Cuentas Inc 10-K for FY2024
Cuentas Inc. (CUEN)
About this 10-K
Cuentas Inc filed this 10-K on November 19, 2025, covering the fiscal year ended December 31, 2024 (FY2024).
Headline figures
Fiscal year ended December 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $676K
- down 71.2% from $2.35M a year earlier
- Net loss
- $3.31M
- compared with a net loss of $2.2M a year earlier
- Diluted EPS
- -$1.22
- compared with -$0.95 a year earlier
UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
For the fiscal year ended
For the transition period from _______________ to _______________
Commission File Number:
(Exact name of Registrant as specified in its charter)
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices)
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Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 par value
Warrants
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well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
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is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of June 30, 2024, the last day of the registrant’s most recently
completed second fiscal quarter, the aggregate market value of the common stock held by non-affiliates was $
The number of shares of Common Stock, $0.001 par value, outstanding
on March 29, 2025 was
TABLE OF CONTENTS
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SPECIAL NOTE
As used in this Annual Report on Form 10-K (the “Annual Report”), unless the context otherwise requires, the terms “the Company,” “Cuentas,” “we,” “us,” and “our” refer to Cuentas Inc., a Florida corporation.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report includes forward-looking statements as the term is defined in the Private Securities Litigation Reform Act of 1995 or by the U.S. Securities and Exchange Commission in its rules, regulations and releases, regarding, among other things, all statements other than statements of historical facts contained in this report, including statements regarding our future financial position, business strategy, and plans and objectives of management for future operations. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. In addition, our past results of operations do not necessarily indicate our future results.
These statements include, among other things, statements regarding:
| ● | our ability to implement our business plan; |
| ● | our ability to attract key personnel; |
| ● | our ability to operate profitably; |
| ● | our ability to efficiently and effectively finance our operations; |
| ● | our ability to raise additional financing for working capital; |
| ● | our ability to efficiently manage our operations; |
| ● | that our accounting policies and methods may require management to make estimates about matters that are inherently uncertain; |
| ● | changes in the legal, regulatory and legislative environments in the markets in which we operate; and |
| ● | adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations. |
Except as otherwise required by applicable laws and regulations, we undertake no obligation to publicly update or revise any forward-looking statements or the risk factors described in this report, whether as a result of new information, future events, or changed circumstances after the date of this report. You should not rely upon forward-looking statements as predictions of future events or performance. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. No forward-looking statement is a guarantee of future performance. You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission (the SEC) thereto completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements.
The Company maintains a website at www.cuentas.com. The Company makes available, free of charge, through the Investor Information section of the website, its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Section 16 filings and all amendments to those reports, as soon as reasonably practicable after such material is electronically filed with the Securities and Exchange Commission. Any of the foregoing information is available in print to any stockholder who requests it by contacting our Investor Relations Department. Alternatively, you may also access our reports at the SEC’s website at www.sec.gov.
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PART I
ITEM 1. BUSINESS
Our Business
Our business is mainly focused on using proprietary technologies to integrate FinTech (Financial Technology), e-finance and e-commerce services into solutions that deliver mobile financial services, prepaid debit and digital content services to the unbanked, under-banked and underserved populations nationally in the USA. The Cuentas technology platform integrates Cuentas Mobile, the Company’s Telecommunications solution, with its core financial services offerings to help entire communities enter the modern financial marketplace. Prior to the August 12, 2024, termination discussed below, Our General Purpose Reloadable (GPR) “Debit Card” is designed to allow customers to purchase prepaid products and services, including third party digital content, gift cards, remittances, mobile phone topups and other digital services. An agreement with Interactive Communications International, Inc. (“InComm”) a leading stored-value and digital-content network, enables us to market and distribute a line of prepaid digital content and gift cards targeted towards the Latin American market. Cuentas is able to purchase InComm’s prepaid digital content and gift cards at a discount and resell these same products in real time through the Black 011 portal and the Cuentas SDI network of over 31,000 bodegas. Cuentas is able to offer these digital products to the public, many at discounted prices, while making a small profit margin which varies from product to product. The prepaid digital content and gift cards include Amazon Cash, XBox, PlayStation, Nintendo, Karma Koin, Transit System Loads & Reloads (LA TAP, NY Transit, Grand Rapids, CT GO), Burger King, Cabela’s, Bass Pro Shops, AT&T, Verizon, Mango Mobile, Black Wireless and other prepaid wireless carriers in the United States.
On August 12 2024, the Company and InComm mutually agreed to sunset the processing agreement that supported the Cuentas Prepaid Mastercard® program. In connection with the wind-down, InComm issued a $475,000 credit to Cuentas in full and final settlement of all obligations under the processing agreement. The Company recognized the credit as other income in the third quarter of 2024. No further liabilities remain outstanding, and all prepaid card accounts were deactivated on or before that date.
The Company continues to maintain and develop its long-standing InComm Resale Agreement, under which it supplies digital content, transit reloads, mobile top-ups, bodega access and cellular offerings to its target market. Accordingly, while the Company has exited the prepaid debit-card vertical, it remains fully engaged in the FinTech sector and leverages InComm’s nationwide distribution network for higher-margin digital-content products.
Since the first quarter of 2023, we have made equity investments in real estate projects in Florida under the name Cuentas Casa. Cuentas Casa partnered with leading edge developers and construction technology companies to create sustainable, inclusive and affordable residential communities specifically designed to provide high quality housing alternatives at extremely competitive pricing. Due to liquidity issues impeding the operation and development of its core mobile fintech and carrier services, on April 3, 2025, the limited liability company in which Cuentas has a 63.9% equity interest (“Brooksville Development Partners, LLC” or “BDP”), entered into an agreement to sell the vacant land located in Brooksville, Florida (the “Brooksville Property”) The Brooksville Property was originally purchased by BDP on April 28, 2023 for $5.05 million, $2 million of which was contributed by Cuentas. On May 27, 2025, Cuentas sold its 63.9% equity interest in the Brooksville Property for $800,000 to Brooksville FL Partners, LLC (the “Buyer”), an existing minority member of BDP. The funds were distributed by a mutually agreed escrow agent, and Cuentas settled debts with 4 major creditors. The remaining funds are to be used for operating expenses. With these funds, the Company was able to settle debts totaling approx. $1.132M with 4 major creditors for final actual cost of $666,356 Cuentas is no longer in the real estate business.
Efforts to Upgrade our Technology Platforms and Increase Sales of our Fintech Products and Services Through Cuentas-SDI and Introduction of New Fintech Solutions
In April 2023, CIMA Telecom, which provided maintenance and support services for our fintech mobile app technology platform, shut down access to the platform as we were transitioning to a new, improved platform. The Cuentas prepaid Mastercard platform continued to be active and the associated prepaid fintech platform behind it continued to function properly until the termination of the InComm agreement in August 2024 as listed below.
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In May 2023, The OLB Group (NASDAQ: OLB) (“OLB”) terminated a Software Licensing and Transaction Sharing Agreement with the Company for the purpose of upgrading the Cuentas Mobile App and digital distribution system. In September 2023, OLB acquired 80.01% of Cuentas-SDI. In July 2023, the Company and Cuentas-SDI settled certain payment issues and have re-opened the digital distribution network and systems through Cuentas-SDI’s convenience store distribution network of over 31,000 locations, including many across the New York, New Jersey and Connecticut tri-state area. There were no longer locations in the second-half of 2024.
Cuentas has agreed with Sutton Bank to wind down its relationship during 2024. These activities were completed in August 2024 concurrent with the termination of the InComm processing agreement described above. On May 16, 2024, the Company received a Notice of Termination of Contract from Sutton Bank. Management has been evaluating other alternatives including replacing issuing bank and other enhanced FinTech enabled solutions However the company has not replaced it to date. On September 18, 2025, the Company granted a 16-month license to certain Fintech (non-MVNO) assets; those assets are held in escrow pending the holder’s option. MVNO assets are excluded.
Cuentas Prepaid Mastercard account holders were able to deposit funds to their account (until the August 12 2024 wind-down) via (a) no-cost Direct Deposit, or (b) for a small charge, using InComm’s VanillaLoad network in over 200,000 locations at major retailers like Walmart, CVS, Walgreens, Dollar General, and more. Cuentas does not have any pre paid debit cards since that date.
Account holders that had available funds could use their Cuentas Prepaid Mastercard® wherever prepaid Mastercards are accepted worldwide and at most ATMs in the U.S., and many international ATMs. Sutton Bank held the funds from cardholders in a bank account that Cuentas had no control nor access. Sutton allowed cardholders to withdraw funds and/or receive a check with available funds to close their accounts.
Cuentas e-commerce Distribution and Mobile Payments
The Cuentas e-commerce Distribution and Mobile Payments ecosystem allowed consumers to purchase Cuentas’s line of digital products and services through a nationwide network of retailers that specifically serve Cuentas’ target market. Cuentas’ distribution network includes certain neighborhood markets known as “Bodegas” and convenience stores as well as other retail establishments. This brings previously unavailable digital products and services to those neighborhoods affected by the e-commerce digital divide.
The Latino Market
The name “Cuentas” is a Spanish word that has multiple meanings and was chosen for strategic reasons, to develop a close relationship with the Spanish speaking population. It means “Accounts” as in “bank accounts” and it can also mean “You can count on me” as in “Cuentas conmigo”. Additionally, it can be used to “Pay or settle accounts” (saldar cuentas), “accountability” (rendición de cuentas), “to be accountable” (rendir cuentas) and other significant meanings.
The 2020 U.S. Census showed the Hispanic Latino population at over 62 million and at 18.7% of the total U.S. population. The FDIC defines the “unbanked” “as those adults without an account at a bank or other financial institution and are considered to be outside the mainstream for one reason or another. The Company believes that the Hispanic and Latino demographic generally have had more identification, credit, and former bank account issues than any other U.S. minority group leading to more difficulty in obtaining a traditional bank account.
