UNITED STATES OF AMERICA SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: SEPTEMBER 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission File Number: 001-39973 CUENTAS, INC. (Exact name of Registrant as specified in its charter) | | | (Stat ...

UNITED STATES OF AMERICA SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: JUNE 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission File Number: 001-39973 CUENTAS, INC. (Exact name of Registrant as specified in its charter) Florida 20-35372 ...

UNITED STATES OF AMERICA SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission File Number: 001-39973 CUENTAS, INC. (Exact name of Registrant as specified in its charter) | Florida | 20- ...

Financial Condition - As of December 31, 2024, the company had cash and cash equivalents of approximately $15,000, a working capital deficit of approximately $3,170,000, and an accumulated deficit of approximately $58,255,000[66]. - The company's auditors expressed substantial doubt regarding its ability to continue as a going concern due to a lack of financial liquidity[67]. - The company has incurred substantial losses from operations to date and may never achieve profitability, which could adversely affect the market value of its common stock[76]. - The company requires additional funding to support its operations, and any new equity financing could have a substantial dilutive effect on existing stockholders[66]. - The company's convertible debt could lead to dilution of existing shareholders if additional shares are issued upon conversion[103]. Internal Controls and Compliance - The company is currently facing material weaknesses in its internal control over financial reporting, which could result in material misstatements in its financial statements[78]. - The company is subject to various federal, state, and foreign consumer protection laws, and failure to comply could have a material adverse effect on its business and financial condition[89]. - The company is subject to increased federal regulations, including the CARD Act and FinCEN's Prepaid Access Rule, which may raise operational costs and impact revenues[90]. - Compliance with Money Transmitter Licenses is mandatory in several states, and failure to maintain these licenses could adversely affect the company's operations and financial condition[91]. - The company collects and stores personally identifiable information, making it subject to various privacy regulations, and any data breaches could lead to significant liabilities and reputational damage[92]. - The company is currently out of compliance with SEC filings but expects to resolve this issue shortly, which is crucial for maintaining investor confidence[102]. Operational Risks - The company is involved in various litigation matters that could harm its business and financial condition if resolved adversely[82]. - The company relies on a small number of key personnel, and the loss of any of these individuals could materially and adversely affect its operations[86]. - The company is subject to evolving anti-money laundering regulations, which may increase operational costs and disrupt business[88]. - Cuentas Mobile relies on third-party network operators for service delivery, making its performance dependent on the reliability of these providers[97]. - The company has an operating history of almost three years in the mobile phone business, and failure to attract and retain subscribers could significantly impact its financial results[99]. Market Competition and Stock Performance - The company faces competition from larger, well-financed competitors, which may hinder its ability to compete effectively in the market[95]. - The company's stock is subject to penny stock rules, which may reduce trading activity and make it difficult for shareholders to sell their shares[106]. - The company does not expect to pay dividends for the foreseeable future, which may deter potential investors seeking current income[110]. - The company's ability to achieve and maintain profitability is dependent on generating revenues and managing development costs effectively[73].

(Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: SEPTEMBER 30, 2024 UNITED STATES OF AMERICA SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission File Number: 001-39973 CUENTAS, INC. (Exact name of Registrant as specified in its charter) (State or O ...

