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Benzinga
  • 2 years ago
Ronny Yakov, CEO, and Patrick Smith, VP of Finance for OLB Group Inc., were recently interviewed by Benzinga.

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 over 10,500 merchants in all 50 states. DMint, a wholly owned subsidiary of OLB Group, is mining Bitcoin in a facility in Tennessee utilizing sustainable hydroelectric and solar power.

The company has recently focused on providing services to the underbanked.

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Transcript
00:00 Welcome, Benzinga Nation. You know, we love to bring executives from publicly traded companies to get your questions answered.
00:07 And we've got a great conversation happening here with Rony Jakov, who is the CEO and chairman, and also Patrick Smith, who is the vice president of finance of the OLB Group.
00:16 Ticker on the Nasdaq is OLB.
00:19 Gentlemen, welcome to the show.
00:20 Thank you. Thank you for having me.
00:22 Glad to be here.
00:23 Absolutely.
00:24 And look, before we go ahead and dive into the nitty gritty aspect of things, Patrick, give me a quick overview of what is it that your company does?
00:30 OK, sure.
00:32 OLB Group, the OLB Group is a fintech company that specializes most of our revenue right now comes from the payments industry.
00:39 And when I say payments, it's debit, credit card, basically electronic payment processing.
00:43 That's pretty much where we specialize.
00:46 We have our own payment gateway.
00:47 So that's ours.
00:48 It's proprietary.
00:49 We maintain that in-house.
00:50 We also do have software.
00:53 We're also a software company.
00:54 We have our own proprietary software systems.
00:56 And we also have a Bitcoin mining subsidiary at the time.
00:59 Now, Ronnie, you recently had a shareholder meeting and I just want to get some quick insights.
01:06 What significant outcomes or decisions were made during that meeting?
01:09 Well, the shareholder meeting was based on we got to a point that we have to reverse our stock.
01:15 We want to avoid the delisting of Nasdaq.
01:18 And that was the main reason for the shareholder meeting.
01:23 We voted 10 to 1 to split the stock.
01:26 That was the main reason for the shareholder meeting.
01:28 And now, you have the DEMINT spin off to OLB shareholders, which has been such a topic of interest, Ronnie.
01:34 Give me an update on the progress of that initiative and where the company currently stands in the implementation of it.
01:40 Sure. So basically, we filed the last year the S1 to register the company to be a standalone trading company.
01:51 And we got one round of comments.
01:54 We answered. We got the second one that we filed a week ago.
01:58 And we're waiting for pretty much to get the comments and see how many comments we're going to get.
02:03 We anticipate to get it within the next two, three weeks.
02:08 And we'll have a good indication as when, you know, we're going to set up a record date for those shareholders.
02:15 Now, I'm glad you mentioned that.
02:17 And we can, you know, talk to you again once you set that date.
02:20 Patrick, following the spin off of DEMINT, right, the Bitcoin mining industry, the subsidiary itself,
02:25 what areas do you perceive to kind of be the most promising for the revenue and more importantly, the income growth for the company itself?
02:32 After the spin off of DEMINT, I think the company is going to go back to focusing mainly on the payment side of the company.
02:37 It's going to be payment processing and payment technology.
02:39 Anything that basically point of sale systems, anything basically a transaction based business.
02:46 We've got different areas, different channels we're going after, but that will be the focus of the company.
02:50 And mainly the acquisition that we did the middle of last year, that is for the underbanked community.
02:56 We plan to expand tremendously and using our resources from the payment systems.
03:02 We disregard that.
03:05 That's the main focus.
03:06 Yeah, I'm glad you brought that up because that's where I want to come to you next, Ronnie, is, you know, you're moving into that aspect.
03:11 But what are some strategies in place to ensure the success in the area, though?
03:15 Well, the strategy is we acquired a platform that has a prepaid payment solution for companies that can put small bodegas and convenience stores that they can purchase products and resell them.
03:30 The access is we today have a thirty two thousand locations that we have the distribution.
03:38 We started and we have now the fifth, the first round is eighteen hundred locations that we are actively doing business with.
03:46 It's a very quick product launch and we can pretty much the same day we can launch an offering to all those locations in one solution.