The Cuentas Business Model
The Cuentas business model contemplates multiple revenue sources, many of which are synergistic market segments and provide unified financial and social functionality to forgotten segments of society.
The Cuentas Technology platform
Cuentas is engaged in negotiations with World Mobile Group Ltd (WMG) and expects to enter into a Management & Software Licensing Agreement related to WMG’s “Sharing Economy”, the world’s first decentralized telecom economy. World Mobile’s hybrid system works by letting local operators run small access nodes that connect people to the internet while larger backbone nodes handle authentication and routing, all tied together through a blockchain that tracks usage and pays the operators. World Mobile’s platform has been proven worldwide with capabilities for growth in the USA.
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Strategic Partners
Sutton Bank (“Sutton”)
Cuentas had a 5 year Prepaid Card Program Management Agreement with Sutton Bank as the issuer of the Cuentas Prepaid Mastercard® - Debit/GPR card which was effective through October 2026, but the parties have agreed to wind-down the Cuentas operation during 2024 as Cuentas terminates its processing agreement with InComm on August 12, 2024.
Cuentas SDI, LLC
Cuentas SDI, LLC ( “Cuentas-SDI”) was incorporated in the State of Florida on January 4, 2022 and was a wholly owned subsidiary of SDI Black 011, Inc. (“SDI Black”). Cuentas-SDI is engaged in the business of electronic distribution and sales of virtual products via its Black 011 portal located at Yonkers, NY. Its electronic products range from prepaid wireless SIM activation, International mobile recharge services and international long distance phone services. During 2020, Cuentas-SDI also started sales of general merchandise to its retail reseller customers. Cuentas-SDI owns the assets of Black Wireless MVNO, Black 011 Long distance platform and operations and the SDI Black distribution platform and network of over 31,000 bodegas and convenience stores.
On May 27, 2022, the Company entered into a Membership Interest Purchase Agreement with SDI Black, the holders of all the membership interests of SDI Black and Cuentas-SDI, for the acquisition of 19.99% of the membership interests of Cuentas-SDI in exchange for $750,000.
On May 20, 2024, the Company signed a Membership Interest Purchase Agreement (the“OLB-MIPA”) with The OLB Group, Inc., a Delaware corporation listed on the Nasdaq exchange to sell the 19.99% interest in SDI Cuentas for $215,500.
As a result of an evaluation of the acquired interest during the second quarter of 2023 and sale in 2024, the Company recorded an impairment charge of $0.5 million. There is no further participation between Cuentas-SDI and Cuentas.
Cuentas Mobile
Cuentas Mobile is our Mobile Virtual Network Operator (“MVNO”) trade name, which provided Cuentas Mobile branded mobile phones along with attractively priced prepaid voice, text, and data mobile phone services to a limited customer base. Cuentas, through M&M is negotiating to sell mobile services as an MVNO through an operator on the largest 5G nationwide network from one of the top 3 mobile carriers. Cuentas Mobile will continue to operate a virtual telecommunications network providing mobile voice, text, and data services with essentially the same quality as other MVNOs such as Cricket, Boost, Simple, Ultra, Mint, and Lyca Mobile which have been successful at creating brands, without owning the towers, hardware or network. Cuentas is currently reactivating distribution through grass roots retailers that normally interact with Cuentas’ target audience, specifically offering low-cost mobile phone service with the ability to make international calls to specific Spanish speaking countries in Central and South America.
3
We believe that our potential customers will migrate away from legacy telephone and banking systems to enhanced mobility solutions. The Company’s technological advantage and the synergies created by its combination of a reloadable debit card and a holder of mobile virtual network operator rights will make its products increasingly useful to unbanked, under-banked, under-served and other emerging niche markets.
Meimoun & Mammon LLC
Meimoun & Mammon LLC (“M&M”) is a retail provider of domestic and international long-distance voice, text, and data telephony services to consumers in the United States and throughout the world. M&M holds International and Domestic Section 214 authority issued by the FCC. M&M operated the retail Tel3 business as a separate division. Tel3 became unprofitable and was shut down in June 2024. M&M has no further operations but its FCC 214 Authority is active.
World Mobile Group Ltd
On September 3, 2024, the Company signed a Non Binding Letter of Intent (LOI) with World Mobile Group Ltd (“World Mobile”), a UK limited company to leverage the World Mobile sharing economy to expand network coverage and provide affordable connectivity.
World Mobile transferred $50,000 to Cuentas as a refundable Security Deposit upon signing thie LOI. This LOI serves as a preliminary expression of intent between World Mobile and Cuentas and is not legally binding, except where explicitly stated.
On April 21, 2025, the Company and World Mobile entered into a Contribution Agreement to form World Mobile LLC, a Delaware limited liability company (the “JV Company”), as a joint venture to operate a mobile virtual network operator (“MVNO”) business. The Company holds a 51% membership interest and World Mobile holds a 49% membership interest in the JV Company, with World Mobile’s appointee serving as the sole managing member. Profits, losses, and cash distributions of the JV Company are generally allocated 85% to World Mobile Group and 15% to the Company, except that for certain “Cuentas-related Brands,” such allocations are 85% to Cuentas and 15% to World Mobile Group. The Company contributed rights, title, and interest in its MVNO business (including the PLUM contract) to the JV Company, while World Mobile contributed $300,000 in capital.
On September 22, 2025, the Company entered into a Convertible Note Purchase Agreement with World Mobile Group Ltd. for $260,000 in the form of a convertible promissory note maturing on September 22, 2026. The Company agreed to use the proceeds to pay operational expenses.
On October 1, 2025, the Company entered into a second Convertible Note Purchase Agreement with World Mobile Group Ltd. for $125,000 in the form of a convertible promissory note maturing on October 1, 2026. The Company agreed to use the proceeds to satisfy obligations under the PLUM contract.
On April 23, 2025 and May 15, 2025, Cuentas executed related letter agreements confirming the assignment of its Reseller Master Services Agreement with UVNV, Inc. (d/b/a PLUM) to the JV Company and granting the Company management of certain Cuentas Mobile brands on the JV Company platform, with respective profit/loss sharing as noted above.
Regulatory Compliance
We operate in an ever-evolving and complex legal and regulatory environment. We, the products and services that we offer and market, and those for which we provide processing services, are subject to a variety of federal, state and foreign laws and regulations, including, but not limited to: federal communications laws and regulations; foreign jurisdiction communications laws and regulations; federal anti-money laundering laws and regulations, including the Patriot Act, the BSA, anti-terrorist financing laws and anti-bribery and corrupt practice laws and regulations in the U.S., and similar international laws and regulations, including the Proceeds of Crime (Money Laundering) and Terrorist Financing Act in Canada; state unclaimed property laws and money transmitter or similar licensing requirements; federal and state consumer protection laws, including the CARD Act, and the Dodd-Frank Act, and regulations relating to privacy and data security; and foreign jurisdiction payment services industry regulations.
Our subsidiary M&M is subject to regulation by the FCC and other government agencies and task forces. M&M holds International and Domestic Section 214 licenses issued by the FCC, which may be suspended or revoked by the FCC if M&M does not strictly comply with all applicable regulations and the terms and conditions under which the International and Domestic Section 214 licenses were issued. M&M is also subject to certain foreign jurisdiction communications laws and regulations as it provides limited access to its prepaid calling platform internationally. We believe that we, including our subsidiaries, are currently operating in compliance with all applicable laws and regulations, but there is no certainty that laws and regulations affecting our business will not change. Any such change of laws and regulations applicable to our business might adversely affect our ability to execute our business plan and achieve profitable operating results.
4
At the federal level, Congress and federal regulatory agencies have enacted and implemented new laws and regulations that affect the prepaid industry, such the CARD Act and FinCEN’s Prepaid Access Rule. Moreover, there are currently proposals before Congress that could further substantially change the way banks, including prepaid card issuing banks and other financial services companies, are regulated and are permitted to offer their products to consumers. Non-bank financial services companies, including money transmitters and prepaid access providers, are now regulated at the federal level by the Consumer Financial Protection Bureau (the “CFPB”), which began operations in July 2011, bringing additional uncertainty to the regulatory system and its impact on our business. We are increasingly facing more stringent anti-money laundering rules and regulations, compliance with which may increase our costs of operation, decrease our operating revenues and disrupt our business. Sutton bank performs routine AML, KYC, OFAC in consultation with Cuentas and IDology and other compliance review and searches throughout Cuentas’ registration and operational processes. Abuse of our prepaid products for purposes of financing sanctioned countries, terrorist funding, bribery or corruption could cause reputational or other harm that could have a material adverse effect on our business, results of operations and financial condition. Failure to comply with, or further expansion of, consumer protection regulations could have a material adverse effect on our business, results of operations and financial condition. Failure by us to comply with federal banking regulation may subject us to fines and penalties and our relationships with our issuing banks may be harmed.
Most states regulate the business of sellers of traveler’s checks, money orders, drafts and other monetary instruments, which we refer to collectively as money transmitters. While many states expressly exempt banks and their agents from regulation as money transmitters, others purport to regulate the money transmittal businesses of bank agents or do not extend exemptions to non-branch bank agents. In those states where we are required to be licensed, we are subject to direct supervision and regulation by the relevant state banking departments or similar agencies charged with enforcement of the money transmitter statutes and must comply with various restrictions and requirements, such as those related to the maintenance of certain levels of net worth, surety bonding, selection and oversight of our authorized delegates, permissible investments in an amount equal to our outstanding payment obligations with respect to some of the products subject to licensure, recordkeeping and reporting, and disclosures to consumers. We are also subject to periodic examinations by the relevant licensing authorities, which may include reviews of our compliance practices, policies and procedures, financial position and related records, various agreements that we have with our issuing banks, retail distribution partners and other third parties, privacy and data security policies and procedures, and other matters related to our business. As a regulated entity, Cuentas may incur significant costs associated with regulatory compliance. We anticipate that compliance costs and requirements will increase in the future for our regulated subsidiaries and that additional subsidiaries will need to become subject to these or new regulations. If we fail to maintain our existing money transmitter licenses or permits, or fail to obtain new licenses or permits in a timely manner, our business, results of operations and financial condition could be materially and adversely affected.
