OLB

OLB GROUP, INC. - 10-Q Summary (Period Ended June 30, 2009)

Business Context and Reporting Period

The OLB Group, Inc. is a smaller reporting company and e-commerce service provider based in New York, NY. This Form 10-Q covers the quarterly period ended June 30, 2009, and the six-month period ended on the same date. The company plans to distribute software products including "ShopFast PC" and "ShopFast DSD" to enable businesses to sell goods online. As of July 31, 2009, the company had 56,782,832 shares of common stock outstanding.

Key Financial Metrics

Debt and Liquidity: The company reported a cash overdraft of $869 and significant accrued liabilities, including $239,968 in accrued salary and $186,481 in judgment payable with accrued interest. Total liabilities exceeded total assets by approximately $637,713, resulting in a stockholders' deficit.

Material Changes vs. Prior Period

• Revenue Generation: The company generated $178,256 in revenue for the six months ended June 30, 2009, compared to zero revenue in the same period in 2008. This was driven by internet sales.
• Expense Reduction: General and administrative expenses decreased by $50,333 (45%) to $60,343, primarily due to reduced professional fees and software development costs.
• Net Loss Improvement: The net loss decreased by $112,889 to $132,515 compared to the prior year period.
• Liability Increase: Total current liabilities increased by approximately $132,547, driven largely by a $114,968 increase in accrued salary and the emergence of a cash overdraft.

Outlook, Risks, and Management Commentary

Going Concern: The financial statements include an explanatory paragraph expressing substantial doubt about the company's ability to continue as a going concern. This is due to significant operating losses and a working capital deficit of approximately $642,678. The company's ability to continue operations is dependent on obtaining additional equity or debt financing.

Management Plan: Management intends to launch the marketing of the ShopFast PC software component by the end of the fourth quarter of fiscal 2009. Plans include producing an infomercial and running a media campaign if a return on advertising spend of at least $1.50 for every $1.00 spent is achieved. The company is also redesigning ShopFast PC to allow clients to create their own internet storefronts.

Risks: The company relies heavily on loans from its President and principal stockholder, Ronny Yakov, who has no binding commitment to provide further financing. If additional capital cannot be raised, the company will be unable to implement its business plans.

Investor Verification Checklist

• Financing Status: Verify if the company has secured the additional financing required to address the working capital deficit and fund the planned marketing campaigns.
• Product Launch: Confirm the status of the ShopFast PC and ShopFast DSD software testing and the timeline for the planned Q4 2009 launch.
• Related Party Debt: Review the terms and repayment status of the loans and accrued salaries owed to the President, which constitute a significant portion of liabilities.
• Legal Obligations: Investigate the nature of the $186,481 judgment payable with accrued interest listed in current liabilities.
• Revenue Sustainability: Assess whether the revenue generated in the first half of 2009 is sustainable or if it was a one-time event, given the company's history of zero revenue in the prior year.