Core Insights - Cuentas, Inc. reported a remarkable 898% year-over-year increase in sales for Q1 2024, showcasing the effectiveness of its innovative strategies in fintech and telecommunications [2][7] - The company is finalizing the sale of its Brooksville, Florida property for $7.2 million, which is expected to enhance liquidity and support future investments [3] - Cuentas has signed a Letter of Intent to acquire shares in Sekur Private Data Ltd., aiming to integrate its products into Cuentas Mobile services [4] Financial Performance - Revenues for Q1 2024 reached $639,000, a significant increase from $64,000 in Q1 2023, reflecting a growth of 898% [7] - The cost of revenues for the same period totaled $708,000, up from $123,000 in the previous year, with telecom platform costs and digital product purchases accounting for the majority [8] - The gross profit margin for the telecommunications segment was 48%, while the digital product segment faced a gross loss margin of 65%, leading to an overall gross loss margin of 11% [9] Operating Expenses and Net Loss - Operating expenses decreased significantly to $774,000 in Q1 2024 from $1,627,000 in the same period in 2023 [10] - Selling, general, and administrative expenses were reduced by 52%, totaling $772,000 compared to $1,625,000 in Q1 2023 [11] - The net loss for Q1 2024 was $445,000, a substantial improvement from a net loss of $1,695,000 in the same period last year [12] Asset Position - As of March 31, 2024, total current assets amounted to $492,000, including cash of $28,000 and accounts receivable of $290,000 [13]

[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)

PART I [ITEM 1. BUSINESS](index=5&type=section&id=ITEM%201.%20BUSINESS) Cuentas, Inc. offers FinTech, e-finance, and e-commerce services to underserved communities, focusing on mobile financial and prepaid debit. - Cuentas' core business is **FinTech, e-finance, and e-commerce services**, providing mobile financial services, prepaid debit, and digital content to underserved populations in the USA, focusing on the Latin American market[666](index=666&type=chunk)[448](index=448&type=chunk) - In 2023, the company made two equity investments in Florida real estate projects to provide affordable housing and introduce fintech solutions to Hispanic Latino and immigrant communities[82](index=82&type=chunk)[253](index=253&type=chunk) - Cuentas is transitioning to a **new U.S. issuing bank** for its Prepaid Financial products in 2024[90](index=90&type=chunk)[669](index=669&type=chunk) - The company completed a **1-for-13 reverse stock split** on March 24, 2023, but was delisted from Nasdaq on December 20, 2023, due to non-compliance with shareholders' equity requirements[115](index=115&type=chunk)[145](index=145&type=chunk)[451](index=451&type=chunk)[450](index=450&type=chunk) [ITEM 1A. RISK FACTORS](index=12&type=section&id=ITEM%201A.%20RISK%20FACTORS) Significant risks include going concern doubt from recurring losses, operational challenges, increasing regulatory compliance costs, intense competition, and investment-related risks like stock price volatility. - The 2023 auditors' report expresses **substantial doubt about going concern** due to lack of liquidity, an accumulated deficit of approximately **$55 million**, and negative working capital of approximately **$3 million**[148](index=148&type=chunk)[175](index=175&type=chunk)[309](index=309&type=chunk)[435](index=435&type=chunk) - **Material weaknesses** in disclosure controls and internal control over financial reporting include inadequate segregation of duties, insufficient review, and weak IT controls over revenue[159](index=159&type=chunk)[184](index=184&type=chunk)[316](index=316&type=chunk) - The company operates in a complex regulatory environment, subject to various federal and state laws, with **anticipated increases in compliance costs**[74](index=74&type=chunk)[75](index=75&type=chunk)[97](index=97&type=chunk)[127](index=127&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk)[193](index=193&type=chunk)[217](index=217&type=chunk)[219](index=219&type=chunk)[220](index=220&type=chunk)[221](index=221&type=chunk) - The company faces **intense competition** from larger, well-financed entities in both e-commerce card operations and telecommunications[103](index=103&type=chunk)[104](index=104&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk)[225](index=225&type=chunk)[226](index=226&type=chunk) - The common stock is subject to **'penny stock' rules** (price less than **$5.00**), potentially reducing trading activity[206](index=206&type=chunk)[234](index=234&type=chunk)[270](index=270&type=chunk)[547](index=547&type=chunk) [ITEM 1B. UNRESOLVED STAFF COMMENTS](index=23&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) No unresolved staff comments were reported. - No unresolved staff comments were reported[238](index=238&type=chunk) [ITEM 1C. CYBERSECURITY](index=27&type=section&id=ITEM%201C.