Marketing
Cuentas expects to use a combination of internal resources as well as third parties for our marketing efforts. The digital marketing placements will include social media, SEO (Search Engine Optimization), internet, geo fencing, online streaming providers, influencers, and other digital providers. Traditional marketing efforts to be evaluated include media such as radio, TV, print, billboards, bus wraps, bus benches, TV, radio, etc.
Media spend is distributed amongst these marketing vehicles and adjusted as acquisition data is received. Our initial program is designed to test creative, geo targeting and formats. Once feedback is analyzed, spending will be optimized to enhance efficiency and cost of acquisition. Vertical market integration and partnerships will also be developed to augment growth and stability.
Marketing strategies for customer acquisition have focused on key markets, targeted audiences, lifestyle fit, brand awareness, key metrics and go-to-market plans, especially where Hispanic & Latino groups are concentrated, such as Southern California, Texas, New York, Florida, Arizona and New Mexico.
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Entry into a Joint-Venture Agreement with WaveMAX Corporation (“WaveMax”)
On July 21, 2021, the Company and WaveMAX entered into a Definitive Joint-Venture Agreement (the “Agreement”). Pursuant to the Agreement, the Company and WaveMax formed CuentasMax LLC on Dec 8, 2021, a joint venture (“CUENTASMAX”) which would install WiFi6 shared network (“WSN”) systems in up to 1,000 retail locations in the New York metropolitan tristate area using access points and small cells to provide users with access to the WSN (the “JV Project”). The WSN will allow CUENTASMAX to generate location-based advertising configured by advertisers using WaveMAX’s advertising dashboard technology directly to users over the WSN, could permit users to pay a service fee for ad-free access to the WSN. The ownership and management of CUENTASMAX shall be as follows: 50% to the Company, 25% to WaveMAX and 25% to Consultoria y Asesoria de Redes, S.A. de C.V. (“Execon”). Execon currently manages approximately 20,000 WiFi endpoints with WaveMax in Mexico. Each of the Company and WaveMAX agreed to fund $120,000 (for a total of $240,000) initially upon execution of the Agreement. In addition, each of the Company and WaveMAX has agreed to fund an additional $127,500 over the succeeding five months, in each case, subject to approval of each party’s board of directors. The expenses of the JV Project shall include acquiring the Access Points hardware, the installation and configuration of the Access Points hardware for use with the broadband internet service at each Retail Location, entering into the necessary agreements with the Retail Locations, instore marketing and promotion of the WSN program, and expenses relating to commercialization of the digital advertising program. The Board of Directors of CUENTASMAX shall initially be comprised of four persons, two designated by the Company, one designated by WaveMAX, and one designated by Execon. The officers of CUENTASMAX shall be the persons from time to time designated by mutual agreement of the Company and WaveMAX, with the initial officers to be determined. It is hoped that up to 1,000 high traffic, prime location convenience stores and “bodegas” (small community markets) will be signed up in conjunction with the Company’s distribution network that sells prepaid debit card, e-store, e-wallet and digital services. A fee of 2% (two percent) of the net revenue of CUENTASMAX will be paid by CUENTASMAX on a monthly basis as a commission to Innovateur Management SAPI de CV. WaveMAX grants CUENTASMAX exclusive rights to use and deploy the WaveMAX Technology, including any and all patents owned or to be owned by WaveMAX and any and all related enhancements or applications of the WaveMAX Technology and any and all prior and subsequent improvements and/or new technology developed by WaveMAX solely in the Company’s BODEGAS network throughout the United States. The parties have agreed to expand CUENTASMAX to other areas of the U.S. once the current deployment is in progress or has been completed. As of date, CuentasMax has installed 30 WiFi6 Access Points in New York City, Los Angeles, and Puerto Rico at different small businesses including Bodegas, restaurants, beauty salons and gas stations. CuentasMax also has pilot project agreements with the Bodega Association and Business Group in NYC, Benelisha Group in LA, and Top Gasoline Inc in Puerto Rico. As of December 31, 2023, the Company funded $20,000 in CUENTASMAX and recorded equity losses in the amount of $38,000. The company has not registered any revenue to date.
Cuentas is evaluating the synergy between CuentasMAX and World Mobile’s platform for potential integration and further development or enhancement of platforms.
Competition
Cuentas Mobile will face prepaid competitors including, without limitation, AT&T, Sprint, Viber, WhatsApp, Skype, MetroPCS, TracFone, Telcel, StraightTalk, Simple Mobile, Virgin Mobile, Boost, Net 10, IDT, and Boost. Cuentas Mobile plans to implement e-SIMS which will reduce the need for physical mobile phone SIMs that need to be shipped to consumers who want Cuentas Mobile service. There can be no assurance that the introduction of e-SIMS will be successful and generate significant revenue.
6
Investments in Real Estate Developments in Florida
Lakewood Village
On March 7, 2023 the Company acquired a six percent (6%) equity interest in Lakewood Village from Core Development Holdings Corporation (“Core”), pursuant to a Membership Interest Purchase Agreement (“MIPA”), in exchange for 295,282 shares of Common Stock, representing approximately19.99% of the then outstanding shares of Common Stock. Core holds approximately 29.3% of 4280 Lakewood Road Manager, LLC (“Lakewood Manager”), which in turn owns 86.45% of the membership interests in 4280 Lakewood Road, LLC (“4280 Project”), an affordable multi-family real estate project located in Lake Worth, Florida. As a result of the transaction, the Company acquired $700,000 of equity in the Lakewood Manager. Lakewood Manager, an affiliate of RENCo USA, Inc. (“Renco”), is constructing the 4280 Lakewood Project with RENCO Structural Building System, a proprietary composite structural system distributed by Renco. Lakewood Village is the first sustainable rental housing project developed in the US using a patented MCFR Mineral Composite Fiber Reinforced Construction Technology that has been approved for hurricane-prone areas as such in Florida. The Lakewood Village project is an affordable multi-family real estate development located in Lake Worth, Palm Beach County, Florida, consisting of 96 apartments that have two and three bedrooms.
Core claimed significant financial and other damages because the Company’s Shares were never released and delivered to Core even though Core fulfilled all of its obligations pursuant to the MIPA.
In June 2025, the Company’s management initiated negotiations of a settlement agreement with Core, pursuant to which the Company agrees to transfer and assign all rights of its membership units of 4280 Lakewood Road Manager, LLC to Core and in return, Core shall transfer and assign any and all rights of the Company’s Shares held in escrow, back to the Company.
Subsequently, the Company recognized an impairment loss in the amount of $700 on its equity investment in 4280 Lakewood Road Manager, LLC., as of June 30, 2024. The company is no longer involved in any real estate transactions.
Supply Agreement with Renco USA
In March 2023, the Company entered a 10 year supply agreement with Renco to provide Renco’s patented building materials for new, sustainable rental housing projects. Renco’s patented MCFR (Mineral Composite Fiber Reinforced) Construction System provides cost efficiency, reduced build time, and sustainable benefits. Renco’s system is hurricane proof up to Category 5, which is a major benefit for developing housing projects in the South Florida market and other hurricane prone areas where we are planning to develop projects. Renco’s system is also earthquake resistant. Renco has the exclusive rights in the USA to the patented building process. The Renco Wall, Floor and Roofing System is a unique MCFR Building System that creates interlocking, fiber reinforced, composite building blocks and other construction related products that can be connected in an almost limitless variety of designs. Renco’s system can be used to create homes, apartment buildings, hotels, office buildings, warehouses, infrastructure products and more. To date, the Company has not received any revenue from this supply agreement.
Operating Agreement with Brooksville Development Partners, LLC
On April 13, 2023, Cuentas entered into an Operating Agreement for Brooksville Development Partners, LLC (“BDP”), a limited liability company formed for the purpose of acquiring land for the development of a residential apartment community consisting of approximately 360 apartments in Brooksville, Florida. Cuentas has a 63.9% equity interest in BDP and two others own the remaining 36.1% equity interest in BDP. All real and personal property owned by BDP will be owned by BDP as an entity. One of the other members is the manager of the project.
On April 28, 2023, BDP acquired a 21.8 acre site for development of the Brooksville project for a purchase price of $5.05 million. The Company deposited as an initial capital contribution $2,000,000 into a title insurance escrow account which was released from escrow by the Title Agent to fund the balance of the purchase price of the vacant land, together with a $3.05 million bank loan from Republic Bank of Chicago, which was amended and restated on January 27, 2024 for $3.055 million. BDP and ALF Trust u/a/d 09/28/2023 executed a $500,000 Loan Extension Agreement to ensure the promissory note necessary to fund the interest reserve and fees relating to the Loan Extension Agreement and the working capital needs of BDP. Cuentas contributed an additional $64,000 for further development of the Brooksville project on June 29, 2023 and has paid almost $65,000 for engineering expenses. BDP owns the vacant land (the “Brookville Property”), free and clear of any liens, claims and encumbrances with the sole exception being the Republic Bank loan.
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On May 27, 2025, Cuentas sold its 63.9% equity interest in the Brooksville Property for $800,000 to Brooksville FL Partners, LLC (the “Buyer”), an existing minority member of BDP. The funds were distributed by a mutually agreed escrow agent, and Cuentas settled debts with 4 major creditors. The remaining funds were used for operating expenses. With these funds, the Company was able to settle debts totaling approx. $1.132M with 4 major creditors for final actual cost of $666,356
Corporate Information
Cuentas was incorporated in the state of Florida on September 21, 2005. Our principal executive offices are located at 235 Lincoln Rd., Suite 210, Miami Beach, Florida 33139, and our telephone number is 305-537-6832. Our corporate website address is www.cuentas.com. The information contained on or accessible through our website is not a part of this report, and the inclusion of our website address in this report is an inactive textual reference only.