Revenue and Income - Revenue for the six months ended June 30, 2024, totaled $672,000, a significant increase from $104,000 for the same period in 2023, primarily driven by a $569,000 increase in wholesale telecommunication services[94] - The company recognized a $475,000 credit from InComm as other income in Q3 2024 following the termination of the processing agreement[83] - Revenue for the three months ended June 30, 2024, totaled $34,000, a decrease from $40,000 for the same period in 2023, attributed to lower sales of digital products[107] Costs and Expenses - The cost of revenues during the six months ended June 30, 2024, was $749,000, compared to $276,000 for the same period in 2023, reflecting increased purchases of wholesale minutes and digital products[96] - Operating expenses totaled $1,262,000 for the six months ended June 30, 2024, a decrease of $1,145,000 compared to $2,407,000 for the same period in 2023, representing a reduction of 47.6%[101] - Selling, general and administrative expenses decreased by $1,158,000, or 48.2%, to $1,243,000 for the six months ended June 30, 2024, primarily due to reductions in officers compensation and professional services[102] - Operating expenses for the three months ended June 30, 2024 totaled $488,000, down from $780,000 in the same period in 2023, representing a decrease of 37.4%[114] Profitability and Loss - The gross loss for digital products and General Purpose Reloadable Cards was $93,000 for the six months ended June 30, 2024, compared to a loss of $128,000 in the same period in 2023[98] - The company incurred a net loss of $2,517,000 for the six-month period ended June 30, 2024, an improvement from a net loss of $3,107,000 for the same period in 2023[106] - The company reported a net loss of $2,072,000 for the three-month period ended June 30, 2024, compared to a net loss of $1,412,000 for the same period in 2023[119] Financial Position - As of June 30, 2024, the company had total current assets of $1,321,000 and total current liabilities of $3,656,000, resulting in a working capital deficit of $2,335,000[122] - The company had approximately $56,000 in cash and cash equivalents and an accumulated deficit of approximately $57,463,000 as of June 30, 2024, raising substantial doubt about its ability to continue as a going concern[125] Investments and Financing - Cuentas has made equity investments in real estate projects in Florida, aiming to provide affordable housing alternatives to underserved communities[85] - The Company's investment activities for the six months ended June 30, 2023 resulted in net cash used of $2,157,000, primarily due to investments totaling $2,064,000 in Brooksville Development Partners, LLC[129] - Financing activities for the six months ended June 30, 2023 resulted in net cash received of $4,315,000, mainly from the sale of common stock totaling $4,319,000[130] - The Company acquired 19.99% of the membership interests of Cuentas SDI, LLC for a purchase price of $215,500 on May 20, 2024[132] - The Company signed a Membership Interest Purchase Agreement on May 22, 2025, for the sale of its full interests in Brooksville for total consideration of $800[131] Market and Strategic Focus - Cuentas has exited the prepaid debit-card vertical but remains engaged in the FinTech sector, leveraging InComm's distribution network for higher-margin digital-content products[84] - The company is focusing on integrating FinTech, e-finance, and e-commerce services to deliver mobile financial services to unbanked and underbanked populations in the USA[82] - Cuentas's distribution network includes over 31,000 bodegas and convenience stores, enhancing access to digital products and services for target markets[91] - The Hispanic Latino population in the U.S. is over 62 million, representing a significant market for Cuentas's financial services[93] - The company plans to evaluate synergies between CuentasMAX and World Mobile's platform for potential integration and further development[81] Operational Outlook - Management does not expect inflation or seasonality to materially impact operations in the future[133] - As of June 30, 2024, the Company had no off-balance sheet arrangements[134] - Recently issued accounting standards are not expected to have a material impact on the Company's consolidated financial statements[137] Gross Margins - Gross loss margin for the six months ended June 30, 2024 was 11%, with a 46% gross profit margin for the telecommunications segment and a gross loss margin of 121% for the digital product segment[100] - Gross loss margin for the three months ended June 30, 2024 was 23%, with a 100% gross profit margin for the telecommunications segment and a 21% margin for the digital product segment[113]

Core Viewpoint - Cuentas, Inc. has partnered with World Mobile Group to provide an alternative internet access solution for 23 million households in the U.S. following the termination of the Affordable Connectivity Program, aiming to deliver cost-effective connectivity tailored to low-income families [1][10]. Group 1: Partnership and Market Opportunity - The partnership with World Mobile aims to leverage innovative technology to create localized networks, providing internet access at a cost that is 12 times less than traditional networks [6]. - The termination of the Affordable Connectivity Program presents a significant market opportunity for alternative telecommunication providers like Cuentas, targeting a potential market of 23 million households [10]. - Cuentas plans to promote this service through a network of 30,000 retail outlets across the U.S., enhancing its distribution capabilities [9]. Group 2: Social Impact and Services - The initiative is designed to facilitate access to essential services such as online education, job opportunities, healthcare, and community engagement for low-income families [3]. - Cuentas is creating an alternative financial ecosystem that integrates fintech, mobile telecommunications, and real estate services to serve the unbanked and underbanked Hispanic demographic [4]. - The Cuentas Mobile offering will include advanced eSIM and traditional SIM technology, ensuring reliable service and soon incorporating secure communications solutions [7]. Group 3: Company Overview - Cuentas, Inc. is focused on delivering next-generation digital financial services to underserved populations in the U.S. through its proprietary technologies [4]. - The company has launched a General Purpose Reloadable (GPR) Card that includes a digital wallet and offers discounts and rewards for purchases [4]. - World Mobile operates on a blockchain-based model, promoting a sharing economy that allows individuals and businesses to earn revenue by operating nodes on its network [11].

