Exercised</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,400,000</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">0.0001</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-90">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Outstanding, June 30, 2022</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">8,563,127</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">5.10</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">4.45</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Number of<br/> Warrants</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted<br/> Average<br/> Exercise<br/> Price</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted<br/> Average<br/> Remaining<br/> Contract<br/> Term</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%">Outstanding, December 31, 2020</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">3,353,698</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">4.61</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">4.81</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td>Cancelled</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(40,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">7.50</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-85">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Underwriter Warrants</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">8,881,333</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">3.62</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-86">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Warrant A Exercised</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(742,220</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">9.00</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-87">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Warrant B Exercised</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(313,320</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">4.50</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-88">-</div></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Underwriter Warrant Exercised</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,176,364</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">0.0001</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-89">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Outstanding, December 31, 2021</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">9,963,127</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">5.02</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4.55</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Underwriter Warrant Exercised</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,400,000</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">0.0001</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-90">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Outstanding, June 30, 2022</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">8,563,127</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">5.10</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">4.45</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> </table> 3353698 4.61 P4Y9M21D 40000 7.5 8881333 3.62 -742220 9 -313320 4.5 -1176364 0.0001 9963127 5.02 P4Y6M18D -1400000 0.0001 8563127 5.1 P4Y5M12D <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 9 – OPERATING LEASES</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On June 24, 2020, eVance, Inc. (“eVance”) entered into a Lease Agreement (the “Lease”) with Pergament Lodi, LLC (the “Lessor”) relating to approximately 4,277 square feet of property located at 960 Northpoint Parkway, Alpharetta, Georgia, Suite 400. The term of the Lease is for thirty-nine (39) months commencing September 1, 2020. The monthly base rent is $8,019 for the first twelve (12) months increasing thereafter to $8,768. The total rent for the entire lease term is $315,044 and $8,768 is payable as a security deposit. The first three months of rent will be abated so long as eVance is not in default of any portion of the Lease.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On January 11, 2022, DMINT entered into two leases (the “Leases”) in Bradford, Pennsylvania relating to a combined 10,000 square feet of property located at the Bradford Regional Airport Authority multi-tenant building in Lafayette Township. The facility is in the process of being converted into a cryptocurrency mining data center powered on the local power grid in tandem with natural gas power. The location will be used for DMINT’s mining operation with capacity for up to 2,000 Antminer S19j PRO machines. The Leases are each for a term of five years, ending on the later of the date of occupancy and November 10, 2026. The monthly base rent for “Cell 3”, comprising 4,000 square feet, is $1,667 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 $<span style="-sec-ix-hidden: hidden-fact-91">250,00</span> and $8,768 is payable as a security deposit.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Balance Sheet Classification</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td><span style="text-decoration:underline">Asset</span></td><td style="padding-bottom: 1.5pt"> </td> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: right"> </td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 57%; text-align: left; padding-bottom: 1.5pt">Operating lease asset</td><td style="width: 1%; padding-bottom: 1.5pt"> </td> <td style="width: 30%; text-align: left; padding-bottom: 1.5pt">Right of use asset</td><td style="width: 1%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">336,864</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Total lease asset</td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">336,864</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td><td> </td> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-decoration: underline">Liability</td><td> </td> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Operating lease liability – current portion</td><td> </td> <td style="text-align: left">Current operating lease liability</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">135,603</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Operating lease liability – noncurrent portion</td><td style="padding-bottom: 1.5pt"> </td> <td style="text-align: left; padding-bottom: 1.5pt">Long-term operating lease liability</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">198,623</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Total lease liability</td><td style="padding-bottom: 4pt"> </td> <td style="padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">334,226</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Lease