Nasdaq Delisting
At the opening of business on December 20, 2023, trading in the Common Stock and publicly-traded warrants was suspended and subsequently the Common Stock and publicly-traded warrants were delisted from Nasdaq for the Company’s failure to comply with Nasdaq Marketplace Rule 5550(b)(1) which requires the Company to maintain shareholders’ equity of not less than $2,500,000 for continued listing on The Nasdaq Capital Market.
The Company’s Common Stock and publicly-traded warrants began trading on the Pink Current Information tier of the over-the-counter market operated by OTC Markets Group effective with the open of business on December 20, 2023, under its trading symbol: CUEN and CUENW, respectively. Currently CUEN and CUENW are listed as “Expert Market OTC” which means the shares are only available to trade via private transactions, not on the public market. On July 2, 2025, Cuentas filed its 2024-Q2 and 2024-Q3 10Q reports as the first steps to hopefully regain compliant status and be qualified to trade on open markets.
Employees
As of March 31, 2025, our management team consisted of the Chief Executive Officer, President, and Chief Financial Officer. We have an additional three full-time employees: our Compliance Officer, IT Director, and Executive Assistant. For more information relating to the employment agreements, please see the section below entitled Item 11. “Executive Compensation.”
ITEM 1A. RISK FACTORS
Investing in our securities involves a high degree of risk. Before deciding whether to invest in our securities, you should carefully consider the risks described below together with all of the other information in this report, including our financial statements, the notes thereto and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” If any of the described risks occur, our business, financial condition or results of operations could be materially harmed. In such case, the value of our securities could decline and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently consider immaterial may also adversely affect us. There also may be other unknown or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse effects on our future results.
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Risks Related to Our Financial Position and Need for Additional Capital
We will require additional funding to progress our business. Such financing may only be available on disadvantageous terms, or may not be available at all. Any new equity financing could have a substantial dilutive effect on our existing stockholders.
At December 31, 2024, we 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. Our cash position may decline in the future, and we may not be successful in maintaining an adequate level of cash resources. Accordingly, we will be required to seek additional debt or equity financing in order to support our growing operations. We may not be able to obtain additional financing on satisfactory terms, or at all, and any new equity financing could have a substantial dilutive effect on our existing stockholders. If we cannot obtain additional financing, we will not be able to achieve the sales growth that we need to cover our costs, and our results of operations would be negatively affected.
As a result of our current lack of financial liquidity, there is substantial doubt regarding our ability to continue as a “going concern,” within one year from the issuance date of our financial statements.
As a result of our current lack of financial liquidity, our auditors’ report for our 2024 consolidated financial statements contains a statement concerning substantial doubt regarding our ability to continue as a going concern. Our lack of sufficient liquidity could make it more difficult for us to secure additional financing or enter into strategic relationships on terms acceptable to us, if at all, and may materially and adversely affect the terms of any financing that we may obtain and our public stock price generally.
Our continuation as a going concern is dependent upon, among other things, achieving positive cash flow from operations and, if necessary, augmenting such cash flow using external resources to satisfy our cash needs. However, we may be unable to achieve these goals and therefore may be unable to continue as a going concern.
Our ability to continue as a going concern is dependent upon raising capital from financing transactions and revenue from operations. Management anticipates their business will require substantial additional investments that have not yet been secured. Management is continuing in the process of fund raising in the private equity and capital markets as we will need to finance future activities.
No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, if needed, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing.
This going concern opinion could materially limit our ability to raise additional funds through the issuance of new debt or equity securities and future reports on our financial statements may also include an explanatory paragraph with respect to our ability to continue as a going concern.
Risks Related to Our Company
We have a limited operating history and therefore we cannot ensure, either in the near- or long-term, that we will be able to generate cash flow or profit.
We have a limited operating history upon which you may evaluate our business and an investment in our Common Stock may entail significantly more risk than the shares of common stock of a company with a substantial operating history. Our ability to successfully develop our products, and to realize consistent, meaningful revenues and profit has not been established and cannot be assured. For us to achieve success, our products must receive broader market acceptance by consumers. Without this market acceptance, we will not be able to generate sufficient revenue to continue our business operation. If our products are not widely accepted by the market, our business may fail.
Our ability to achieve and maintain profitability and positive cash flow is dependent upon our ability to generate revenues, manage development costs and expenses, and compete successfully with our direct and indirect competitors.
Our business operations are subject to numerous risks, uncertainties, expenses and difficulties associated with early stage enterprises. You should consider an investment in our company in light of these risks, uncertainties, expenses and difficulties. Such risks include: the absence of a lengthy operating history; insufficient capital to fully realize our operating plan; our ability to anticipate and adapt to a developing market; a competitive environment characterized by well-capitalized competitors; our ability to identify, attract and retain qualified personnel; our reliance on key management personnel.
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Because we are subject to these risks, evaluating our business may be difficult. We may be unable to successfully overcome these risks, which could harm our business and prospects. Our business strategy may be unsuccessful and we may be unable to address the risks we face in a cost-effective manner, if at all. If we are unable to successfully address these risks, there may be an adverse effect on our business, results of operations, financial condition and cash flows.
We have incurred substantial losses from operations to date and we may never achieve profitability from operations or generate sufficient cash flows to make or sustain distributions to our shareholders.
We have incurred substantial losses from operations to date and may never achieve profitability from operations. Even if we do achieve profitability, we cannot assure you that we will be able to sustain or increase profitability on a quarterly or annual basis in the future. There can be no assurance that future operations will be profitable or that we will be able to make or sustain distributions to our shareholders from cash from operations. Revenues and profits, if any, will depend upon various factors, including whether we will be able to successfully implement our business plan and operating strategy. We may not achieve our business objectives and the failure to achieve such goals would have an adverse impact on us. In addition, an inability to achieve profitability could have a detrimental effect on the market value of our Common Stock.
We may not be able to secure sufficient capital to effectively execute our business plan.
We may not be able to attract and obtain sufficient capital from the equity and debt markets, or any other capital markets, to execute our business plan and grow our business. If we do not have access to sufficient funding in the future, we may not be able to make necessary capital expenditures necessary to execute our business plan, and in that event our ability to generate revenue may be significantly impaired.
We have identified material weaknesses in our disclosure controls and procedures and internal control over financial reporting.
Update for 2024 year end Maintaining effective internal control over financial reporting and effective disclosure controls and procedures are necessary for us to produce reliable financial statements. As discussed in Item 9A – “Controls and Procedures” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and in our quarterly report for the period ended September 30, 2024 we have evaluated our internal control over financial reporting and our disclosure controls and procedures and concluded that they were not effective as of December 31, 2024 or September 30, 2024. A material weakness is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses we identified are:
| ● | Lack of appropriate segregation of duties; |
| ● | Lack of information technology (“IT”) controls over revenue; |
| ● | Lack of adequate review of internal controls to ascertain effectiveness; and |
| ● | Lack of control procedures that include multiple levels of supervision and review. |
The Company is committed to remediating its material weaknesses as promptly as possible. Implementation of the Company’s remediation plans has commenced and is being overseen by the board. However, there can be no assurance as to when these material weaknesses will be remediated or that additional material weaknesses will not arise in the future. Even effective internal control can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. Any failure to remediate the material weaknesses, or the development of new material weaknesses in our internal control over financial reporting, could result in material misstatements in our financial statements, which in turn could have a material adverse effect on our financial condition and the trading price of our Common Stock and we could fail to meet our financial reporting obligations. We have identified weaknesses in our internal controls, and we cannot provide assurances that these weaknesses will be effectively remediated or that additional material weaknesses will not occur in the future.
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If not remediated, our failure to establish and maintain effective disclosure controls and procedures and internal control over financial reporting could result in material misstatements in our financial statements and a failure to meet our reporting and financial obligations, each of which could have a material adverse effect on our financial condition and the trading price of our Common Stock.
We are involved in various litigation matters that are expensive and time consuming, and, if resolved adversely, could harm our business, financial condition, or results of operations.
Any litigation to which we are a party may result in an onerous or unfavorable judgment that may not be reversed upon appeal, or we may decide to settle lawsuits on similarly unfavorable terms. Any such negative outcome could result in payments of substantial monetary damages or fines, or changes to our products or business practices, and accordingly our business, financial condition, or results of operations could be materially and adversely affected. See Item 3. “Legal Proceedings” for a description of certain litigation involving the Company.
Although the results of lawsuits and claims cannot be predicted with certainty, we do not believe that the final outcome of those matters that we currently face will have a material adverse effect on our business, financial condition, or results of operations. However, defending these claims is costly and can impose a significant burden on management and employees, and we may receive unfavorable preliminary or interim rulings in the course of litigation, which could adversely affect the market price of our securities. There can be no assurances that a favorable final outcome will be obtained in all cases.
Operating our business on a larger scale could result in substantial increases in our expenses.
As our business grows in size and complexity, we can provide no assurance that we can successfully enter new markets or grow our business without incurring significant additional expenses, that our management platform will ultimately prove to be scalable, and/or that we will be able to achieve economies of scale or we will be able to operate our business on a larger scale than the scale on which we have historically operated.
Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.
In the ordinary course of our business we use sophisticated call processing engines and other sophisticated telecommunications technology platforms, and we acquire and store sensitive data, including intellectual property, our proprietary business information and personally identifiable information of our prospective and current tenants, our employees and third-party service providers on our networks and website. The secure processing and maintenance of this information is critical to our operations and business strategy. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in revenue losses, legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, disruption to our operations and the services we provide to customers or damage our reputation, which could adversely affect our results of operations and competitive position.
We are dependent on our executive officers and dedicated personnel, and the departure of any of our key personnel could materially and adversely affect us.