%20CYBERSECURITY) Cuentas manages cybersecurity risks with a comprehensive strategy, including risk assessments and an incident response plan, with no material incidents reported to date. - The company employs a **comprehensive cybersecurity risk management strategy**, including risk assessments, security controls, and an incident response plan[208](index=208&type=chunk)[209](index=209&type=chunk)[237](index=237&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk) - No cybersecurity incidents have **materially affected** the company's business, operations, or financial condition to date[210](index=210&type=chunk) [ITEM 2. PROPERTIES](index=27&type=section&id=ITEM%202.%20PROPERTIES) Cuentas leases its principal office in Miami Beach, FL, deeming it adequate for current needs but anticipating future expansion. - The company leases its principal office space in Miami Beach, FL, and believes current facilities are **adequate but may need to expand**[262](index=262&type=chunk) [ITEM 3. LEGAL PROCEEDINGS](index=28&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) Cuentas is involved in legal proceedings, including an arbitration with Secure IP Telecom (accrued **$300,000**), a settled breach of contract for **$630,000**, and a former employee's claim for up to **$30,000**. - The company is a defendant in a lawsuit by Secure IP Telecom, Inc., with a **$300,000 accrual** as of December 31, 2023, for a reasonably possible loss contingency[240](index=240&type=chunk)[597](index=597&type=chunk) - A breach of contract complaint was **settled for $630,000**, with **$145,000 paid** as of December 31, 2023[264](index=264&type=chunk)[599](index=599&type=chunk) - A former employee filed a complaint for breach of employment agreement, with an estimated maximum payment of **$30,000**[241](index=241&type=chunk)[627](index=627&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=24&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company. - This item is not applicable to the company[242](index=242&type=chunk) PART II [ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER](index=29&type=section&id=ITEM%205.%20MARKET%20FOR%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20SMALL%20BUSINESS%20ISSUER) Cuentas' common stock and warrants were delisted from Nasdaq, now trading on OTC Markets, with no expected dividends and subject to 'penny stock' regulations. - Cuentas' common stock and publicly-traded warrants were **delisted from Nasdaq** on December 20, 2023, and now trade on the Pink Current Information tier of OTC Markets[244](index=244&type=chunk)[172](index=172&type=chunk) - As of March 31, 2024, there were approximately **130 record holders** for common stock and **three for publicly-traded warrants**[245](index=245&type=chunk) - The company does not expect to pay **cash dividends** on its common stock for the foreseeable future, intending to reinvest earnings[246](index=246&type=chunk)[259](index=259&type=chunk) Securities Authorized for Issuance under Equity Compensation Plans (as of December 31, 2023) | Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) | |:--------------|:------------------------------------------------------------------------------------------|:--------------------------------------------------------------------------------|:--------------------------------------------------------------------------------------------------------------------------------------| | Approved by Security Holders | 84,999 | 36.97 | 678,847 | | Not Approved by Security Holders | - | - | - | | **Total** | **84,999** | **36.97** | **678,847** | - The company's common stock is classified as a **'penny stock'** (market price less than **$5.00**), which may reduce trading activity[270](index=270&type=chunk)[234](index=234&type=chunk)[547](index=547&type=chunk) [ITEM 6. [RESERVED]](index=32&type=section&id=ITEM%206.%20%5BRESERVED%5D) This item is reserved and contains no information. [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=32&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Cuentas' revenue decreased in 2023, but net loss significantly reduced due to derivative warrant gains, though liquidity remains a concern with negative working capital and going concern doubt. - The company's business strategy involves **financial technology, telecommunications, and real estate investments**, aiming to provide affordable solutions to underserved communities[273](index=273&type

25 The success of our equity investments in real estate projects in Florida will depend upon the ability of the real estate developers, contractors, property managers and operators to develop, construct, manage and operate those projects and other factors beyond our control. We own a minority equity interest in certain real estate development projects in Florida. The success of those projects will depends upon ability of the real estate developers, contractors, property managers and operators to develop, co ...

F-12 NOTE 6 – SEGMENTS OF OPERATIONS Revenue by product for the six months ended June 30, 2023, and the six months ended June 30, 2022 are as follows: Gross profit (loss) by product for the six months ended June 30, 2023, and the six months ended June 30, 2022 are as follows: | --- | --- | --- | --- | --- | |-------------------------------------------------------------------|-------|----------------------------------------|---------------------------|----------------| | Telecommunications | $ | June 30, 202 ...

