OLB Group Chairman and CEO Issues Open Letter to Shareholders
OLB Group's CEO Ronny Yakov has issued an open letter to shareholders, reflecting on the challenges of 2023 and outlining ambitious plans for 2024. The company recently acquired full control of Cuentas SDI, , including Black011.com, and is expanding its services to bodegas and convenience stores. New product launches are anticipated by the end of Q3 2024, with further services expected in early 2025. The core business remains merchant payment services, with enhancements to the Black011.com portal. OLB is also expanding its sports ticketing systems and launching new platforms like ShopFast™ and OLBPay™. The DMint Bitcoin mining spinoff is progressing, with financial implications to be reported. Despite revenue losses from a terminated merchant services portfolio, the company projects a $15 million revenue run rate for 2024. OLB is involved in ongoing litigation to recover $16 million from FFS Data and Clear Fork Bank. The CEO expressed optimism about the company's future post-spinoff.
- Full acquisition of Cuentas SDI, and expansion of Black011.com services.
- New products and services for bodegas and convenience stores launching by Q3 2024.
- Projected $15 million revenue run rate for fiscal 2024.
- Expansion of sports ticketing systems to minor league baseball teams.
- Launch of new platforms like ShopFast™ and OLBPay™ with advanced fraud prevention technologies.
- DMint spinoff progressing, with financial benefits to be reported.
- No long-term liabilities reported.
- Revenue loss from termination of merchant services of acquired portfolio.
- Ongoing litigation against FFS Data and Clear Fork Bank to recover $16 million.
- Write-off of the FFS Portfolio due to fraud claims and resulting in potential financial strain.
- Delays in finalizing the DMint spinoff due to SEC's comments.
Insights
OLB Group's revenue projection of at least
The spinoff of DMint, their Bitcoin mining subsidiary, will be seen as a positive move by investors as it allows OLB Group to focus solely on their fintech and eCommerce operations. The elimination of DMint's liabilities from the balance sheet should also improve financial metrics and may result in more favorable analyst coverage.
However, the ongoing litigation with FFS Data and Clear Fork Bank poses a significant risk. The outcome of this litigation and any potential financial recovery from it will be critical to OLB Group's future financial health. The conservative approach in writing off the FFS Portfolio is a prudent step, but the uncertainty surrounding the litigation outcome remains a point of concern for investors.
Short-term, the stock may see some volatility due to these legal uncertainties. Long-term, successful execution of their strategic initiatives, particularly in expanding their fintech solutions and stabilizing revenue streams, will be crucial.
The acquisition of Black011.com and its integration into OLB Group's existing infrastructure is a strategic move that targets the underbanked and unbanked populations, a segment with substantial growth potential. The planned introduction of pre-paid phone cards, credit cards and the Affordable Connectivity Program (ACP) could significantly enhance their market penetration and customer base.
Furthermore, expanding the ShopFast™ and SecurePay™ platforms with advanced fraud prevention and AI capabilities aligns with industry trends towards more secure and efficient payment solutions. These innovations could strengthen OLB Group's competitive advantage and market share in the eCommerce and payment processing sectors.
The anticipated milestone of partnering with minor league baseball teams for ticketing systems could open new revenue streams and cross-promotional opportunities. However, the success of these initiatives will largely depend on the effective marketing and seamless integration of these services into their existing ecosystem.
Overall, these strategic moves position OLB Group well for future growth, but execution risk and competitive pressures in the fintech space should be closely monitored.
The ongoing litigation with FFS Data and Clear Fork Bank is a complex issue that could have significant financial and reputational ramifications for OLB Group. The company is suing to recover
Writing off the FFS Portfolio reflects a conservative but necessary approach to mitigate immediate financial impacts. However, investors should be aware of the potential for additional legal expenses and the uncertainty of the litigation outcome. The counterclaims from FFS Data and Clear Fork Bank add another layer of complexity and risk.
Spinning off DMint, their Bitcoin mining subsidiary, as a separate entity may help isolate and manage these legal risks more effectively, focusing OLB Group's resources on their core fintech operations.
In conclusion, while the strategic moves are in the right direction, the litigation remains a significant overhang that should be monitored closely.
NEW YORK, NY / ACCESSWIRE / June 11, 2024 / The OLB Group, Inc., (NASDAQ:OLB) , a diversified Fintech eCommerce merchant services provider and cryptocurrency mining enterprise, issued an open Letter to Shareholders from Chairman and CEO of OLB Group, Ronny Yakov, providing a review of a challenging 2023 and anticipated milestones for 2024.
Dear Shareholders,
Starting on a positive note, our revenues going forward will reflect business from the recent acquisition of the bodegas/convenience store network portal, Black011.com, and the mobile brands Blackwireless.com and Mangomobile.com. OLB recently acquired the remaining
Merchant payment services continues to be our core business and the primary business related to our custom-developed applications, which remains our strongest competitive advantage. For example, we have begun incorporating point-of-sale systems and merchant boarding components into the black011.com portal.
We are expanding our network of sport ticketing systems to minor leagues baseball teams and stadiums. Currently, OLB has partnered with eight (8) teams with a number of additional customers to be announced upon signing of contracts.