Cuentas to Integrate with World Mobile's Decentralized Network, Offering US Mobile Users Costefficient Global Roaming and Connectivity at 12 Times Less Than Legacy Networks MIAMI BEACH, FL, June 04, 2024 (GLOBE NEWSWIRE) -- Cuentas, Inc. (OTC: CUEN & CUENW) ("CUEN" or "the Company"), a pioneer driving the seamless integration of fintech, mobile telecommunications, and real estate for the unbanked and underbanked Hispanic demographic, proudly announced today the signing of a Letter of Intent (LOI) with World ...

Cuentas, Inc. Announces Outstanding Q1 2024 Financial Results: Reports Astonishing 998% YOY Sales Increase, Provides Update on Sale of Tampa Real Estate and Distribution Partnership Ownership. MIAMI BEACH, FL, May 21, 2024 (GLOBE NEWSWIRE) -- Cuentas, Inc. (OTC: CUEN & CUENW) ("CUEN" or "the Company"), a pioneer driving the seamless integration of fintech, mobile telecommunications, and real estate for the unbanked and underbanked Hispanic demographic, announced today the publication of the company's Q1 202 ...

[PART II – OTHER INFORMATION](index=24&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This part covers legal proceedings, risk factors, equity sales, debt defaults, mine safety, other information, and exhibits [ITEM 1. LEGAL PROCEEDINGS](index=24&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The Company is involved in legal proceedings, including an arbitration demand, a settled breach of contract, and an employee compensation claim - The Company received an arbitration demand from Secure IP Telecom, Inc. concerning alleged avoidable transfers from Limecom, with aggregate transfers of less than **$600,000**. The Company denies liability and has accrued **$300,000** as of December 31, 2023, for this matter[3](index=3&type=chunk) - Crosshair Media Placement, LLC filed a breach of contract complaint for **$629,807.74**. The parties reached a settlement agreement for **$630,000**, with **$70,000** paid by December 31, 2023, and a final payment of **$425,000** due May 1, 2024[4](index=4&type=chunk) - A former employee filed a complaint for breach of employment agreement, alleging unpaid compensation. The Company estimates the maximum settlement amount will not exceed **$30,000**[5](index=5&type=chunk) [ITEM 1A. RISK FACTORS](index=24&type=section&id=ITEM%201A.%20RISK%20FACTORS) Investors should review risks and uncertainties detailed in the Company's Annual Report on Form 10-K and other SEC filings - Investors are encouraged to review the risks and uncertainties disclosed in Item 1A ("Risk Factors") of the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and other public filings[6](index=6&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=25&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) No unregistered equity securities were sold during the period, except as previously disclosed - No sales of unregistered securities occurred during the period covered by this report, other than those previously reported[8](index=8&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR DEBT](index=25&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20DEBT) The Company reported no defaults on senior debt during the period - There were no defaults upon senior debt[9](index=9&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=25&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) The Company had no mine safety disclosures to report - There were no mine safety disclosures[10](index=10&type=chunk) [ITEM 5. OTHER INFORMATION](index=25&type=section&id=ITEM%205.%20OTHER%20INFORMATION) The Company reported no other information for this item - There was no other information to report[11](index=11&type=chunk) [ITEM 6. EXHIBITS](index=25&type=section&id=ITEM%206.%20EXHIBITS) Various exhibits were filed, including CEO/CFO certifications and Inline XBRL documents Filed Exhibits | Exhibit Number | Exhibit Description | Filed herewith | | :--------------- | :------------------------------------------------------------------------------------- | :------------- | | 31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | | 31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | | 32.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | | 32.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | | 101.INS | Inline XBRL Instance Document. | X | | 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | X | | 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | X | | 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | X | | 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | X | [SIGNATURES](index=26&type=section&id=SIGNATURES) The report was signed by the CEO and CFO of Cuentas, Inc. on May 20, 2024 - The report was signed by Shalom Arik Maimon, Chief Executive Officer, and Shlomo Zakai, Chief Financial Officer, on May 20, 2024[16](index=16&type=chunk) [PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This part details the Company's unaudited condensed consolidated interim financial statements and related