Cuentas(CUEN) - 2024 Q3 - Quarterly Report

Revenue and Financial Performance - Revenue for the nine months ended September 30, 2024, totaled $676,000, a decrease from $1,000,000 for the same period in 2023, primarily due to a $569,000 decline in wholesale telecommunication services[92] - Revenue for the three months ended September 30, 2024, was $4,000, a significant decrease from $895,000 for the same period in 2023, primarily due to reduced sales of digital products[104] - The company incurred a net loss of $2,916,000 for the nine-month period ended September 30, 2024, an improvement from a net loss of $4,270,000 for the same period in 2023[103] Cost and Expenses - Cost of revenues for the nine months ended September 30, 2024, was $760,000, down from $1,247,000 in the same period in 2023[94] - Cost of revenues for the three months ended September 30, 2024, was $11,000, compared to $971,000 for the same period in 2023[106] - Selling, general and administrative expenses totaled $1,542,000 for the nine months ended September 30, 2024, a decrease of $1,957,000, or 56%, compared to $3,499,000 for the same period in 2023[99] - Operating expenses decreased to $1,561,000 for the nine months ended September 30, 2024, from $3,512,000 in the same period in 2023, representing a net decrease of $1,951,000[98] - Operating expenses for the three months ended September 30, 2024, totaled $299,000, a decrease of $805,000, or 73%, from $1,104,000 for the same period in 2023[109] Assets and Liabilities - As of September 30, 2024, the company had total current assets of $1,197,000 and total current liabilities of $3,897,000, resulting in a working capital deficit of $2,700,000[117] - The company had approximately $15,000 in cash and cash equivalents and an accumulated deficit of approximately $57,862,000 as of September 30, 2024, raising substantial doubt about its ability to continue as a going concern[118] Other Income and Investments - The company recognized a $475,000 credit from InComm as other income in Q3 2024 following the termination of the processing agreement[81] - Cuentas has made equity investments in real estate projects in Florida, aiming to provide affordable housing alternatives to underserved communities[83] - The company acquired 19.99% of the membership interests of Cuentas SDI, LLC for a purchase price of $215,500, with payments totaling $108,000 made by OLB Group, Inc.[124] Strategic Focus and Market - The company is focusing on integrating FinTech, e-finance, and e-commerce services to deliver mobile financial services to unbanked and underbanked populations[80] - The Hispanic Latino population in the U.S. is over 62 million, representing a significant target market for the company's financial services[91] - Cuentas-SDI's convenience store distribution network includes over 31,000 locations, enhancing the company's digital distribution capabilities[85] Management and Accounting - Management believes that inflation and seasonality have not materially affected operational results and do not expect future material impacts from these factors[125] - The preparation of financial statements requires management to make assumptions and estimates that affect reported amounts, as detailed in the Company's Annual Report for the fiscal year ended December 31, 2022[127] - Recently issued accounting standards are not expected to have a material impact on the Company's consolidated financial statements[128] - As a smaller reporting company, the Company is not required to provide quantitative and qualitative disclosures about market risk[129] Financing Activities - Net cash used in operating activities for the nine months ended September 30, 2024, was $592,000, compared to $3,201,000 for the same period in 2023[119] - The company's financing activities for the three months ended September 30, 2024, resulted in net cash received of $321,000, primarily from short-term loans[122] Off-Balance Sheet Arrangements - As of September 30, 2024, the Company had no off-balance sheet arrangements[126] Significant Transactions - The Company signed a Membership Interest Purchase Agreement for the sale of its full interests in Brooksville for a total consideration of $800 million, closing on May 27, 2025[123]