We rely on a small number of persons to carry out our business and investment strategies. An Executive Search Committee has been established to evaluate and propose qualified executive candidates for approval by the Board of Directors. Any member of our senior management may cease to provide services to us at any time. The loss of the services of any of our key management personnel, or our inability to recruit and retain qualified personnel in the future, could have an adverse effect on our business and financial results. As we expand, we will continue to need to attract and retain qualified additional senior management but may not be able to do so on acceptable terms or at all. Cuentas does not yet have but intends to have key man life insurance policies in place.
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We are subject to regulation which may adversely affect our ability to execute our business plan.
We operate in an ever-evolving and complex legal and regulatory environment. We, the products and services that we offer and market, and those for which we provide processing services, are subject to a variety of federal, state and foreign laws and regulations, including, but not limited to: federal communications laws and regulations; foreign jurisdiction communications laws and regulations; federal anti-money laundering laws and regulations, including the USA PATRIOT Act (the “Patriot Act”), the Bank Secrecy Act (the “BSA”), anti-terrorist financing laws and anti-bribery and corrupt practice laws and regulations in the U.S., and similar international laws and regulations, including the Proceeds of Crime (Money Laundering) and Terrorist Financing Act in Canada; state unclaimed property laws and money transmitter or similar licensing requirements; federal and state consumer protection laws, including the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (the “CARD Act”), and the Durbin Amendment to Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), and regulations relating to privacy and data security; and foreign jurisdiction payment services industry regulations. We believe that we are currently operating in compliance with all applicable laws and regulations, but there is no certainty that laws and regulations affecting our business will not change. Any such change of laws and regulations applicable to our business might adversely affect our ability to execute our business plan and achieve profitable operating results.
We are subject to Anti-Money Laundering Regulation.
We are subject to a comprehensive federal anti-money laundering regulatory regime that is constantly evolving. The anti-money laundering regulations to which we are subject include the BSA, as amended by the Patriot Act, which criminalizes the financing of terrorism and enhances existing BSA regimes through: (a) expanding AML program requirements to certain delineated financial institutions; (b) strengthening customer identification procedures; (c) prohibiting financial institutions from engaging in business with foreign shell banks; (d) requiring financial institutions to have due diligence procedures and, where appropriate, enhanced due diligence procedures for foreign correspondent and private banking accounts; and (e) improving information sharing between financial institutions and the U.S. government. Pursuant to the BSA, we have instituted a Customer Identification Program, (CIP). The CIP is incorporated into our BSA/anti-money laundering compliance program. We are increasingly facing more stringent anti-money laundering rules and regulations, compliance with which may increase our costs of operation, decrease our operating revenues and disrupt our business” for additional information. Cuentas is or may become subject to reporting and recordkeeping requirements related to anti-money laundering compliance obligations arising under the Patriot Act and its implementing regulations. In addition, provisions of the BSA enacted by the Prepaid Access Rule issued by the Financial Crimes Enforcement Network (“FinCEN”), impose certain obligations, such as registration and collection of consumer information, on “providers” of certain prepaid access programs, including the prepaid products issued by Cuentas and our issuing banks for which we serve as program manager. In order to qualify for certain exclusions under the Prepaid Access Rule, some of our content providers were required to modify operational elements of their products, such as limiting the amount that can be loaded onto a card in any one day. In addition, pursuant to the Prepaid Access Rule, Cuentas and some of our retail distribution partners have adopted policies and procedures to prevent the sale of more than $10,000 in prepaid access (including closed loop and open loop products that fall under the monetary thresholds outlined above) to any one person during any one day.
We are subject to Consumer Protection Regulation.
We are subject to various federal, state and foreign consumer protection laws, including those related to unfair and deceptive trade practices as well as privacy and data security. Failure to comply with, or further expansion of, consumer protection regulations could have a material adverse effect on our business, results of operations and financial condition. A data security breach could expose us to liability and protracted and costly litigation, and could adversely affect our reputation and operating revenues.
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We are subject to Federal Regulation.
At the federal level, Congress and federal regulatory agencies have enacted and implemented new laws and regulations that affect the prepaid industry, such the CARD Act and FinCEN’s Prepaid Access Rule. Moreover, there are currently proposals before Congress that could further substantially change the way banks, including prepaid card issuing banks and other financial services companies, are regulated and are permitted to offer their products to consumers. Non-bank financial services companies, including money transmitters and prepaid access providers, are now regulated at the federal level by the Consumer Financial Protection Bureau (the “CFPB”), which began operations in July 2011, bringing additional uncertainty to the regulatory system and its impact on our business. We are increasingly facing more stringent anti-money laundering rules and regulations, compliance with which may increase our costs of operation, decrease our operating revenues and disrupt our business. Abuse of our prepaid products for purposes of financing sanctioned countries, terrorist funding, bribery or corruption could cause reputational or other harm that could have a material adverse effect on our business, results of operations and financial condition. Failure to comply with, or further expansion of, consumer protection regulations could have a material adverse effect on our business, results of operations and financial condition. Failure by us to comply with federal banking regulation may subject us to fines and penalties and our relationships with our issuing banks may be harmed.
We are subject to Money Transmitter Licenses or Permits.
Most states regulate the business of sellers of traveler’s checks, money orders, drafts and other monetary instruments, which we refer to collectively as money transmitters. While many states expressly exempt banks and their agents from regulation as money transmitters, others purport to regulate the money transmittal businesses of bank agents or do not extend exemptions to non-branch bank agents. In those states where we are required to be licensed, we are subject to direct supervision and regulation by the relevant state banking departments or similar agencies charged with enforcement of the money transmitter statutes and must comply with various restrictions and requirements, such as those related to the maintenance of certain levels of net worth, surety bonding, selection and oversight of our authorized delegates, permissible investments in an amount equal to our outstanding payment obligations with respect to some of the products subject to licensure, recordkeeping and reporting, and disclosures to consumers. We are also subject to periodic examinations by the relevant licensing authorities, which may include reviews of our compliance practices, policies and procedures, financial position and related records, various agreements that we have with our issuing banks, retail distribution partners and other third parties, privacy and data security policies and procedures, and other matters related to our business. As a regulated entity, Cuentas may incur significant costs associated with regulatory compliance. We anticipate that compliance costs and requirements will increase in the future for our regulated subsidiaries and that additional subsidiaries will need to become subject to these or new regulations. If we fail to maintain our existing money transmitter licenses or permits, or fail to obtain new licenses or permits in a timely manner, our business, results of operations and financial condition could be materially and adversely affected.
We are subject to Privacy Regulation.
In the ordinary course of our business, we collect and store or may collect and store personally identifiable information about customers, holders of our cards, subscribers, and users. This information may include names, addresses, email addresses, social security numbers, driver’s license numbers and account numbers. We also maintain or may maintain a database of cardholder data for our proprietary cards relating to specific transactions, including account numbers, in order to process transactions and prevent fraud. These activities subject us to certain privacy and information security laws, regulations and rules in the United States, including, for example, the privacy provisions of the Gramm-Leach-Bliley Act and its implementing regulations, various other federal and state privacy and information security statutes and regulations, and the Payment Card Industry Data Security Standard. These federal and state laws, as well as our agreements with our issuing banks, contain restrictions relating to the collection, processing, storage, disposal, use and disclosure of personal information, and require that we have in place policies regarding information privacy and security. We have in effect a privacy policy relating to personal information provided to us in connection with requests for information or services, and we continue to work with our issuing banks and other third parties to update policies and programs and adapt our business practices in order to comply with applicable privacy laws and regulations. Certain state laws also require us to notify affected individuals of certain kinds of security breaches of computer databases that contain their personal information. These laws may also require us to notify state law enforcement, regulators or consumer reporting agencies in the event of a data breach. Failure to comply with, or further expansion of, consumer protection regulations could have a material adverse effect on our business, results of operations and financial condition. A data security breach could expose us to liability and protracted and costly litigation, and could adversely affect our reputation and operating revenues.
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We were subject to Card Association and Network Organization Rules.
In addition to the federal, state, local, and foreign jurisdiction laws and regulations discussed above, we, Cuentas and our issuing banks, were also subject to card association and debit network rules and standards. The operating rules govern a variety of areas, including how consumers and merchants may use their cards and data security. Each card association and network organization audits us from time to time to ensure our compliance with these standards. Noncompliance with these rules or standards due to our acts or omissions or the acts or omissions of businesses that work with us could result in fines and penalties or the termination of the card association registrations held by us or any of our issuing banks. Changes in card association rules or standards set by Visa or Vanilla Reload, or changes in card association and debit network fees or products or interchange rates, could materially and adversely affect our business, financial condition and results of operations.
Our success depends, in part, upon our ability to hire and retain highly skilled managerial, and operational personnel, and the past performance of our senior management may not be indicative of future results.
The implementation of our business plan may require that we employ additional qualified personnel. Competition for highly skilled managerial, telecommunications, financial and operational personnel is intense, and we cannot assure our stockholders that we will be successful in attracting and retaining such skilled personnel. If we are unable to hire and retain qualified personnel as required, our growth and operating results could be adversely affected.
The Company and its subsidiaries have well-financed, well-managed competitors and may not be able to adequately compete in its market.
Most of our competitors are larger and have greater financial, technical, marketing, and other resources than we do. Some of our competitors have seasoned management teams with more experience and expertise in our industry than we do. Some competitors may enjoy significant competitive advantages that result from, among other things, having substantially more available capital, having a lower cost of capital, having greater economies of scale, and having enhanced operating efficiencies compared to ours.
Cuentas Mobile and World Mobile face prepaid competitors including AT&T, Sprint, Viber, WhatsApp, Skype, MetroPCS, TracFone, Telcel, StraightTalk, Simple Mobile, Virgin Mobile, Boost, Net 10, IDT and Boost.
Cuentas Mobile will be dependent on the performance of third-party network operators.