disclosures [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated interim financial statements and their accompanying notes [CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20INTERIM%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) This subsection contains the unaudited condensed consolidated interim financial statements [Unaudited Condensed Consolidated Interim Balance Sheets](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Balance%20Sheets) This statement provides a snapshot of the Company's assets, liabilities, and equity at specific points in time Condensed Consolidated Interim Balance Sheets (USD in thousands) | Item | March 31, 2024 | December 31, 2023 | | :---------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $28 | $205 | | Total Current Assets | $492 | $1,760 | | Total Non-Current Assets | $2,956 | $2,960 | | Total Assets | $3,448 | $4,720 | | Total Current Liabilities | $3,741 | $4,689 | | Total Non-Current Liabilities | $102 | $101 | | Total Liabilities | $3,843 | $4,790 | | Total Stockholders' Deficit | $(395) | $(70) | [Unaudited Condensed Consolidated Interim Statements of Comprehensive Loss](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Statements%20of%20Comprehensive%20Loss) This statement details the Company's revenues, expenses, and net loss over specific interim periods Condensed Consolidated Interim Statements of Comprehensive Loss (USD in thousands) | Item | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :------------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Total revenues | $639 | $64 | | Total cost of revenues | $(708) | $(123) | | Gross loss | $(69) | $(59) | | Total Operating expenses | $(774) | $(1,627) | | Operating loss | $(843) | $(1,686) | | Total other income | $398 | $0 | | Net loss | $(445) | $(1,695) | | Loss per share (basic and diluted) | $(0.15) | $(1.00) | | Basic and diluted weighted average number of shares outstanding | 2,719,668 | 1,696,022 | - Total revenues increased significantly from **$64 thousand** in Q1 2023 to **$639 thousand** in Q1 2024, primarily driven by wholesale telecommunication services[42](index=42&type=chunk) - Net loss decreased substantially from **$(1,695) thousand** in Q1 2023 to **$(445) thousand** in Q1 2024, largely due to a gain from the change in fair value of derivative warrants liability and reduced operating expenses[42](index=42&type=chunk) [Unaudited Condensed Consolidated Interim Statements of Changes in Stockholders' Deficit](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Statements%20of%20Changes%20in%20Stockholders'%20Deficit) This statement outlines changes in the Company's stockholders' deficit over specific interim periods Changes in Stockholders' Deficit (USD in thousands) | Item | December 31, 2023 | March 31, 2024 | | :---------------------------------- | :---------------- | :------------- | | Common Stock Amount | $3 | $3 | | Additional paid-in capital | $54,906 | $55,026 | | Treasury stock | $(33) | $(33) | | Accumulated deficit | $(54,946) | $(55,391) | | Total stockholders' deficit | $(70) | $(395) | | Share based Compensation | - | $120 | | Comprehensive loss for the period | - | $(445) | - The total stockholders' deficit increased from **$(70) thousand** at December 31, 2023, to **$(395) thousand** at March 31, 2024, primarily due to the comprehensive loss for the period of **$(445) thousand**, partially offset by **$120 thousand** in share-based compensation[44](index=44&type=chunk) [Unaudited Condensed Consolidated Interim Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Statements%20of%20Cash%20Flows) This statement reports the cash generated and used by the Company's operating, investing, and financing activities Condensed Consolidated Interim Statements of Cash Flows (USD in thousands) | Cash Flow Activity | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(310) | $(1,453) | | Net cash used in investing activities | $0 | $0 | | Net cash provided by finance activities | $133 | $4,315 | | Increase (decrease) in cash and cash equivalents | $(177) | $2,862 | | Cash and cash equivalents at end of year | $28 | $3,328 | - Net cash used in operating activities decreased from **$(1,453) thousand** in Q1 2023 to **$(310) thousand** in Q1 2024, primarily due to changes in operating assets and liabilities, including a significant increase in accounts payable[48](index=48&type=chunk) - Net cash provided by financing activities decreased substantially from **$4,315 thousand** in Q1 2023 (due to common stock issuance) to **$133 thousand** in Q1 2024 (due to short-term loans)[48](index=48&type=chunk) [NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)](index=8&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20INTERIM%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) This section provides detailed explanations and additional information supporting the interim financial statements [NOTE 1 – GENERAL](index=8&type=section&id=NOTE%201%20%E2%80%93%20GENERAL) This note provides general