ShopFast™ - Our Omni Commerce platform for services online, in-store and on-mobile services is fully integrated with the latest technologies to provide mobile commerce armed with up-to-date fraud prevention and 3D Secure technology.
OLBPay™, our billing and invoicing platform, will have AI components related to support invoice prediction and fraud preventions and is projected to launch by Fourth Quarter, 2024.
SecurePay ™, our payment gateway, is now fully integrated and certified with Total Systems (TSYS), Elavon for Visa, MasterCard and Amex, and Jack Henry for ACH Payments. Secure Pay is also providing Stored Credit Cards and a wallet technology for recuring billings and contactless payments.
Status Update on DMint Spinoff
On April 19, 2024, we confidentially filed an updated registration statement and a response to SEC comments on prior versions of the registration statement relating to the spin-off DMint, Inc., our Bitcoin mining subsidiary. We anticipate a clearer picture of the pending record date and spin-off date in the coming weeks, at which point, the Company will be announcing a Shareholder of Record date for the DMint stock dividend to OLB shareholders. In anticipation of the spin-off of DMint, we will be reporting in our quarterly financial statements for the six months ended June 30, 2024, DMint's underlying business as a Divested Asset, and the Liabilities of DMint on the balance sheet of OLB will be written off when we distribute shares of DMint to OLB shareholders. We are resubmitting the S-1 this week to address the remaining questions to the SEC.
Despite the revenues loss resulting from the termination of merchant services of the acquired portfolio, which we have fully written off, the company projects a revenue run rate of at least
Ongoing Litigation Against FFS Data and Clear Fork Bank
We have taken a conservative approach to the merchant portfolio acquired from FFS Data in 2021 (the "FFS Portfolio"). In light of the ongoing fraud claims against FFS Data, we have made the decision to write off the FFS Portfolio and anticipate the recovery of our entire investment upon conclusion of the litigation. We are suing to reverse the transaction and seek the return of the Company's
The Company is engaged in ongoing litigation with FFS Data relating to a breach of contract in connection with the portfolio of merchants acquired in 2021 (the "Acquired Merchant Portfolio"), whereby the Company is making a claim to recover the purchase price it paid for the Acquired Merchant Portfolio and FFS is claiming that it should be paid the remaining portion of the purchase price of the Acquired Merchant Portfolio which was not paid because of the breaches of representations made by FFS about the underwriting of the merchants in the Acquired Merchant Portfolio. In addition, in connection with the litigation with FFS, OLB has also made a claim against Clear Fork Bank https://www.clearfork.bank/ , the payment processing bank for the Acquired Merchant Portfolio, for damages the Company suffered as a result of it having to cease processing transactions for the merchants underlying the Acquired Merchant Portfolio. The Bank has filed a counterclaim for fees incurred by it in connection with the transactions processed since the acquisition of the Acquired Merchant Portfolio by the Company. However, the damages claimed have been materially reduced over time due to account balancing which was not completed at the time of the counterclaim.
The management at OLB Group is fully engaged in the success of the company, continues to periodically buy shares at the open market and financially support the company. Today the company has no long-term liability.
In conclusion, we believe that after the spinoff of DMint, OLB Group will attract analyst research coverage for both entities as separate, pure play companies engaged in Bitcoin mining and merchant services respectively.
Regards,
Ronny Yakov,
CEO
OLB Group, Inc.
About OLB Group, Inc.
The OLB Group, Inc. is a diversified Fintech eCommerce merchant services provider and Bitcoin mining enterprise. The Company's eCommerce platform delivers cloud-based merchant services for a comprehensive digital commerce solution to merchants in all 50 states. In addition, through its ownership of the Black 011 platform, OLB Group can provide its services to an additional network of 31,600 convenient stores and bodegas in the United States. DMint, a wholly owned subsidiary of OLB Group, is engaged in the mining of Bitcoin in a facility in Tennessee utilizing sustainable hydroelectric and solar power.
For more information about The OLB Group, please visit https://www.olb.com and http://investors.olb.com
If you have any specific questions about anything, please post the question on our website and we will review if it is appropriate we all will publish it that everyone can see the response.
Frequently asked questions by investors: https://investors.olb.com/investors-faq/
Safe Harbor Statement
All statements from The OLB Group, Inc. in this news release that are not based on historical fact are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, but are not limited to, statements concerning the impact of COVID-19 on our operations and financial condition, our ability to implement our proprietary merchant boarding and CRM system and to roll out our Omni Commerce and SecurePay applications, including payment methods, to our current merchants and the integration of our secure payment gateway with our crowdfunding platform, our ability to successfully launch a cryptocurrency mining operation and our ability to earn revenue from the new operations. While the Company's management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of our control, that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include statements regarding the expected revenue and income for operations to be generated by The OLB Group, Inc. For other factors that may cause our actual results to differ from those that are expected, see the information under the caption "Risk Factors" in the Company's most recent Form 10-K and 10-Q filings, and amendments thereto, as well as other public filings with the SEC since such date. The Company operates in a rapidly changing and competitive environment, and new risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. The Company disclaims any intention to, and undertakes no obligation to, update or revise any forward-looking statement.
Contacts
OLB Group Investor Relations
Rick Lutz
ir@OLB.com
(212) 278-0900 Ext. 333
SOURCE: The OLB Group, Inc.
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