MVNO operators, including Cuentas Mobile and World Mobile, earn revenues by purchasing network capacity from other network operators and reselling it to end users. Cuentas Mobile services operate on the largest 5G nationwide network from one of the top 3 mobile carriers and is dependent on the performance of its underlying provider and its network.
To compete effectively, Cuentas needs to improve its offerings continuously.
Cuentas plans to begin operations shortly and expects to be substantially smaller than its competitors. As a result, to compete effectively, Cuentas needs to improve its offerings rapidly and continuously.
Cuentas Mobile or World Mobile may be unable to attract and retain users.
Cuentas has an operating history in the Mobile Phone business of almost three years. If Cuentas Mobile or World Mobile cannot increase the number of subscribers using its Cuentas Mobile and World Mobile cellular service this will significantly adversely affect Cuentas’ operating results, revenues, financial condition, and ability to remain in business.
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Cuentas may be adversely affected by fraudulent activity.
Criminals, including, without limitation, cyber-organized criminal syndicates, and others, use increasingly sophisticated methods to engage in illegal activities involving prepaid cards, reload products, and customer information. Cuentas relies on third parties for certain transaction processing services, which subjects Cuentas and its customers to risks related to the vulnerabilities of these third parties, as well as Cuentas’ own vulnerabilities to criminals engaged in fraudulent activities. Fraudulent activity could result in the imposition of regulatory sanctions, including significant monetary fines, which could adversely affect Cuentas’ business, operating results, and financial condition.
Risks Related to an Investment in Our Securities
The market price of our Common Stock and Warrants may be highly volatile, and you could lose all or part of your investment.
The trading price of our Common Stock and Warrants is likely to be volatile. This volatility may prevent you from being able to sell your securities at or above the price you paid for your securities. Our stock price could be subject to wide fluctuations in response to a variety of factors, which include:
| ● | whether we achieve our anticipated corporate objectives; |
| ● | actual or anticipated fluctuations in our quarterly or annual operating results; |
| ● | changes in financial or operational estimates or projections; |
| ● | changes in the economic performance or market valuations of companies similar to ours; and |
| ● | general economic or political conditions in the United States or elsewhere. |
Cuentas’ current status as being out of compliance with SEC filings is expected to be resolved shortly, bringing Cuentas back into compliance regarding its SEC filings. In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our Common Stock, regardless of our actual operating performance.
Convertible debt and dilution.
The Company’s 2025 convertible notes could result in the issuance of additional shares of common stock upon conversion, which may be dilutive to existing stockholders.
Liens on Fintech assets; potential asset transfer.
The secured notes issued to Michael De Prado are collateralized by the Company’s Fintech (non-MVNO) assets. If the Company defaults or if the holder elects the non-cash option at maturity of the second note, the Company could be required to transfer all such Fintech assets.
Governance rights granted to an investor.
While in effect, the director designation right and protective approval rights granted to World Mobile Group Ltd. may constrain certain corporate actions or require additional approvals.
Our shares are subject to the penny stock rules, which make it more difficult to trade our shares.
The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. As long as the price of our Common Stock is less than $5.00, our Common Stock will be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our Common Stock, and therefore shareholders may have difficulty selling their shares.
If we do not remain current in our SEC reporting obligations, our ability to raise capital and the liquidity of our common stock could be materially harmed.
Our business plan assumes that we will continue to access the capital markets from time to time, which in turn depends on us being current in our filings with the SEC. If we experience delays in filing our periodic reports, receive a going concern qualification, or otherwise fail to remain current, investors and lenders may be unwilling to provide additional financing, broker-dealers may be less willing to make a market in our securities, and existing and potential investors may view our securities as higher risk. Any such result could limit our ability to raise needed capital, increase our cost of capital, and reduce the trading volume and market price of our common stock.
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Failure to remain current in our SEC filings could result in restrictions or interruptions in the trading of our common stock.
If we are not current in our SEC reports, the exchange or quotation system on which our common stock is listed or quoted could take action against us, including warnings, changes in our market tier, or removal of our securities from trading. In addition, the SEC has authority to suspend trading in a company’s securities, and broker-dealers may be unwilling or unable to publish quotations in our stock if our public information is not current. Any suspension, delisting or limitation on trading of our common stock would severely reduce or eliminate the public market for our shares, make it more difficult for stockholders to sell their shares, and make it more difficult and costly for us to raise additional capital.
We do not expect to pay dividends for the foreseeable future.
We do not expect to pay dividends on our Common Stock for the foreseeable future. Accordingly, any potential investor who anticipates the need for current dividends should not purchase our securities.
Item 1C. Cybersecurity
Cybersecurity Risk Management and Strategy
Our Board and management recognize the critical importance of maintaining the trust and confidence of our customers, clients, business partners and employees.
In general, we seek to address cybersecurity risks through a comprehensive, cross-functional approach that is focused on preserving the confidentiality, security and availability of the information that we collect and store by identifying, preventing and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur.
Our cybersecurity risk management efforts include:
| ● | risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; |
| ● | a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; and |
| ● | a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents. |
Cybersecurity Governance
Our board of directors considers cybersecurity risk as part of its risk oversight function. The board of directors oversees management’s implementation of our cybersecurity risk management program.
Our management team, including our CEO, is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.
Our management team supervises efforts to prevent,
detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security
personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants
To date, we have
16
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
We currently lease office space at 235 Lincoln Rd., Miami Beach, FL 33139 as our principal offices. We believe these facilities are in good condition and are sufficient for our current use but may need to expand our leased space as our business efforts increase.
ITEM 3. LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.
On May 1, 2019, the Company received a notice of demand for arbitration from Secure IP Telecom, Inc. (“Secure IP), who allegedly had a Reciprocal Carrier Services Agreement (“RCS”) exclusively with Limecom and not with the Company. The arbitration demand originated from another demand for arbitration that Secure IP received from VoIP Capital International (“VoIP”) in March 2019, demanding $1,053 in damages allegedly caused by unpaid receivables that Limecom assigned to VoIP based on the RCS. On or about October 5, 2020, the trial court appointed a receiver over Limecom, Inc. (“Limecom”) in the matter of Spectrum Intelligence Communications Agency, LLC. v. Limecom, Inc., case no. 2018-027150-CA-01 pending in the 11th Circuit for Miami-Dade County, Florida. On June 5, 2020, Secure IP Telecom, Inc. (“Secure IP”) filed a complaint against Limecom, Heritage Ventures Limited (“Heritage”), an unrelated third party and owner of Limecom, and the Company, case no. 20-11972-CA-01. Secure IP alleges that the Company received certain transfers from Limecom during the period that the Company wholly owned Limecom that may be an avoidable under Florida Statute § 725.105. On July 13, 2021, the two cases were consolidated, and are now pending before the same trial court under the former case number. The Company has answered and denied any liability with respect to both complaints. To the extent the Company has exposure for any transfers from Limecom, Heritage has indemnified the Company for any such liability and the Company has a pending cross-claim against Heritage for purposes of enforcing the indemnification obligation. A review of the books and records of the Company reflect aggregate transfers from Limecom to the Company or its affiliates of less than $600,000. The Company’s books and records reflect that the Company fully reimbursed Limecom through direct payment of expenses of Limecom and through issuance of shares by the Company to employees or other vendors on behalf of Limecom for settlement and release of claims the employees or vendors may have asserted against Limecom. The books and records of the Company therefore do not reflect an identifiable avoidable transfer, but this analysis may change as the discovery process continues. At this time, based upon an analysis of the Company’s books and records, the loss contingency is not capable of reasonable estimation under the above circumstances, and the likelihood of an adverse judgment is not probable at this time. An adverse judgment in this matter is reasonably possible and based upon an analysis of litigation costs and likelihood of a settlement. As of December 31, 2024, the company accrued $300,000 due to this matter. On July 24, 2024, the court entered a Final Judgment in Garnishment after a non-jury trial in favor of Spectrum and against Cuentas, Inc. in the amount of $513,872.80 (the “Garnishment Judgment”), and the Company believes that it will be able to settle this matter for $300,000, which has been set aside.
On October 4, 2022, Crosshair Media Placement, LLC, a Kentucky based marketing company, filed and served a complaint on Cuentas for breach of contract alleging breach of contract damages of $629,807.74, which case remains pending in the United States District Court for the Western District of Kentucky, case no. 3:22-CV-512-CHB. On May 9, 2023, the Company and the plaintiff attended a court settlement conference before the federal magistrate judge presiding over the matter. On May 13, 2025, the Company’s President and Chief Executive Officer executed a joint personal guaranty in favor of Crosshair Media Placement, LLC, securing the full payment of amounts owed by the Company pursuant to a judgment in the amount of $453,856.68, plus accrued interest and attorney’s fees. Pursuant to an agreement with Crosshair Media Placement, LLC’s legal counsel, the parties agreed to a full and final settlement in the amount of $465,856.68, inclusive of interest and legal fees. Payment was remitted on May 27, 2025, by the escrow agent in connection with the closing of the Membership Interest Purchase Agreement.
On February 8, 2023, a former employee of the Company filed a complaint for breach of employment agreement alleging the Company failed to pay her certain compensation she alleges she was entitled to upon her resignation. On May 22, 2025, the Company entered into a settlement agreement to resolve a previously adjudicated legal matter with a full and final payment of $28,000, inclusive of interest and legal fees. The settlement included mutual releases of claims by both parties. Although the payment was initially attempted on May 27, 2025, by the escrow agent handling the Membership Interest Purchase Agreement, it was completed on May 28, 2025, due to incorrect account information provided by the payee.