03:57 It's a reliable customer service that is 24/7.
04:02 We have instant reporting to the bodega owners and to everybody in the network, including the distributors.
04:08 And we have direct access to close to two million consumers in this respect.
04:15 It's very reliable.
04:17 A marketing team that is marketing those things.
04:20 Yeah. I love the fact that you can kind of provide those updates and reports such great speeds because it's kind of important for the company and business to kind of know, hey, what products are selling, what margins am I at, where the revenue is at.
04:31 So that's quite important.
04:32 Speaking of money, Patrick, you had a net loss of more than twenty three million last year, which is up significantly from twenty twenty two.
04:39 Tell me why.
04:40 And do you expect this trend to kind of continue for the rest of twenty twenty four?
04:44 First of all, I don't think the trend will continue for twenty twenty four.
04:47 It was a significant increase in the losses previous year.
04:51 The biggest piece of the losses we had to actually write off one of the portfolios.
04:55 We did an acquisition at the end of twenty twenty one and there's litigation around it, but we had to basically completely terminate and write that off this year.
05:04 That was a twelve, fourteen million dollar write off.
05:07 So that was a huge piece of the write off.
05:08 The next piece of the loss would be related to the depreciation.
05:13 The mining equipment that we have for the Bitcoin mining, it's pretty depreciation on that's pretty heavy, you know, because we've got we've spent over nine million dollars on machines and all that's being depreciated off.
05:25 Other than that, we also due to the write off of the portfolio, our litigation expense was up for the year.
05:30 And so that was another significant increase.
05:31 All right, Ronnie, everyone in the world is talking about AI, right?
05:35 From chat GPT to the video side of things.
05:38 What are some tools that you feel like are really, really bringing disruptive innovations in the tech space?
05:44 Well, I mean, we're looking at those things and we already started working on some developments related to that.
05:51 We're going to announce probably within a few months products from our core software that are coming to invoice that are predicting pretty much how to build invoices, our payment gateway with all the tools and recurring billings.
06:08 They're all of them going to be components coming from the AI solutions to that.
06:13 Definitely everybody is going to start using it.
06:16 We're using starting to use already some tools that are related to customer service that would pretty much take the heavy lifting from human being answering to those things.
06:28 You know, Ronnie, I saw like a an article the other day about how having AI, especially in the customer service space, not only increases the speed of responses, but also the accuracy and the problem solving as well.
06:41 So it kind of gives you a lot of benefits on that aspect.
06:43 So I'm looking forward to what you guys do with it.
06:45 Patrick, final thoughts from you.
06:47 I think Ronnie's right. I mean, I think we're working on different things.
06:50 And to your point, the AI with customer service is kind of like a.
06:53 Chat on steroids, it's a little more accurate, these things done a little quicker.
06:59 Yeah, no, I couldn't agree more.
07:01 Ronnie, final thoughts, any topics that you want to discuss that I didn't get a chance to bring up?
07:05 Yes, on the last year and a half, we're going under very big litigation with the people that sold us the portfolio.
07:15 The company's called FFS Data.
07:17 And, you know, they're basically the bridge of fiduciary duties and contracts that basically ended up, you know, us writing twelve million dollars of the portfolio itself.
07:35 It's ongoing litigation with them and also with the bank that was involved.
07:41 That's still for bank.
07:42 Both of them are still on going litigation.
07:46 So I cannot put more details on that on the camera, but definitely over the coming days, we're going to put also share all the letter that would describe the entire situation itself.
07:58 Well, hey, I look forward to having more conversations when that gets finalized.
08:02 And of course, many more for the rest of twenty twenty four.
08:04 Thank you both so much for joining us.
08:06 I appreciate it for having us.
08:08 Thanks. Have a great day.
08:09 Thanks for your time. Absolutely.
08:11 That is Ronnie Yacob, who is the CEO and chairman.
08:14 And you've also got Patrick Smith, the vice president of finance for the OLB Group.
08:19 Ticker on the Nasdaq is OLB.
08:23 And.
08:23 And.
08:28 ♪ Hey ♪
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