Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operation

The following discussion and analysis of our consolidated financial condition and results of operations for years ended December 31, 2025 and 2024 should be read in conjunction with the consolidated financial statements and notes related thereto included elsewhere in this Annual Report on Form 10-K.

Overview

We are primarily a FinTech company that focuses on a suite of products in the merchant services marketplace that seeks to provide integrated business solutions to merchants throughout the United States. We seek to accomplish this by providing merchants with a wide range of products and services through our various online platforms, including financial and transaction processing services. We also have products that provide support for crowdfunding and other capital raising initiatives. We supplement our online platforms with certain hardware solutions that are integrated with our online platforms.

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.

We have integrated all the applications for OmniSoft and the ShopFast Omnicommerce solution with the eVance mobile payment gateway, SecurePay.com^™. SecurePay.com^™, 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 14, 2021, the Company formed its wholly owned subsidiary, OLBit. The purpose of OLBit is to hold the Company's assets and operate its business related to its emerging money transmission and transactional business.

On July 23, 2021, we formed our wholly owned subsidiary, DMINT, to operate in the Bitcoin mining industry, specifically the mining of Bitcoin. DMINT initiated the first phase of its Bitcoin mining operation by placing data centers and ASIC-based Antminer S19J Pro mining computers specifically configured to mine Bitcoin in Pennsylvania. As of December 31, 2025, DMINT has 1,000 computers and had 400 computers online and mining for Bitcoin. In February 2023, it re-deployed all of the computers to its Selmer, Tennessee location. At December 31, 2025, DMINT had mined 60.01 Bitcoin. The Company is currently in the process of spinning off DMINT into a stand-alone entity.

As stated above, we are currently in the process of spinning off DMINT into a stand-alone entity. Our planned DMINT spin-off distribution (the "Spin-Off Distribution") will occur upon DMINT's Form S-1 Registration Statement filing being declared effective by the Securities and Exchange Commission, and the approval by the Nasdaq Capital Market ("NASDAQ") of the listing of DMINT's common shares on the NASDAQ. Following the consummation of the Spin-Off Distribution, of which there is no guarantee, (i) DMINT will no longer be a wholly owned subsidiary of the Company and will be a stand-alone entity, (ii) all of DMINT's outstanding shares of common stock will be owned by the existing stockholders of the Company, and (iii) DMINT Real Estate Holdings, Inc. ("DREH") will remain a wholly owned subsidiary of DMINT.

On June 15, 2023, the Company entered into a Membership Interest Purchase Agreement with SDI Black 001, LLC ("Seller") whereby the Company acquired from Seller 80.01% of the membership interests of Moola Cloud, LLC, a Florida limited liability company (f/k/a Cuentas SDI, LLC) (the "LLC"). The LLC enables the Company to focus on marketing to the underbanked communities utilizing the LLC's debit and calling card platform's ability for users to reload cash to their account and provide instant access to digital products to their customers' Mobile App and digital wallet into its electronic portal. The Company markets to the LLC's merchant network, which currently has approximately 31,600 locations in the United States, the ability of having one POS system that allows the retail customer to purchase products using OLB's payment processing solutions along with the ability to reload payment cards and their mobile phone minutes. On May 20, 2024, the Company entered into a second Membership Interest Purchase Agreement with the minority member of the LLC (the "Agreement") whereby it acquired the remaining 19.99% of the membership interests of the LLC for a purchase price of $215,500. As a result, effective May 20, 2024, the Company owns 100% of the LLC. On August 14, 2024, the LLC changed its name to Moola Cloud, LLC. The Agreement contains a restrictive covenant whereby for a period of three (3) years from the closing, none of Seller, including its any of its principals, executives, officers, directors, managers, employees, salespersons, or entities in which such principal has any interest, will directly or indirectly (i) induce, attempt to induce, interfere with, disrupt or attempt to disrupt any past, present or prospective business relationship, solicit, market to, endeavor to obtain as a customer, or contract with any merchant in order to provide services to such Merchant in competition with the Company; or (ii) solicit or interfere with, disrupt or attempt to disrupt any past, present or prospective business relationship, contractual or otherwise any person or entity that is a party to any contract assigned to the Company to terminate its contractual or business relationship with the Company.