obligations at June 30, 2022 consisted of the following:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold">For the year ended December 31:</td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"> </td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left">2022 (six months)</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">75,568</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2023</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">144,393</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2024</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">50,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2025</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">50,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">2026</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">41,667</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Total payments</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">361,628</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Amount representing interest</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(20,955</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Lease obligation, net</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">340,673</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Less current portion</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(142,050</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 4pt">Lease obligation – long term</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">198,623</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Rent expense for the three months ended June 30, 2022 and 2021, was $52,572 and $24,908, respectively.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Rent expense for the six months ended June 30, 2022 and 2021, was $94,984 and $49,817, respectively.</span></p> eVance, Inc. (“eVance”) entered into a Lease Agreement (the “Lease”) with Pergament Lodi, LLC (the “Lessor”) relating to approximately 4,277 square feet of property located at 960 Northpoint Parkway, Alpharetta, Georgia, Suite 400. The term of the Lease is for thirty-nine (39) months commencing September 1, 2020. The monthly base rent is $8,019 for the first twelve (12) months increasing thereafter to $8,768. The total rent for the entire lease term is $315,044 and $8,768 is payable as a security deposit. 10000 P5Y 4000 1667 6000 2500 8768 <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Balance Sheet Classification</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td><span style="text-decoration:underline">Asset</span></td><td style="padding-bottom: 1.5pt"> </td> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: right"> </td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 57%; text-align: left; padding-bottom: 1.5pt">Operating lease asset</td><td style="width: 1%; padding-bottom: 1.5pt"> </td> <td style="width: 30%; text-align: left; padding-bottom: 1.5pt">Right of use asset</td><td style="width: 1%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">336,864</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Total lease asset</td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">336,864</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td><td> </td> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-decoration: underline">Liability</td><td> </td> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Operating lease liability – current portion</td><td> </td> <td style="text-align: left">Current operating lease liability</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">135,603</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Operating lease liability – noncurrent portion</td><td style="padding-bottom: 1.5pt"> </td> <td style="text-align: left; padding-bottom: 1.5pt">Long-term operating lease liability</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">198,623</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Total lease liability</td><td style="padding-bottom: 4pt"> </td> <td style="padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">334,226</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> 336864 336864 135603 198623 334226 <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold">For the year ended December 31:</td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"> </td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left">2022 (six months)</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">75,568</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2023</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">144,393</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2024</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">50,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2025</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">50,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">2026</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">41,667</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Total payments</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">361,628</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Amount representing interest</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(20,955</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Lease obligation, net</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">340,673</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Less current portion</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(142,050</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 4pt">Lease obligation – long term</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">198,623</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> 75568 144393 50000 50000 41667 361628 20955 340673 -142050 198623 52572 24908 94984 49817 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 10 - COMMON STOCK</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In January 2022, Armistice Capital, received 1,400,000 shares of common stock upon the exercise of 1,400,000 warrants at $0.0001.</span></p> In January 2022, Armistice Capital, received 1,400,000 shares of common stock upon the exercise of 1,400,000 warrants at $0.0001. <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 11 – PREFERRED STOCK</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our certificate of incorporation authorizes the issuance of 50,000,000 shares of blank check preferred stock with such designation, rights and preferences as may be determined from time to time by our board of directors. The Company currently has 4,633 shares of preferred stock issued and outstanding.