17
On February 7, 2024, the Company entered into an agreement with 1800 Diagonal Lending LLC, an accredited investor (the “Investor”), pursuant to which the Company sold the investor an unsecured original issuance discount promissory note in the principal amount of $178,000 (the “February Promissory Note”). The Company received net proceeds of $150,000 in consideration of issuance of the February Promissory Note after original issue discount of $23,000 and legal fees of $5,000. The aggregate debt discount of $28,000 is amortized to interest expenses over the respective term of the note. The February Promissory Note incurs a one-time interest charge of 12% which is added to the principal balance, has a maturity date of November 15, 2024, and requires monthly payments of principal and interest of $22,000 beginning on March 15, 2024. The February Promissory Note may be convertible into common shares of the Company at any time following an event of default at a rate of 65% of the lowest trading price of the Company’s common stock during the ten prior trading days. In addition, upon default, the Company must repay an amount equal to 150% of the then outstanding amount of principal and accrued interest combined.
On April 22, 2024, the Company entered into a second agreement with the Investor, pursuant to which the Company sold the investor an unsecured original issuance discount promissory note in the principal amount of $96,000 (the “April Promissory Note”). The Company received net proceeds of $75,000 in consideration of issuance of the April Promissory Note after original issue discount of $16,000 and legal fees of $5,000. The aggregate debt discount of $21,000 is amortized to interest expenses over the respective term of the note. The April Promissory Note incurs a one-time interest charge of 12% which is added to the principal balance, has a maturity date of February 28, 2025, and requires monthly payments commencing October 2024. The April Promissory Note may be convertible into common shares of the Company at any time following an event of default at a rate of 65% of the lowest trading price of the Company’s common stock during the ten prior trading days. In addition, upon default, the Company must repay an amount equal to 150% of the then outstanding amount of principal and accrued interest combined. The April Promissory Note also provides that in the event of default in any other agreement signed by the Company and the Investor (including the February Promissory Note) the April Promissory Note shall at the Investor option, also be considered to be in a state of default.
As of September 2024, the Company failed to pay the September 2024 repayment amount under the February Promissory Note resulting in default of the February Promissory Note and April Promissory Note and calculated the balance of the notes payable at $206,000 and $154,000, respectively, recording a loss of $120,000 as result of the default to pay principal and interest of the February Promissory Note and April Promissory Note.
On May 14, 2025, the Company entered into a Settlement Agreement and Mutual Release (the “1800 Agreement”) with 1800 Diagonal Lending, LLC for the obligations under the February Promissory Note and the April Promissory Note. According to the 1800 Agreement the Company will pay $112,500, for the full release from all liabilities associated with the related judgment and promissory notes.
On May 27, 2025, full payment of $112,500 was made and on June 6, 2025, the reserve of shares held at the transfer agent were retired.
ITEM 4. MINE SAFETY DISCLOSUES.
Not applicable.
18
PART II
ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASE OF EQUITY SECURITIES
Market Information
Our common stock was previously traded on the NASDAQ and OTC Markets with the symbol CUEN. A class of our warrants were traded with the symbol CUENW. Currently CUEN and CUENW are listed as “Expert Market OTC” which means the shares are only available to trade via private transactions, not on the public market. On July 2, 2025, Cuentas filed its 2024-Q2 and 2024-Q3 10Q reports as the first steps to hopefully regain compliant status and be qualified to trade on open markets.
| (i) | If the principal United States market for such common equity is not an exchange, indicate, as applicable, that any over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. Any OTC quotations represent inter-dealer prices without retail mark-up, mark-down, or commission and may not represent actual transactions. |
| (ii) | Where there is no established public trading market for a class of common equity, furnish a statement to that effect and, if applicable, state the range of high and low bid information for each full quarterly period within the two most recent fiscal years and any subsequent interim period for which financial statements are included, or are required to be included by 17 CFR 210.3-01 through 210.3-20 (Article 3 of Regulation S-X), indicating the source of such quotations. Reference to quotations shall be qualified by appropriate explanation. For purposes of this Item the existence of limited or sporadic quotations should not of itself be deemed to constitute an “established public trading market.” There is no established public trading market for our shares. Reliable high and low bid information is not available due to limited and sporadic quotations that do not reflect actual trades.” |
Holders of Common Stock and Warrants
As of December 31, 2024 our shares of common stock were held by approximately 130 record holders and our publicly-traded warrants were held by approximately three record holders.
Dividends
We have never paid any cash dividends on our shares of common stock and we do not intend to declare and pay cash dividends on our shares of common stock in the foreseeable future.. We intend to reinvest any earnings for the development and expansion of our business. The payment of cash dividends on our shares of common stock is subject to the discretion of our Board of Directors, based upon the Board’s assessment of:
| ● | our financial condition; |
| ● | earnings; |
| ● | need for funds; |
| ● | capital requirements; |
| ● | prior claims of preferred stock to the extent issued and outstanding; |
| ● | covenants in any loan or other credit facilities we may enter into in the future; and |
| ● | other factors, including any applicable laws. |
19
Securities Authorized for Issuance under Equity Compensation Plans
The following table sets forth information as of December 31, 2024 relating to all our equity compensation plans:
| 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)) | |||||||||
| (a) | (b) | (c) | ||||||||||
| Equity compensation plans approved by security holders | 354,381 | 8.78 | 407,927 | |||||||||
| Equity compensation plans not approved by security holders | - | - | ||||||||||
| Total** | 354,381 | 8.78 | 407,927 | |||||||||
Stock Option Plans
The Company has two stock option plans, which are intended to provide incentives in the form of equity grants which will attract, retain and motivate highly competent persons as officers, employees and non-employee director, of, and consultants to, the Company and its subsidiaries and affiliates and to assist in further aligning the interests of the Company’s officers, employees and consultants to those of its other stockholders. The plans are administered by the Compensation Committee of the Board.
On June 17, 2021 the Board of the Company adopted the Cuentas Inc. 2021 Share Incentive Plan (the “2021 Plan”), which was approved by the Company’s shareholders at the Annual Meeting of Shareholders on December 15, 2021. The maximum number of shares authorized for issuance under the 2021 Plan is 242,308 shares (after giving effect to the reverse stock split effected in March 2023). See Note 9 to the Company’s financial statements for information concerning stock options granted pursuant to the 2021 Plan
On November 17, 2023, the Board of Directors of the Company approved the 2023 Share Incentive Plan (the “2023 Plan”), which was approved by the shareholders during the Annual Shareholders Meeting held on December 20, 2023. The maximum number of shares of stock reserved and available for issuance under the 2023 Plan is 520,000 shares. The purpose of the 2023 Plan is to provide incentives which will attract, retain and motivate highly competent persons as officers, employees and non-employee directors, of, and consultants to, the Company and its subsidiaries and affiliates. See Note 9 to the Company’s financial statements for information concerning stock options granted pursuant to the 2023 Plan . The Plan is still active but no options have been converted to date.
20
Penny Stock Regulations
The SEC has regulations which generally define so-called “penny stocks” to be equity securities that have a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. Our common stock is a “penny stock” and is subject to Rule 15g-9 under the Exchange Act, or the Penny Stock Rule. This rule imposes additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers and “accredited investors” (generally, individuals with a net worth in excess of $1,000,000 or annual incomes exceeding $200,000, or $300,000 together with their spouses). For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell our securities and may affect the ability of purchasers to sell any of our securities in the secondary market, thus possibly making it more difficult for us to raise additional capital.
For any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in penny stock, of a disclosure schedule required by the SEC relating to the penny stock market. Disclosure is also required to be made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.
There can be no assurance that our common stock will qualify for exemption from the Penny Stock Rule. In any event, even if our common stock were exempt from the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the SEC the authority to restrict any person from participating in a distribution of penny stock, if the SEC finds that such a restriction would be in the public interest.
Recent Sales of Unregistered Equity Securities
During the fourth quarter of 2024, we did not have any sales of equity securities in transactions that were not registered under the Securities Act of 1933, as amended, that have not been previously reported in a report filed pursuant to the Exchange Act.
On September 22, 2025 and October 1, 2025, the Company issued convertible notes to World Mobile Group Ltd. for $260,000 and $125,000, respectively. On October 17, 2025, the Company issued unsecured convertible notes to Shalom Arik Maimon ($586,087.62), Schulman ($112,900.11) and AM Law ($308,000). Each issuance was made in transactions not involving a public offering in reliance on Section 4(a)(2) and/or Regulation D. Any shares issuable upon conversion have not been registered and may not be offered or sold absent registration or an applicable exemption.
Subsequent to December 31, 2024
Recent Sales of Unregistered Securities. On September 22, 2025 and October 1, 2025, the Company issued convertible promissory notes in principal amounts of $260,000 and $125,000, respectively, to World Mobile Group Ltd. (aggregate $385,000). On October 17, 2025, the Company issued unsecured convertible promissory notes to Shalom Arik Maimon ($586,087.62), Schulman ($112,900.11), and AM Law ($154,000). Each issuance was made in a transaction not involving a public offering in reliance on Section 4(a)(2) of the Securities Act and/or Regulation D. The investors represented that they are sophisticated and/or accredited investors, and the transactions did not involve general solicitation. Any shares of common stock issuable upon conversion of the notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption.
On September 18, 2025, the Company issued a secured convertible promissory note to Michael De Prado in the principal amount of $473,000, convertible at $0.42 per share, with piggyback registration rights. The issuance was made in a transaction not involving a public offering in reliance on Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D. The holder represented accredited status and the transaction did not involve general solicitation.
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ITEM 6. [RESERVED]
Not applicable.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Except for the historical information, the following discussion contains forward-looking statements that are subject to risks and uncertainties. We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this report. Our actual results or actions may differ materially from these forward-looking statements for many reasons, including the risks described in Item 1A Business -- Risk Factors” and elsewhere in this annual report. Our discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and related notes and with the understanding that our actual future results may be materially different from what we currently expect.
OVERVIEW AND OUTLOOK
The Company was incorporated under the laws of the State of Florida on September 21, 2005 to act as an operational company and as a holding company for its subsidiaries. Its subsidiary is Meimoun and Mammon, LLC (100% owned) (“M&M”) provides wholesale telecommunications services. The Company also own 50% of CUENTASMAX LLC, which installs WiFi6 shared network (“WSN”) systems in locations in the New York metropolitan tristate area using access points and small cells to provide users with access to the WSN. WSN equipment was installed in several sites and financial viability is being studied. Results from these test sites will determine if future installations will be completed. Additionally, Cuentas is evaluating the synergy between CuentasMAX and World Mobile’s platform for potential integration and further development or enhancement of platforms.
