OLB GROUP, INC. Commitments Disclosure

NOTE 14 – 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 November 24, 2021, the Company entered into an Asset Purchase Agreement (the “Agreement”) dated as of November 15, 2021, with FFS Data Corporation (“FFS”) whereby the Company acquired a portfolio of merchants utilizing financial transaction processing services (the “Acquired Merchant Portfolio”). 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. However, the Company is engaged in ongoing litigation with FFS in the Supreme Court of the State of New York, New York County relating to the Acquired Merchant Portfolio wherein: (i) FFS alleges the Company breached the contract by failing to pay the balance of the purchase price; and (ii) the Company seeks to recover the purchase price along with damages arising from FFS’ breach of representations and warranties and other misrepresentations  about the Acquired Merchant Portfolio which ultimately resulted in the termination of the bank processing agreement by Clear Fork Bank (the “Bank”).  In addition, the Company has filed a lawsuit in the District Court of the 42^nd Judicial District, Taylor County, Texas against the Bank, Timothy Cooper, Daniel Neff, Anthony Sandoval, Lawrence Kentz, Slone Balliew, Olan Beard and Ricky Beard seeking damages the Company suffered as a result of it having to cease processing transactions for the merchants underlying the Acquired Merchant Portfolio. More specifically, the Company has asserted the following causes of action: (i) Negligent Supervision against the Bank; (ii) Fraud against all Defendants; (iii) Breach of Fiduciary Duty against the Bank; (iv) Negligence against all Defendants; (v) Common Law Indemnification against the Bank; (vi) Negligent Misrepresentation against all Defendants; and (vii) Vicarious Liability against all Defendants.  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. The actions are currently in discovery and trial dates have not been set.  

DMINT is currently in a contract dispute with a contractor. The Company has paid $100,000 to the contractor for work completed and materials provided and returned materials to offset the potential liability of approximately $444,000. The Company has recorded just over $315,000 in accounts payable related to the matter. The matter continues to be in discovery; however, the parties continue to discuss settlement. The parties are working on a payment schedule but have been unable to agree on terms to date.

Company management has recognized a liability for the $2,000,000 contingent payment amount as of December 31, 2025 and 2024. Legal proceedings regarding this matter began in 2022 and have continued through 2025.