Results of Operations

Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024

For the year ended December 31, 2025, we had total revenue of $8,676,907 compared to $12,838,988 of revenue for the year ended December 31, 2024, a decrease of $4,162,081 or 32.4%. We earned $7,936,768 in transaction and processing fees, $28,720 in merchant equipment sales, $210,256 of revenue from the Bitcoin Mining segment, $302,241 in revenue from monthly recurring subscriptions and $198,922 of digital product revenue; compared to $9,684,152 in transaction and processing fees, $75,575 in merchant equipment sales, $413,332 of revenue from the Bitcoin Mining segment, $521,268 in revenue from monthly recurring subscriptions and $2,144,661 of digital product revenue. We had a decrease of revenue for our transaction and processing fees of $1,747,384, a decrease in merchant equipment sales of $46,855, a decrease of $203,076 of bitcoin mining revenue, a decrease of $219,027 from the monthly recurring subscriptions, and a decrease of $1,945,739 of digital product revenue. We had a decrease in revenue primarily due to a decrease in revenue related to Moola Cloud, LLC, as the Company transitions to new vendors to obtain better pricing and is working to acquire new vendors to replace others that have gone out of business. The majority of the transitions have been completed, and vendors will be in use by Q1 2026.

For the year ended December 31, 2025, we had processing and servicing costs of $7,528,415 compared to $10,669,238 of processing and servicing costs for the year ended December 31, 2024, a decrease of $3,140,823 or 29.4%. Processing and servicing costs decreased in conjunction with the decreased revenue and merchant attrition.

Amortization expense for the year ended December 31, 2025 was $0 compared to $533,805 for the year ended December 31, 2024. We recorded amortization expense on our merchant portfolio, trademarks and natural gas purchase rights in 2024 and none in 2025. The decrease in the current period is due to most of the assets being fully amortized in 2024.

Depreciation expense for our Bitcoin Mining Segment was $507,393 for the year ended December 31, 2025 compared to $2,616,137 for the year ended December 31, 2024, a decrease of $2,108,744 or 80.6%. The decrease in the current period is due to assets being impaired in 2024.

Salary and wage expense for the year ended December 31, 2025 was $2,993,692 compared to $2,932,948 for the year ended December 31, 2024, an increase of only $60,744 or 2.1%.

Professional fees for the year ended December 31, 2025 were $935,076 compared to $1,939,542 for the year ended December 31, 2024, a decrease of $1,004,466 or 51.8%. Professional fees consist mainly of audit and legal fees. The decrease in the current period is due to a decrease in legal fees as the Company's legal related activity for ongoing litigation was much less in the current year.

General and Administrative ("G&A") expense for the year ended December 31, 2025, was $1,877,693 compared to $2,861,300 for the year ended December 31, 2024, a decrease of $983,607 or 34.4%. The decrease was mainly due to an approximately $324,000 decrease in bank fees. During the current year the Company closed its risk portfolio account which resulting in a large decrease to the bank fees. We had a decrease of $116,000 for outside services due to fewer service providers used for Dmint. We had a $112,000 decrease in compliance related fees. In the prior year we incurred fees for money transition licenses for OLBit. We did not have these expenses in 2025. We had a $64,000 decrease in rent expense as a result of the new lease in 2025 and we had a decrease of $230,000 in insurance expense due to the renewal of policies in the 2025.

For the year ended December 31, 2024, we had total impairment expense of $2,962,469 related to DMINT's exclusive agreement to purchase natural gas.

For the year ended December 31, 2025, we incurred interest expense for related parties of $395,926 and other expense of $85,000. We also recognized a loss on the extinguishment of accounts payable of $52,000 and a loss on conversion of accrued salaries and loans payable to related party of $175,763. For the year ended December 31, 2024, we recognized a realized gain from the sale of bitcoin of $222,751 and an realized gain on investment of $274,731. We also had interest expense of $45,942.

Our net loss for year ended December 31, 2025, was $5,874,051 compared to $11,224,911 for year ended December 31, 2024. We had a decrease in our net loss of $5,350,860 for the reasons discussed above.

In addition, we recognized a $775,000 deemed dividend for preferred stock and a $30,630 for preferred dividends for a net loss applicable to common shareholders of $6,679,681.

Liquidity and Capital Resources

Changes in Cash Flows

Operating Activities

For the year ended December 31, 2025, we used $1,330,383 of cash in operating activities, which included our net loss offset by $507,392 for depreciation expense, $800,040 for stock-based compensation, loss on conversion related party debt of $175,763, Loss on settlement of accounts payable and debt of $52,000, other expense of $25,250 and net changes in operating assets and liabilities of $2,983,365.