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Series A Preferred Stock</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On August 7, 2020, we filed a Certificate of Designations, Preferences and Rights of Series A Preferred Stock (the “Certificate of Designations”) with the Secretary of State of Delaware. The Certificate of Designations will provide that the Company may issue up to 10,000 shares of Series A Preferred Stock at a stated value (the “Stated Value”) of $1,000 per share. Holders of Series A Preferred Stock are entitled to the following rights and preferences.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Dividends</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Series A Preferred Stockholders are entitled to receive cash dividends at a rate per share (as a percentage of the Stated Value per share) of 12% per annum. Dividends accrue quarterly. Dividends are to be paid to the holders from funds legally available for payment and as approved for payment by the Board of Directors of the Company.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Conversion</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Series A Preferred Stock holders may convert, at their option, on or after the date on which the Term Loan is repaid in full, each share of Series A Preferred Stock (along with accrued but unpaid dividends thereon) into such number of shares of common stock as determined by dividing the Stated Value by the conversion price. The conversion price for the Series A Preferred Stock will be equal to the offering price per Unit in this offering and will be subject to adjustment for splits and the like. The holders of Series A Preferred Stock will only be permitted to convert their shares of Series A Preferred Stock into shares of common stock at such time as the Term Loan has been repaid in full and there is no further outstanding obligations regarding such indebtedness.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Voting</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each holder of a share of Series A Preferred Stock will have the right to vote its shares of Series A Preferred Stock with the common stock on an as-converted basis, and with respect to such votes, such holder shall have full voting rights and powers equal to the voting rights and powers of the holders of common stock, and shall be entitled, to notice of any stockholders’ meeting in accordance with the Company’s bylaws, and shall be entitled to vote, together with holders of common stock, with respect to any question upon which holders of common stock have the right to vote. Fractional votes shall not be permitted, and such shares shall be rounded up.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Liquidation Preference</i></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each share of Series A Preferred Stock will have a liquidation preference equal to the Stated Value plus any accrued but unpaid dividends thereon. In the event of a liquidation, dissolution or winding up of the Company (which includes any merger, reorganization, sale of assets in which control of the Company is transferred or event which results in all or substantially all of the Company’s assets being transferred), the holders of Series A Preferred Stock shall be entitled to receive out of the assets of the Company, before any payment is made to the holders of the Company’s common stock and either in preference to or <i>pari pasu</i> with the holders of any other series of preferred stock that may be issued in the future, a per share amount equal to the liquidation preference.</span></p> 50000000 4633 we filed a Certificate of Designations, Preferences and Rights of Series A Preferred Stock (the “Certificate of Designations”) with the Secretary of State of Delaware. The Certificate of Designations will provide that the Company may issue up to 10,000 shares of Series A Preferred Stock at a stated value (the “Stated Value”) of $1,000 per share. Holders of Series A Preferred Stock are entitled to the following rights and preferences 0.12 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 12 – RELATED PARTY TRANSACTIONS</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On January 3, 2022, the Company entered into a share exchange agreement with all of the shareholders of Crowd Ignition, Inc. (“Crowd Ignition”) whereby the Company purchased 100% of the equity of Crowd Ignition in exchange for 1,318,408 shares of the common stock, par value $0.0001 of the Company (the “CI Issued Shares”). The value of the CI Issued Shares was, for purposes of the Agreement, based on the closing trading price of the Company on October 1, 2021 (the date on which a third-party fairness opinion was issued), resulting in an aggregate purchase price for Crowd Ignition of $5.3 million. The purchase price was used solely to establish the agreed upon purchase price between the parties and not for accounting purposes.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Crowd Ignition is a web-based crowdfunding software system. Ronny Yakov, Chairman and CEO of the Company and John Herzog, a significant shareholder of the Company, collectively owned 100% of the equity of Crowd Ignition. The acquisition of Crowd Ignition., was determined to be a common control transaction as each Company has the same two shareholders with a majority ownership. As a result, the assets and liabilities assumed were recorded on the Company’s condensed consolidated financial statements at their respective carry-over basis; however, as of January 3, 2022, Crowd Ignition has no assets, liabilities or other operations.</span></p> On January 3, 2022, the Company entered into a share exchange agreement with all of the shareholders of Crowd Ignition, Inc. (“Crowd Ignition”) whereby the Company purchased 100% of the equity of Crowd Ignition in exchange for 1,318,408 shares of the common stock, par value $0.0001 of the Company (the “CI Issued Shares”). 5300000 1 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 13 – COMMITMENTS AND CONTINGENCIES</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On January 11, 2022, the Company entered into a new employment agreement with Mr. Yakov (the “Yakov Agreement”) and a new employment agreement with Mr. Smith (the “Smith Agreement”). The Yakov Agreement maintains Mr. Yakov’s role as the Company’s Chief Executive Officer through December 31, 2027 and extended for one-year terms thereafter. The Smith Agreement maintains Mr. Smith’s role as the Company’s Vice President, Finance unless terminated or upon his resignation.