As filed with the Securities and Exchange Commission on July 31, 2023 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 CUENTAS INC. (Exact name of registrant as specified in its charter) (State or Other Jurisdiction of Incorporation or Organization) Florida 5140 20-3537265 (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification No.) 235 Lincoln Rd., Suite 210 Miami Beach, Florida 33139 (8 ...

PART I – FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) For the first quarter of 2023, Cuentas, Inc. reported a significant decrease in revenue to $64,000 from $394,000 year-over-year, resulting in a net loss of $1.7 million, but its financial position strengthened due to a successful financing round, increasing total assets to $5.2 million from $1.5 million and turning stockholders' equity positive from a deficit of $0.7 million to $2.9 million [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2023, total assets grew substantially to **$5.19 million** from **$1.50 million** at year-end 2022, primarily fueled by a rise in cash and cash equivalents to **$3.33 million**, while total liabilities remained relatively stable at **$2.31 million**, leading to a significant turnaround in stockholders' equity from a deficit of **$724 thousand** to a positive balance of **$2.88 million** Condensed Consolidated Balance Sheets | Financial Metric | March 31, 2023 (Unaudited) | December 31, 2022 (Audited) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $3,328 thousand | $466 thousand | | Total current assets | $3,689 thousand | $689 thousand | | Total assets | $5,189 thousand | $1,499 thousand | | **Liabilities & Equity** | | | | Total current liabilities | $2,221 thousand | $2,134 thousand | | Total liabilities | $2,310 thousand | $2,223 thousand | | Total stockholders' equity | $2,879 thousand | ($724) thousand | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) In the first quarter of 2023, revenue plummeted to **$64 thousand** from **$394 thousand** in the same period of 2022, resulting in a gross loss of **$59 thousand**, but operating expenses were significantly reduced to **$1.63 million** from **$3.74 million**, leading to a net loss of **$1.70 million**, or **($1.00)** per share, an improvement compared to the net loss of **$3.62 million**, or **($3.15)** per share, in Q1 2022 Condensed Consolidated Statements of Operations | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Revenue | $64 thousand | $394 thousand | | Gross Profit (Loss) | ($59) thousand | $134 thousand | | Operating Expenses | $1,627 thousand | $3,742 thousand | | Operating Loss | ($1,686) thousand | ($3,608) thousand | | Net Loss | ($1,695) thousand | ($3,624) thousand | | Net loss per basic and diluted share | ($1.00) | ($3.15) | [Statements of Changes in Shareholders' Equity](index=6&type=section&id=Statements%20of%20Changes%20in%20Shareholders'%20Equity) Shareholders' equity underwent a significant positive change during the first quarter of 2023, increasing from a deficit of **$724 thousand** at the end of 2022 to a positive balance of **$2.88 million**, primarily driven by the issuance of common stock, which added **$4.32 million** to additional paid-in capital, and another **$700 thousand** from shares issued for an asset acquisition, partially offset by the net loss of **$1.70 million** for the period - The company's total stockholders' equity increased from a deficit of **$(724) thousand** at the end of 2022 to a positive **$2,879 thousand** as of March 31, 2023[14](index=14&type=chunk) - The primary drivers for the equity increase were the issuance of common stock for net proceeds of **$4,319 thousand** and shares issued for an asset acquisition valued at **$700 thousand**[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the three months ended March 31, 2023, net cash used in operating activities was **$1.45 million**, with no cash flow from investing activities, but a significant inflow of **$4.32 million** was generated from financing activities, primarily from the net proceeds of a common stock issuance, resulting in a net increase in cash of **$2.86 million**, bringing the quarter-end cash balance to **$3.33 million** Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net Cash Used by Operating Activities | ($1,453) thousand | ($2,225) thousand | | Net Cash used for Investing Activities | $0 | ($47) thousand | | Net Cash Provided by Financing Activities | $4,315 thousand | $0 | | **Net Increase (Decrease) in Cash** | **$2,862 thousand** | **($2,272) thousand** | | **Cash at End of Period** | **$3,328 thousand** | **$4,335 thousand** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes reveal a strategic expansion from fintech services into the real estate market, with key corporate actions including a **1-for-13 reverse stock split** to regain Nasdaq compliance and a securities offering that raised approximately **$4.3 million** in net proceeds, alongside new investments in real estate projects, while a 'going concern' warning indicates dependence on raising additional capital and generating revenue - The company is expanding its focus from fintech services to include investments in the real estate market, aiming to provide affordable rental apartments[19](index=19&type=chunk) - On March 24, 2023, the company executed a **1-for-13 reverse stock split** to regain compliance with Nasdaq's minimum bid price requirement[25](index=25&type=chunk) - In February 2023, the company raised approximately **$4.3 million** in net proceeds through a registered direct offering and concurrent private placement[27](index=27&type=chunk) - The financial statements were prepared under the assumption of a 'going concern', but the company's history of losses and accumulated deficit of **$54.4 million** raise substantial doubt about its ability to continue without additional financing[26](index=26&type=chunk) Revenue by Product Segment | Product Segment | Revenue Q1 2023 | Revenue Q1 2022 | | :--- | :--- | :--- | | Telecommunications | $49 thousand | $175 thousand | | Digital products and GPR Cards | $15 thousand | $219 thousand | | **Total revenue** | **$64 thousand** | **$394 