For the year ended December 31, 2024, we used $2,600,036 of cash in operating activities, which included our net loss offset by $3,149,942 for amortization and depreciation expense, $406,500 for stock-based compensation, impairment expense of $2,962,469, a realized gain of $222,751 from the sale of bitcoin and a realized gain on investment of $274,731 and net changes in operating assets and liabilities of $2,598,309.

Investing Activities

For the year ended December 31, 2025, we had no investing activities.

For the year ended December 31, 2024, we received $332,893 of cash used for investing activities. We received $548,393 from the sale of investment and used $215,500 to purchase the remaining 19.99% interest in the LLC.

Financing Activities

For the year ended December 31, 2025, we received net cash of $1,318,724 from financing activities as a result of receiving $560,832 from our CEO and $887,786 from the sale of common stock, and a decrease in our cash overdraft of $4,731. We made repayments on our note payable of $38,838 and to our CEO of $86,325.

For the year ended December 31, 2024, we received net cash of $2,115,843 from financing activities as a result of receiving $1,191,282 from our CEO, $1,090,890 from the sale of common stock, $6,840 in proceeds from exercise of options by related parties, and an increase in our cash overdraft of $31,750. We made repayments on our note payable of $204,919.

Liquidity and Capital Resources

At December 31, 2025, the Company had cash of $15,777 and negative working capital of $6,640,236.

On February 16, 2024, the Company entered into an Equity Distribution Agreement (the "Agreement") with Maxim Group LLC ("Maxim") to create an at-the-market equity program. Under the Agreement, the Company may offer and sell its common stock, par value $0.0001 per share, from time to time having an aggregate offering amount of up to $15,000,000 (the "Shares") during the term of the Agreement through Maxim, as sales agent (the "ATM Offering"). The Company has agreed to pay Maxim a commission equal to 3.0% of the gross sales price from the sales of Shares pursuant to the Agreement. In addition, the Company agreed to reimburse Maxim for its costs and out-of-pocket expenses incurred in connection with its services, including the fees and out-of-pocket expenses of its legal counsel. As of December 31, 2025, the ATM Offering has resulted in net proceeds of $1,978,676.

During the twelve months ended December 31, 2025, Mr. Yakov made payments on behalf of the Company in the amount of $560,832. As of December 31, 2025, the Company owes Mr. Yakov $167,315.

On August 12, 2024, the Company entered into an agreement with Yakov Holdings LLC, an entity controlled by Mr. Yakov (the "Yakov LLC") whereby the Yakov LLC committed to loan to the Company up to Five Million Dollars ($5,000,000) (the "Yakov LLC Loan"). The Yakov LLC Loan is revolving in nature, allowing the Company to borrow, repay, and re-borrow amounts under the terms and conditions set forth herein, provided that the total outstanding amount shall not exceed Five Million Dollars ($5,000,000). The interest rate of the Yakov LLC Loan is twelve percent (12%) and it matures on March 31, 2026. In addition, the Yakov LLC Loan is secured by a first priority security interest for the benefit of the Yakov LLC over all of the assets of the Company.

During the six months ended June 30, 2025, all amounts owed to Mr. Yakov at that time were converted into shares of common stock.

The Company has reviewed its cash flow activity during 2025 and projected cash flow forecast for 2026 and performed an overall analysis of market trends to determine whether or not it has sufficient liquidity to continue as a going concern for a period of at least twelve months from the date of this Annual Report. Based on projected cash to be used in operations to be offset by expected proceeds from capital raises, the ATM program and loan proceeds from Ronny Yakov under the loan agreement, the Company believes it has sufficient liquidity in order to sustain operations for at least the twelve months following the filing of this Annual Report. During the first quarter of 2026, the Company raised capital through a direct offering and a PIPE. The total cash to the Company from these transactions totaled over $3.7M. The Company believes this is sufficient to cover operations for the next 12 months. However, management recognizes that it may be required to obtain additional resources to successfully execute its business plans. No assurances can be given that management will be successful in raising additional capital, if needed, or on acceptable terms. Management believes that the Company's existing cash resources, together with expected capital raises, potential advances under the ATM program, related party financing, and other available funding sources, will be sufficient to support operations through March 31, 2027.

Significant Accounting Policies

Refer to Note 2 of our consolidated financial statements contained elsewhere in this Annual Report on Form 10-K for a summary of our significant accounting policies and recently adopting and issued accounting standards.