The OLB Group, Inc. filed audited financial statements of Excel Corporation as of and for the years ended December 31, 2017 and December 31, 2016 and the unaudited pro forma combined financial information of the company relating to the acquisition of assets of the subsidiaries of Excel Corporation as of and for the year ended December 31, 2017
NEW YORK, Oct. 09, 2018 (GLOBE NEWSWIRE) — The OLB Group, Inc. (“we,” “us,” “our,” “OLBG” or the “Company”), a FinTech company, has seen a significant increase in revenues for the combined company in 2018 due to the asset acquisition. Following the asset acquisition, the Company has three complimentary businesses.
Since the financial statements are presented in accordance with GAAP accounting, we are presenting an abbreviated NON-GAAP version of the transaction. This version includes unaudited combined pro forma financial information based on the historical financial statements of the Company and Excel Corporation (“Excel”). The combined pro forma balance sheet and combined statement of operations for the year ended December 31, 2017 are presented as if the acquisition of the subsidiaries of Excel had occurred at the beginning of the year presented.
The following table is a NON-GAAP presentation of 2017 (proforma), actual and projected 2018 and projected 2019 statements.
| OLB + Excel ASSETS Combined | Act+Projections | Projected | |
| 2017 | 2018 | 2019 | |
| Total revenues | $ 14,959,252 | $ 12,482,200 | $ 16,151,616 |
| Total cost of revenues | $ 9,778,348 | $ 8,390,377 | $ 9,739,974 |
| Gross profit | $ 5,180,904 | $ 4,091,823 | $ 6,411,642 |
| Total operating expenses | $ 15,405,921 | $ 2,619,103 | $ 2,747,490 |
| OPERATING MARGIN | $ (10,225,017) | $ 1,472,720 | $ 3,664,152 |
| Total other expenses | $ (3,995,242) | $ 660,344 | $ 866,875 |
| NET INCOME (LOSS) Per GAAP | $ (14,220,259) | $ 812,376 | $ 2,797,277 |
| Interest Exp | $ 3,863,396 | $ 688,875 | $ 866,875 |
| Income Tax | $ – | $ – | |
| Depreciation & Amortization | $ 446,525 | $ 438,828 | $ 438,828 |
| Goodwill impairment | $ 7,914,269 | $ – | |
| EBITDA | $ (1,996,069) | $ 1,940,080 | $ 4,102,980 |
| Adjusted EBITDA | $ 2,115,533 | $ 1,940,080 | $ 4,102,980 |
Adjusted EBITDA Reconciliation
| NET INCOME (LOSS) per GAAP | $ (14,220,259) | |
| Add Back Non Recurring Expenses: | ||
| Salaries | $ 1,301,518 | |
| Legal | $1,747,427 | |
| SG&A | $ 534,838 | |
| Discontinued Portfolio | $ 274,806 | |
| Contract Services | $ 123,233 | |
| Software Expense | $ 63,000 | |
| Net Income – Adjusted after Non Recurring Costs | $ (10,175,437) | |
| Goodwill impairment | $ 7,914,269 | |
| Interest Expense | $ 3,933,621 | |
| Depreciation | $ 80,124 | |
| Amortization | $ 362,956 | |
| Adjusted EBITDA after Non recurring Costs | $ 2,115,533 | |
The above Non-GAAP presentation should be read in conjunction with the historical financial statements and accompanying notes of Excel and the Company’s historical financial statements and accompanying notes, which were previously filed with the Securities and Exchange Commission and is available online at the SEC’s website at: https://www.sec.gov/Archives/edgar/data/1314196/000121390018013451/0001213900-18-013451-index.htm
Explanation of Non-GAAP Financials
2017 actual financials represent OLBG and the acquired assets of Excel. Any Excel revenue or expense not related to the acquired assets or that are non-recurring have been excluded (including $4.0mm of operating expenses, $3.9mm of interest and other expenses and $7.9mm for impairment of Goodwill as set forth in the reconciliation above). Excel did not generate any revenue other than revenue associated with the assets purchased by OLB.