information about the Company, its delisting, and going concern considerations - The Company was delisted from Nasdaq on December 20, 2023, due to non-compliance with the **$2,500,000** shareholders' equity requirement and now trades on the OTC Pink Current Information tier[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) - As of March 31, 2024, the Company had **$28 thousand** in cash, a negative working capital of **$3,249 thousand**, a shareholder's deficit of **$395 thousand**, and an accumulated deficit of **$55,391 thousand**, raising substantial doubt about its ability to continue as a going concern[56](index=56&type=chunk) - Management is pursuing fund-raising in private equity and capital markets, negotiating to sell mobile services as an MVNO, and has approved a letter of intent to sell the **Brooksville Property** for **$7.2 million** to address liquidity issues[56](index=56&type=chunk) [NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION](index=9&type=section&id=NOTE%202%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES%20AND%20BASIS%20OF%20PRESENTATION) This note outlines the significant accounting policies and the basis used for preparing the financial statements - The unaudited consolidated financial statements are prepared in accordance with GAAP and SEC rules, including all material adjustments deemed necessary by management[57](index=57&type=chunk) - The Company does not expect recently issued accounting standards (ASU 2023-07 on Segment Reporting and ASU 2023-09 on Income Tax Disclosures) to have a material impact on its consolidated financial statements upon adoption[66](index=66&type=chunk)[73](index=73&type=chunk) [NOTE 3 – EVENTS DURING THE PERIOD](index=11&type=section&id=NOTE%203%20%E2%80%93%20EVENTS%20DURING%20THE%20PERIOD) This note details significant events that occurred during the reporting period, including financing and asset sales - On February 7, 2024, the Company sold an unsecured promissory note for **$178,250** principal, receiving net proceeds of **$150,000**. The note incurs a **12%** interest charge, matures November 15, 2024, and is convertible into common shares upon default[74](index=74&type=chunk) - On March 13, 2024, the Company approved a Letter of Intent to sell the **Brooksville Property** for gross proceeds of **$7.2 million**. The property was originally purchased for **$5.05 million** on April 28, 2023[69](index=69&type=chunk)[75](index=75&type=chunk) [NOTE 4 – STOCK OPTIONS](index=11&type=section&id=NOTE%204%20%E2%80%93%20STOCK%20OPTIONS) This note provides information on the Company's stock option activity and related compensation expenses Stock Option Activity (Three months ended March 31, 2024) | Item | Number of Options | Average Exercise Price | | :------------------------ | :---------------- | :--------------------- | | Outstanding at Dec 31, 2023 | 84,999 | $36.97 | | Granted | 270,920 | $0.32 | | Outstanding at Mar 31, 2024 | 355,919 | $9.07 | | Exercisable at Mar 31, 2024 | 355,919 | $9.07 | - Stock options outstanding increased from **84,999** at December 31, 2023, to **355,919** at March 31, 2024, primarily due to **270,920** options granted with an average exercise price of **$0.32**[70](index=70&type=chunk) - Costs incurred for stock-options compensation for employees and directors were **$120 thousand** for the three months ended March 31, 2024, a decrease from **$283 thousand** in the prior year period[77](index=77&type=chunk) [NOTE 5 – RELATED PARTIES](index=12&type=section&id=NOTE%205%20%E2%80%93%20RELATED%20PARTIES) This note discloses transactions and balances with related parties, including officers and affiliated entities Related Party Transactions (USD in thousands) | Item | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :---------------------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Sales to SDI Cuentas LLC | $45 | $12 | | Cost of sales from Next Communications INC | $565 | $0 | | Consulting fees to Angelo De Prado | $0 | $2 | | Consulting fees to Sima Maimon Bakhar | $0 | $2 | Balances with Related Parties and Officers (USD in thousands) | Item | March 31, 2024 | December 31, 2023 | | :---------------------------------------------------------------- | :------------- | :---------------- | | Arik Maimon (Chairman/CEO) | $73 | $73 | | Michael De Prado (Vice Chairman/President) | $96 | $99 | | Current assets - Related parties | $169 | $172 | | Next Communications INC (controlled by Arik Maimon) | $271 | $1,300 | | SDI Cuentas LLC. | $19 | $0 | | Current assets – Accounts receivables | $290 | $1,300 | | Total Due from related parties | $459 | $1,472 | - Sales to SDI Cuentas LLC increased from **$12 thousand** in Q1 2023 to **$45 thousand** in Q1 2024. Cost of sales from Next Communications INC, a company controlled by the CEO, was **$565 thousand** in Q1 2024, up from **$0** in Q1 2023[80](index=80&type=chunk) [NOTE 6 – SEGMENTS OF OPERATIONS](index=14&type=section&id=NOTE%206%20%E2%80%93%20SEGMENTS%20OF%20OPERATIONS) This note provides