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Yakov Agreement increases Mr. Yakov’s base salary to $750,000 and he will continue to be eligible for insurance coverages and benefits available to the Company’s employees pursuant to the terms of such plans. Mr. Yakov also received a $490,000 bonus for acquisitions closed by the Company in 2020 and 2021 and he will be eligible to receive an acquisition bonus equal to two percent (2%) of the gross purchase price paid in connection with a future acquisition. Mr. Yakov shall be eligible to receive an annual bonus of Three Hundred Thousand Dollars ($300,000) based on performance criteria established by the Board. In addition, on an annual basis, Mr. Yakov shall receive options to purchase up to 200,000 shares of common stock of the Company at an exercise price of $0.001 per share. The Company’s existing option plan will need to be amended to increase the number of available shares before the options to Mr. Yakov can be granted.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Yakov Agreement also states that, if Mr. Yakov’s employment is terminated without cause or he voluntarily terminates his employment for good reason, he will continue to receive his base salary for the remainder of the term along with all earned bonuses. In the event the termination is in connection with Mr. Yakov’s death, disability or bankruptcy of the Company, he will receive the pro rata amount of his base salary through the termination date and all bonuses earned through the termination date.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Smith Agreement increases Mr. Smith’s base salary to $350,000 and he will continue to be eligible for insurance coverages and benefits available to the Company’s employees pursuant to the terms of such plans. Mr. Smith shall be eligible to receive an annual bonus of One Hundred Fifty Thousand Dollars ($150,000) based on performance criteria established by the Committee. In addition, Mr. Smith shall receive options (the “Options”) to purchase up to 275,000 shares of common stock of the Company at an exercise price of $0.001 per share. The Options vest equally over five years at the rate of one-fifth (1/5<sup>th</sup>) beginning on the anniversary of the Effective Date of the Agreement. The Company’s existing option plan will need to be amended to increase the number of available shares before the options to Mr. Smith can be granted.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Smith Agreement also states that, if Mr. Smith’s employment is terminated without cause or he voluntarily terminates his employment for good reason, he will continue to receive his base salary for the remainder of the term along with all earned bonuses. In the event the termination is in connection with Mr. Smith’s death, disability or bankruptcy of the Company, he will receive the pro rata amount of his base salary through the termination date and all bonuses earned through the termination date.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company had an adverse litigation judgment against it during the fiscal year relating to, among other things, a breach of contract claim, which included damages and attorney fees in favor of the Plaintiff. The Company appealed the judgment of both the award of damages and attorney fees and it prevailed in July 2022 when the case was remanded for retrial. As a result, the accrued expense related to the damage award has been eliminated.</p> On January 11, 2022, the Company entered into a new employment agreement with Mr. Yakov (the “Yakov Agreement”) and a new employment agreement with Mr. Smith (the “Smith Agreement”). The Yakov Agreement maintains Mr. Yakov’s role as the Company’s Chief Executive Officer through December 31, 2027 and extended for one-year terms thereafter. The Smith Agreement maintains Mr. Smith’s role as the Company’s Vice President, Finance unless terminated or upon his resignation.  The Yakov Agreement increases Mr. Yakov’s base salary to $750,000 and he will continue to be eligible for insurance coverages and benefits available to the Company’s employees pursuant to the terms of such plans. Mr. Yakov also received a $490,000 bonus for acquisitions closed by the Company in 2020 and 2021 and he will be eligible to receive an acquisition bonus equal to two percent (2%) of the gross purchase price paid in connection with a future acquisition. Mr. Yakov shall be eligible to receive an annual bonus of Three Hundred Thousand Dollars ($300,000) based on performance criteria established by the Board. In addition, on an annual basis, Mr. Yakov shall receive options to purchase up to 200,000 shares of common stock of the Company at an exercise price of $0.001 per share. The Company’s existing option plan will need to be amended to increase the number of available shares before the options to Mr. Yakov can be granted.  The Smith Agreement increases Mr. Smith’s base salary to $350,000 and he will continue to be eligible for insurance coverages and benefits available to the Company’s employees pursuant to the terms of such plans. Mr. Smith shall be eligible to receive an annual bonus of One Hundred Fifty Thousand Dollars ($150,000) based on performance criteria established by the Committee. In addition, Mr. Smith shall receive options (the “Options”) to purchase up to 275,000 shares of common stock of the Company at an exercise price of $0.001 per share. The Options vest equally over five years at the rate of one-fifth (1/5th) beginning on the anniversary of the Effective Date of the Agreement. The Company’s existing option plan will need to be amended to increase the number of available shares before the options to Mr. Smith can be granted.  <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 14 - SEGMENTS</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company applies ASC 280, <i>Segment Reporting</i>, in determining its reportable segments. The Company has two reportable segments during 2021: Cryptocurrency Mining and Fintech Services. The guidance requires that segment disclosures present the measure(s) used by the Chief Operating Decision Maker (“CODM”) to decide how to allocate resources and for purposes of assessing such segments’ performance. The Company’s CODM is comprised of several members of its executive management team who use revenue and expenses of our two reporting segments to assess the performance of the business of our reportable operating segments.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The following tables details revenue, operating expenses, and assets for the Company’s reportable segments for the three months ended June 30, 2022.