Cuentas(US:CUEN)2025-07-02 13:38Revenue 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]