financial information disaggregated by the Company's operating segments and product lines Revenue by Product (USD in thousands) | Product | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Telecommunications | $25 | $52 | | Wholesale telecommunication services | $569 | $0 | | Digital products and General Purpose Reloadable Cards | $45 | $12 | | Total revenues | $639 | $64 | Gross Loss by Product (USD in thousands) | Product | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Telecommunications | $14 | $(7) | | Wholesale telecommunication services | $4 | $0 | | Digital products and General Purpose Reloadable Cards | $(87) | $(52) | | Total Gross Loss | $(69) | $(59) | - Wholesale telecommunication services generated **$569 thousand** in revenue in Q1 2024, up from **$0** in Q1 2023, becoming the largest revenue contributor. Digital products and GPR Cards revenue increased from **$12 thousand** to **$45 thousand**[87](index=87&type=chunk) [NOTE 7 – SUBSEQUENT EVENTS](index=15&type=section&id=NOTE%207%20%E2%80%93%20SUBSEQUENT%20EVENTS) This note describes significant events that occurred after the balance sheet date but before the financial statements were issued - On May 1, 2024, the Company signed a Letter of Intent with Sekur Private Data Ltd. for a possible share issuance of **30 million** SWISF common shares. This includes **5 million** shares for **$500 thousand** in working capital and **25 million** shares for the transfer of the M&M Telecom MVNO Agreement and FCC 214 license, valued at **$2.5 million** after a **50%** discount[90](index=90&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk) - On May 16, 2024, the Company received a Notice of Termination of Contract from Sutton Bank, its prepaid issuing bank provider, and is evaluating alternative FinTech solutions[94](index=94&type=chunk) - On May 20, 2024, the Company acquired **19.99%** of the membership interests of Cuentas SDI, LLC from OLB Group, Inc. for **$215,500**[95](index=95&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS](index=16&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20AND%20RESULTS%20OF%20OPERATIONS) This section discusses the Company's business, financial condition, and operational results, including forward-looking statements and performance analysis [OVERVIEW AND OUTLOOK](index=16&type=section&id=OVERVIEW%20AND%20OUTLOOK) This subsection provides a strategic overview of the Company's business focus, market position, and future plans - The Company focuses on FinTech services, delivering mobile financial services, prepaid debit, and digital content to unbanked, underbanked, and underserved populations in the USA, particularly the Hispanic/Latino market[100](index=100&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) - The Company made equity investments in Florida real estate projects (Cuentas Casa) to provide affordable housing and plans to sell the **Brooksville Property** for **$7.2 million**, with Cuentas' pro rata portion of net proceeds (estimated **$1.625 million**-**$1.9 million**) to be used for working capital[102](index=102&type=chunk)[143](index=143&type=chunk) - The Company is upgrading its fintech mobile app platform after disruptions in 2023 and is in final negotiations for a new banking partner following the termination notice from Sutton Bank[103](index=103&type=chunk)[108](index=108&type=chunk) [RESULTS OF OPERATIONS](index=19&type=section&id=RESULTS%20OF%20OPERATIONS) This subsection analyzes the Company's financial performance, including revenue, gross profit, and expenses, for the reporting period Revenue Comparison (USD in thousands) | Revenue Source | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :-------------------------------------------- | :-------------------------------- | :-------------------------------- | | Telecommunications | $25 | $52 | | Wholesale telecommunication services | $569 | $0 | | Digital products and General Purpose Reloadable Cards | $45 | $12 | | Total Revenue | $639 | $64 | - Total revenues increased significantly by **$575 thousand** (**898%**) from **$64 thousand** in Q1 2023 to **$639 thousand** in Q1 2024, primarily driven by **$569 thousand** in wholesale telecommunication services[118](index=118&type=chunk) Gross Profit (Loss) Comparison (USD in thousands) | Product | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Telecommunications | $14 | $(7) | | Wholesale telecommunication services | $4 | $0 | | Digital products and General Purpose Reloadable Cards | $(87) | $(52) | | Total Gross profit (loss) | $(69) | $(59) | - Gross loss increased slightly from **$(59) thousand** in Q1 2023 to **$(69) thousand** in Q1 2024. The digital product and GPR cards segment experienced a gross loss margin of **65%** in Q1 2024 due to lower margins[123](index=123&type=chunk)[124](index=124&type=chunk) Selling, General and Administrative Expenses (USD in thousands) | Expense Category | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :-------------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Officers