Assumptions for Projected Financial Information
The assumptions for the increase in projected revenues are related to increased sales. These projections include 30 new processing deals per month starting in 2019 and increasing to 50 deals per month for following year. The projections also assume that we are strengthening our retention strategy and assume no attrition with current merchants. For the Omni-channel software, the Company has plans to offer the software to its current merchant base. Projected close rate for the software is calculated at 23% of current merchant base. For new software sales, the projections include 75 new OmniSoft merchants per month starting mid-2019. CrowdPay revenue is projected to increase by adding 5 new CrowdPay deals per month starting in January 2019. All increased sales are based on the Company increasing its current sales team. The Company has already started the process of recruiting and hiring sales representatives and sales management. There can be no assurances that any of the foregoing assumptions will be obtained or accurate or that we will hire new staff or increase our revenue. Accordingly, there is a risk that the assumptions made in preparing the foregoing projections, or the projections themselves, will prove inaccurate. There may be differences between actual and projected results, and actual results may be materially different from than those contained in the projections.
Background about the acquisition
On April 9, 2018, Securus365, Inc., a Delaware corporation (“Securus”), eVance Capital, Inc., a Delaware corporation (“eVance Capital”), and eVance Inc., a Delaware corporation (“eVance”, and collectively with Securus and eVance Capital, the “Purchasers”), each of which Purchaser is a newly formed wholly-owned subsidiary of the Company, entered into a Memorandum of Sale (the “Memorandum of Sale”) by and among the Purchasers and GACP Finance Co., LLC, a Delaware limited liability company (“GACP”), acting solely in its capacity as administrative agent and collateral agent to certain secured lenders of the Debtors (as defined below), pursuant to which the Purchasers acquired substantially all of the assets of the Debtors (the “Asset Acquisition”) through a foreclosure sale arranged by GACP under the Uniform Commercial Code of the State of New York (“UCC”) of the collateral of Excel Corporation (“Excel”) and its subsidiaries, Payprotec Oregon, LLC, Excel Business Solutions, Inc. and eVance Processing, Inc. (Excel and such subsidiaries, collectively, the “Debtors”) under the Loan and Security Agreement, dated as of November 2, 2016, by and among GACP, the lenders thereunder and the Debtors, and related loan documents, as amended.
About The OLB Group, Inc.
The OLB Group, Inc. is a FinTech company with suit of financial applications and services provider that delivers fully outsourced branded and private label Omnicommerce solutions to highly trafficked websites and retail locations. We provide end-to-end e-commerce, mobile and retail solutions to customers.
OLB Group, Inc. common stock is traded Over-The-Counter on the OTCQB under stock symbol: OLBG. Additional information about the Company can be found at https://olb.com
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. 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 Current Report on Form 8-K (available online at the SEC’s website at https://www.sec.gov/Archives/edgar/data/1314196/000121390018013643/0001213900-18-013643-index.htm) and on 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.
Investors & Analysts Contact:
Patrick Smith
VP of Finance
(212) 278-0900
[email protected]
EBITDA and Adjusted EBITDA Definitions:
“EBITDA” is a non-GAAP measure defined by the Company, as net income/ (loss) excluding interest expense/ (income), income tax expense, depreciation expense, and amortization expense. “Adjusted EBITDA” is a non-GAAP measure defined by the Company, as net income/(loss) excluding interest expense/(income), income tax expense, depreciation expense, amortization expense, stock-based compensation expense, the loss/(gain) on purchased specific purchased assets and non-recurring expenses. The Company’s management believes that the non-GAAP measure of “EBITDA” and “Adjusted EBITDA” enhances an investor’s understanding of the Company’s financial and operating performance and its future prospects by being more reflective of core operating performance. The Company’s management uses this financial metric for strategic decision making, forecasting future financial results, and evaluating current period financial and operating performance. The presentation of non-GAAP financial information is not intended to be reviewed in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. A reconciliation of GAAP to non-GAAP results is included in the financial tables in this press release.