thousand** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=19&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20AND%20RESULTS%20OF%20OPERATIONS) Management attributes the sharp decline in Q1 2023 revenue to a reduction in activities within its telecommunications segment and with its partner, Cuentas SDI, but the net loss narrowed to **$1.7 million** from **$3.6 million** year-over-year due to a significant decrease in operating expenses, particularly in selling, marketing, and amortization, while highlighting a strategic pivot towards real estate investments and markedly improved liquidity following a February 2023 financing that raised **$4.3 million**, resulting in a positive working capital of **$1.47 million** - The company has initiated investments into the real estate market to broaden its reach to underserved communities by providing reasonably priced rental apartments[61](index=61&type=chunk)[67](index=67&type=chunk) - In April 2023, the company acquired a **21.8-acre site** via its majority-owned entity, Brooksville Development Partners, LLC, for the development of a **360-apartment community**[65](index=65&type=chunk)[66](index=66&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Revenue for Q1 2023 was **$64 thousand**, a significant decrease from **$394 thousand** in Q1 2022, due to reduced sales in both telecommunications and digital products/GPR cards segments, resulting in a gross loss of **$59 thousand**, but total operating expenses were slashed to **$1.69 million** from **$3.74 million**, driven by lower selling and marketing costs and a sharp drop in amortization expense, leading to a reduced net loss of **$1.7 million** compared to **$3.6 million** in the prior-year quarter Revenue by Source | Revenue Source | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Telecommunications | $49,000 | $175,000 | | Digital products and GPR Cards | $15,000 | $219,000 | | **Total Revenue** | **$64,000** | **$394,000** | - The decrease in revenue is attributed to reducing cooperation with Cuentas SDI and scaling back activities in the telecommunications segment[72](index=72&type=chunk) - Selling, general and administrative expenses decreased to **$1.69 million** in Q1 2023 from **$3.29 million** in Q1 2022, mainly due to significant reductions in selling and marketing expenses, share-based compensation, and the cancellation of the D&O insurance policy[79](index=79&type=chunk) - Amortization of intangible assets dropped to **$2 thousand** from **$453 thousand** YoY because the related software license asset was fully impaired in the fourth quarter of 2022[80](index=80&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity position improved dramatically in Q1 2023, with working capital shifting from a deficit of **$1.45 million** at the end of 2022 to a surplus of **$1.47 million** as of March 31, 2023, primarily due to a financing activity that provided **$4.32 million** in net cash, boosting the cash balance to **$3.33 million**, while net cash used in operations was **$1.45 million**, and management plans to seek additional financing to support its business strategy, including new real estate projects Working Capital Analysis | Metric | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total current assets | $3,689,000 | $689,000 | | Total current liabilities | $2,221,000 | $2,134,000 | | **Working Capital** | **$1,468,000** | **($1,445,000)** | - The increase in working capital was mainly attributable to an increase in cash of **$2,862,000** resulting from the sale of shares[84](index=84&type=chunk) - Net cash used in operating activities was **$1,453,000** for the quarter[86](index=86&type=chunk) - Net cash provided by financing activities was **$4,315,000**, consisting of proceeds from the sale of common stock[89](index=89&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=27&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company discloses several ongoing legal matters, including a demand for arbitration from Secure IP Telecom related to a former subsidiary, for which **$300,000** has been accrued, a breach of contract complaint from Crosshair Media Placement, claiming damages of approximately **$630,000**, which was settled with a one-year payment plan, and a complaint for breach of an employment agreement, for which **$35,000** has been accrued - The company has accrued **$300,000** related to a legal proceeding with Secure IP Telecom concerning alleged avoidable transfers from its former subsidiary, Limecom[100](index=100&type=chunk) - A breach of contract case with Crosshair Media Placement for approximately **$630,000** was settled, with the amount to be paid over a one-year period[101](index=101&type=chunk) - The company accrued **$35,000** for a breach of contract complaint related to an employment agreement[102](index=102&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=28&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) In Q1 2023, the company engaged in several equity transactions, issuing **295,282 common shares**, valued at **$700,000**, to acquire a **6% equity interest** in Lakewood Manager as part of its real estate strategy, and also raised approximately **$5 million** in gross proceeds through a securities offering that included common stock, pre-funded warrants, and purchase warrants, with other issuances including **15,385 shares** for a settlement agreement and **27,759 shares** for a service agreement - On February 3, 2023, the company issued **295,282 common shares** valued at **$700,000** to acquire a **6% equity stake** in the Lakewood Manager real estate project[105](index=105&type=chunk) - On February 6, 2023, the company raised approximately **$5 million** in gross proceeds from an institutional investor through the sale of shares, pre-funded warrants, and purchase warrants[106](index=106&type=chunk) - In March 2023, the company issued **15,385 shares** for a settlement agreement (valued at **~$120,000**) and **27,759 shares** for a service agreement (valued at **~$136,000**)[107](index=107&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 333-148987 CUENTAS, INC. (Exact name of Registrant as specified in its charter) | Florida | 20-3537265 | | --- | --- | | (State or Other Jurisdiction of | (I.R.S. Employer | | Incorpor ...