compensation | $152 | $227 | | Share-based compensation | $121 | $283 | | Professional services | $149 | $258 | | Maintenance and support services | $0 | $120 | | Selling and Marketing | $18 | $142 | | Total Selling, General and Administrative Expenses | $772 | $1,625 | - Selling, General and Administrative expenses decreased by **$853 thousand** (**52%**) from **$1,625 thousand** in Q1 2023 to **$772 thousand** in Q1 2024, mainly due to reductions in officer compensation, share-based compensation, maintenance, professional services, and marketing expenses[126](index=126&type=chunk) - Other income (expenses) shifted from **$0** in Q1 2023 to an income of **$398 thousand** in Q1 2024, primarily due to a **$491 thousand** gain from the change in fair value of derivative warrants liability[130](index=130&type=chunk)[131](index=131&type=chunk) - Net loss significantly decreased from **$1,695 thousand** in Q1 2023 to **$445 thousand** in Q1 2024, attributed to the decrease in selling and general administrative expenses and the gain from derivative warrants[132](index=132&type=chunk) [Liquidity and Capital Resources](index=21&type=section&id=Liquidity%20and%20Capital%20Resources) This subsection discusses the Company's ability to meet its short-term and long-term financial obligations and its capital management strategies Liquidity Position (USD in thousands) | Item | March 31, 2024 | March 31, 2023 | | :------------------------ | :------------- | :------------- | | Total Current Assets | $492 | $1,760 | | Total Current Liabilities | $3,741 | $4,689 | | Working Capital Deficit | $(3,249) | $(2,929) | | Cash and Cash Equivalents | $28 | $205 | - The Company's working capital deficit increased from **$(2,929) thousand** at March 31, 2023, to **$(3,249) thousand** at March 31, 2024, primarily due to negative cash flow from operations, partially offset by financing activities[136](index=136&type=chunk) - Net cash used in operating activities was **$310 thousand** in Q1 2024, an improvement from **$1,453 thousand** in Q1 2023. Net cash provided by financing activities was **$133 thousand** in Q1 2024, mainly from short-term loans, a decrease from **$4,315 thousand** in Q1 2023[139](index=139&type=chunk)[140](index=140&type=chunk)[142](index=142&type=chunk) - The Company continues to face substantial doubt about its ability to continue as a going concern, with plans to secure additional financing and utilize proceeds from the **Brooksville Property** sale for working capital[137](index=137&type=chunk)[143](index=143&type=chunk) [Critical Accounting Policies](index=23&type=section&id=Critical%20Accounting%20Policies) Management's assumptions and judgments are crucial for financial statement preparation, with significant policies detailed in the 2022 Form 10-K - The preparation of financial statements requires management to make assumptions, estimates, and judgments affecting reported amounts. Significant accounting policies are described in Note 2 to the consolidated audited financial statements in the Company's 2022 Form 10-K[17](index=17&type=chunk) [Recently Issued Accounting Standards](index=23&type=section&id=Recently%20Issued%20Accounting%20Standards) New accounting pronouncements are not expected to materially impact the Company's consolidated financial statements upon adoption - New pronouncements issued but not effective as of March 31, 2024, are not expected to materially impact the Company's consolidated financial statements[18](index=18&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.](index=23&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK.) As a smaller reporting company, Cuentas, Inc. is exempt from market risk disclosures - As a smaller reporting company, the Company is exempt from providing quantitative and qualitative disclosures about market risk[19](index=19&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES.](index=23&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES.) This section evaluates the effectiveness of disclosure controls and procedures and reports on changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=23&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This subsection assesses the effectiveness of the Company's disclosure controls and procedures - The Company's CEO and CFO concluded that disclosure controls and procedures were not effective as of March 31, 2024, to ensure timely accumulation and communication of required information to management for disclosure decisions[21](index=21&type=chunk)[22](index=22&type=chunk) [Changes in Internal Control over Financial Reporting](index=23&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This subsection reports on any material changes in the Company's internal control over financial reporting - There were no changes in the Company's internal control over financial reporting during the three-month period ended March 31, 2024, that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[23](index=23&type=chunk)