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For  the Three Months ended<br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Six  Months ended<br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td>Reportable segment revenue:</td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left; padding-left: 9pt">Revenue, net - cryptocurrency mining</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">207,966</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-92">—</div></td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">472,306</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-93">—</div></td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Fintech services revenue</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">8,164,469</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">2,833,572</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">16,686,588</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">5,059,976</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Total segment and consolidated revenue</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">8,372,435</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">2,833,572</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">17,158,894</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">5,059,976</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: center"> </td><td style="white-space: nowrap; padding-bottom: 1.5pt"> </td> <td colspan="2" style="white-space: nowrap; text-align: center; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>June 30, </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>2022</b></p></td><td style="white-space: nowrap; padding-bottom: 1.5pt"> </td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31, <br/> 2021</td><td style="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold">Total Assets:</td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left; padding-left: 9pt">Cryptocurrency mining</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">9,081,126</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">9,749,652</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Fintech services</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">34,137,411</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">33,779,839</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">43,218,537</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">43,529,491</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table> 2 2 <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For  the Three Months ended<br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Six  Months ended<br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td>Reportable segment revenue:</td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left; padding-left: 9pt">Revenue, net - cryptocurrency mining</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">207,966</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-92">—</div></td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">472,306</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-93">—</div></td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Fintech services revenue</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">8,164,469</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">2,833,572</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">16,686,588</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">5,059,976</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Total segment and consolidated revenue</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">8,372,435</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">2,833,572</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">17,158,894</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">5,059,976</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> 207966 472306 8164469 2833572 16686588 5059976 8372435 2833572 17158894 5059976 <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: center"> </td><td style="white-space: nowrap; padding-bottom: 1.5pt"> </td> <td colspan="2" style="white-space: nowrap; text-align: center; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>June 30, </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>2022</b></p></td><td style="white-space: nowrap; padding-bottom: 1.5pt"> </td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31, <br/> 2021</td><td style="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold">Total Assets:</td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left; padding-left: 9pt">Cryptocurrency mining</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">9,081,126</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">9,749,652</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Fintech services</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">34,137,411</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">33,779,839</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">43,218,537</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">43,529,491</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table> 9081126 9749652 34137411 33779839 43218537 43529491 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 15 – SUBSEQUENT EVENTS</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On July 12, 2022, the Board of the Company authorized a share repurchase program, pursuant to which the Company may repurchase up to 1 million shares of its outstanding shares of common stock. The Board authorized the Company to purchase its common stock from time to time on a discretionary basis through open market purchases, privately negotiated transactions or other means, including trading plans intended to qualify under Rule 10b5-1 of the Exchange Act, in accordance with applicable federal securities laws and other applicable legal requirements. The Company expects to fund these repurchases through existing cash balances. Decisions regarding the amount and the timing of purchases under the program will be influenced by the Company’s cash on hand, cash flows from operations, general market conditions and other factors. The Company is not obligated to acquire any particular amount of its common stock. This program has no set termination date and may be suspended or discontinued by the Board at any time. </span></p> 1000000 DE -0.08 -0.09 -0.18 -0.25 14607209 14702804 6905822 7117070 25000 false --12-31 Q2 0001314196 EXCEL 65 Financial_Report.xlsx IDEA: XBRL DOCUMENT begin 644 Financial_Report.xlsx M4$L#!!0 ( />)#%4'04UB@0 +$ 0 9&]C4')O<',O87!P+GAM M;$V./0L",1!$_\IQO;=!P4)B0-!2L+(/>QLOD&1#LD)^OCG!CVX>;QA&WPIG M*N*I#BV&5(_C(I(/ !47BK9.7:=N')=HI6-Y #OGDK7A.YNJQ<&4GPZ4A!0W_J=0U[R;UEA_6\#MI7E!+ P04 M " #WB0Q5GPAO/^X K @ $0 &1O8U!R;W!S+V-O&ULS9+! M:L,P#(9?9?B>*';H&";-I:.G#@8K;.QF;+4UBQUC:R1]^R5>FS*V!]C1TN]/ MGT"-#E+W$9]C'S"2Q70WNLXGJ<.:G8B"!$CZA$ZE,1@M(? 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