Revenue Growth - Revenue for the nine months ended September 30, 2022, totaled $2,207,000, a significant increase from $489,000 for the same period in 2021, reflecting a growth of approximately 351%[90] - Sales of digital products and General-Purpose Reloadable Cards contributed $1,723,000 to revenue in the nine months ended September 30, 2022, compared to $49,000 in the same period of 2021[91] - Revenue for the three months ended September 30, 2022, was $1,143,000, a significant increase from $109,000 in the same period of 2021, representing a growth of 949.5%[102] Cost and Profitability - Cost of revenues for the nine months ended September 30, 2022, was $1,902,000, up from $361,000 in the prior year, indicating a rise of approximately 426%[92] - Gross profit for the nine months ended September 30, 2022, was $305,000, compared to $128,000 for the same period in 2021, representing an increase of approximately 138%[94] - Gross profit for the three months ended September 30, 2022, was $116,000, compared to a gross loss of $18,000 in the same period of 2021, marking a turnaround in profitability[107] Operating Expenses - Operating expenses totaled $9,320,000 for the nine months ended September 30, 2022, an increase of 51.7% from $6,144,000 for the same period in 2021[96] - Selling, general and administrative expenses increased to $7,962,000 for the nine months ended September 30, 2022, up 66.4% from $4,787,000 in 2021[97] Net Loss - The company incurred a net loss of $9,085,000 for the nine months ended September 30, 2022, compared to a net loss of $6,082,000 for the same period in 2021, reflecting a 49.4% increase in losses[101] Assets and Liabilities - As of September 30, 2022, the company had total current assets of $2,429,000 and total current liabilities of $2,720,000, resulting in a working capital deficit of $291,000[116] Cash Flow - The company reported cash used in operating activities of $6,523,000 for the nine months ended September 30, 2022, compared to $7,227,000 for the same period in 2021, showing a decrease in cash burn[121] - Financing activities generated net cash of $2,688,000 from the sale of common stock for the nine months ended September 30, 2022, compared to $15,797,000 in the same period of 2021[124] Accumulated Deficit - The accumulated deficit as of September 30, 2022, was approximately $47,304,000, raising substantial doubt about the company's ability to continue as a going concern[119] Strategic Initiatives - The Company has entered into a Membership Interest Purchase Agreement to acquire 19.99% of Cuentas SDI for $750,000, with an option to acquire the remaining 80.01% for an additional $2,459,000[82] - A Marketing Agreement was established with LSI Group to market Cuentas Prepaid Debit Card and Mobile App, aiming to sign 200,000 customers in one year for international remittances[84] - The Company is focused on providing digital and mobile payment solutions for underbanked individuals, enhancing accessibility and security in financial services[86] - Cuentas is strategically aligned with a major digital gift card provider in the USA, anticipating increased demand for digital offerings[88] - The Company is actively monitoring regulatory changes in the payments industry to ensure compliance and mitigate risks associated with non-compliance[87] Accounting Standards - Recently issued accounting standards are not expected to have a material impact on the Company's consolidated financial statements[129] - The Company is not required to provide quantitative and qualitative disclosures about market risk as a smaller reporting company[130]

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 THREE MONTH PERIOD ENDED: JUNE 30, 2022 ☐ 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) | --- | --- | ...