The Company is focusing its business mainly on Cuentas Mobile, the Company’s Cellular Telecommunications solution.
On August 12 2024, the Company and InComm mutually agreed to sunset the processing agreement that supported the Cuentas Prepaid Mastercard® program. In connection with the wind-down, InComm issued a $475,000 credit to Cuentas in full and final settlement of all obligations under the processing agreement. The Company recognized the credit as other income in the third quarter of 2024. No further liabilities remain outstanding, and all prepaid card accounts were deactivated on or before that date.
22
Since the first quarter of 2023, we have made equity investments in real estate projects in Florida under the name Cuentas Casa. Cuentas Casa partners with leading edge developers and construction technology companies to create sustainable, inclusive and affordable residential communities specifically designed to provide high quality housing alternatives at extremely competitive pricing. Our goal was to source land zoned and ready for development of multi-family buildings in strategic areas where rental prices are increasing dramatically, placing financial stress and pressure on working class families. Our real estate investments were intended to broaden our reach into the unbanked, underbanked and underserved communities by using a patented, low cost, sustainable technology that should allow us to provide reasonably priced rental apartments to working class residents who have been priced out of rental communities due to severe rent hikes in Florida and other areas in the United States. We believed that providing affordable apartments to the Hispanic Latino and other immigrant communities in Florida will enable us to introduce them our fintech solutions and generate revenue. Due to liquidity issues impeding the operation and development of its core mobile fintech and carrier services, on April 3, 2024, the limited liability company in which Cuentas had a 63.9% equity interest (“Brooksville Development Partners, LLC” or “BDP”), entered into an agreement to sell the vacant land located in Brooksville, Florida (the “Brooksville Property”) The Brooksville Property was originally purchased by BDP on April 28, 2023 for $5.05 million, $2 million of which was contributed by Cuentas. On May 27, 2025, Cuentas sold its 63.9% equity interest in the Brooksville Property for $800,000 to Brooksville FL Partners, LLC (the “Buyer”), an existing minority member of BDP. The funds were distributed by a mutually agreed escrow agent, and Cuentas settled debts with 4 major creditors. The remaining funds were used for operating expenses. With these funds, the Company was able to settle debts totaling approx. $1.132M with 4 major creditors for final actual cost of $666,356
Subsequent developments.
On September 22, 2025 and October 1, 2025, the Company entered into two Convertible Note Purchase Agreements with World Mobile Group Ltd. for an aggregate principal amount of $385,000—$260,000 on September 22, 2025 and $125,000 on October 1, 2025. The notes are convertible into shares of the Company’s common stock pursuant to their terms, and the closings occurred on the respective dates. As conditions to closing, the Company delivered an irrevocable transfer-agent instruction letter and reserved shares for conversions. The September 22 agreement provides the investor the right to designate one director while it and its affiliates beneficially own at least 5% of the Company and includes certain protective approval rights tied to covenant and event-of-default actions. The Company agreed to use a portion of proceeds to (i) pay $110,000 to Michael De Prado in connection with his separation and (ii) fund professional fees to bring SEC reporting current; the October 1 agreement provides that proceeds will be applied to the “Plum Contract.”
On September 18, 2025, the Company and Michael De Prado executed a Confidential Separation Agreement and related financing documents. The Company agreed to pay $110,000 in cash and issued two secured promissory notes: (i) a $473,000 note bearing interest at 2.0% per annum, maturing upon the earlier of a qualified financing of at least $2,000,000 or one year from issuance (18% default interest), with the holder’s right to convert up to 50% into common stock at $0.42 per share; and (ii) a $200,000 note maturing one year from issuance, with the holder’s option at maturity to require either full cash payment or transfer, via certificate of sale, of all non-telecom/MVNO assets comprising the Company’s Fintech division (no cash interest unless in default; 8% default interest). Each note is secured by a first-priority security interest in the Company’s Fintech (non-MVNO) assets under separate security agreements. These agreements were fully consummated on October 21, 2025 upon release of escrowed deliverables by the escrow agent.
Also on September 18, 2025, the Company entered into a 16-month license with Mr. De Prado granting use and access to the Fintech assets (as detailed in Schedule A); MVNO assets are excluded. The Fintech assets are held in escrow by AM Law pending the holder’s exercise of the Note Two option.
On October 17, 2025, the Company issued three additional unsecured convertible promissory notes: (i) to Shalom Arik Maimon (CEO) for $586,087.62; (ii) to Schulman for $112,900.11; and (iii) to AM Law for $308,000. Each bears interest at 2% per annum (default interest as provided in the notes), is convertible at the holder’s option at $0.42 per share, and includes piggyback registration rights. After issuance, Mr. Maimon instructed conversion of 50% of his note ($293,043.81) into 697,723 shares, and AM Law instructed conversion of 50% of its note ($154,000) into 366,666 shares, in each case at $0.42 per share.
23
RESULTS OF OPERATIONS
Comparison of year ended December 31, 2024 to year ended December 31, 2023
Revenue
The Company generates revenues through the sale and distribution of Digital products, General Purpose Reloadable Cards, wholesale telecommunication services and other related telecom services. Revenues during the year ended December 31, 2024, totaled $676,000 compared to $2,346,000 for the year ended December 31, 2023. The decrease in our revenues was mainly from decrease in wholesale telecommunication services in the amount of $1,612,000,from our Bilateral Wholesale Carrier Agreement with Next Communications INC., a company controlled by Arik Maimon our Chairman of the Board and our CEO.
Revenue by product for 2024 and 2023 are as follows:
| December 31, 2024 | December 31, 2023 | |||||||
| (Dollars in thousands) | ||||||||
| Retail telecommunications | $ | 26 | $ | 87 | ||||
| Wholesale telecommunication services | 569 | 2,181 | ||||||
| Digital products and General-Purpose ‘Reloadable Cards | 81 | 78 | ||||||
| Total revenue | $ | 676 | $ | 2,346 | ||||
Costs of Revenue and Gross profit
Cost of revenues during the year ended December 31, 2024 totaled $751,000 compared to $2,733,000 for the year ended December 31, 2023.
Cost of revenue consists of the purchase of wholesale minutes for resale, related telecom platform costs and purchase of digital products in the amount of $565,000 during the year ended December 31, 2024 and $2,171,000 during the year ended December 31, 2023.
Cost of revenue also consists of costs related to the sale of the Company’s digital products and GPR Cards in the amount of $133,000 during the year ended December 31, 2024 and $210,000 during the year ended December 31, 2023. The costs related to the sale of the Company’s digital products and GPR Cards were composed mainly from the cost of the Digital products.
Gross profit (loss) by product for 2024 and 2023 are as follows:
| December 31, 2024 | December 31, 2023 | |||||||
| (Dollars in thousands) | ||||||||
| Telecommunications | $ | (44 | ) | $ | (265 | ) | ||
| Wholesale telecommunication services | 4 | 10 | ||||||
| Digital products and General Purpose Reloadable Cards | (35 | ) | (132 | ) | ||||
| Total Gross profit | $ | (75 | ) | $ | (387 | ) | ||
24
Gross profit margin for the year ended December 31, 2024 was negative for both the telecommunications segment and the digital product and general purpose reloadable cards segment but slightly positive for wholesale which by its nature has a tiny markup. The gross loss for the sale of digital product and general-purpose reloadable cards stemmed from ceasing all activities with Cuentas SDI LLC. In May 2024, the Company and Cuentas-SDI settled certain payment issues and renewed discussions and cooperation to re-open the digital distribution network and systems through Cuentas-SDI’s convenience store distribution network of over 31,000 locations, including many across the New York, New Jersey and Connecticut tri state area.
The Company’s alliance with World Mobile Group and the joint venture World Mobile should provide significant revenue and profitability due to the strength of World Mobile’s marketing, finance and technology capabilities.
Operating Expenses
Operating expenses consist of selling, general and administrative Expenses, impairments and amortization of Intangible assets as discussed below and totaled $1,941,000 during the year ended December 31, 2024, compared to $6,409,000 during the year ended December 31, 2023, representing a net decrease of $4,081.000.
Selling, General and Administrative Expenses
The table below summarizes our general and administrative expenses incurred during the periods presented: Update
| Year Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| ($ in thousands) | ||||||||
| Selling, General and Administrative Expenses: | ||||||||
| Officers’ compensation | $ | 890 | $ | 981 | ||||
| Directors fees | 167 | 150 | ||||||
| Share-based compensation | 209 | 622 | ||||||
| Professional services | 246 | 968 | ||||||
| maintenance and support services in accordance with the software maintenance agreement with CIMA | - | 120 | ||||||
| Legal fees | 54 | 663 | ||||||
| Payments in accordance with the processing service agreement with Incomm | 100 | 350 | ||||||
| Credit losses | - | - | ||||||
| Selling and Marketing | 37 | 388 | ||||||
| Settlements | - | 300 | ||||||
| Other | 196 | 1,469 | ||||||
| Total | $ | 1,899 | $ | 6,022 | ||||
Update Selling, general and administrative expenses totaled $1,899,000 during the year ended December 31, 2024, a net decrease of $4,123,000, or 68% compared to $6,022,000 during the year ended December 31, 2023. The decrease in our Selling, general and administrative expenses during the year ended December 31, 2024 compare to the year ended December 31, 2023, is primarily attributable to the decrease in the amount of $413,000 in Share-based compensation and shares issued for services expenses attributable to the decrease in the amount of our vested option in 2024 as opposed to 2023 partially mitigated by an increase in the number of shares that were issued for services and settlement, decrease in the amount of $120,000 in maintenance and support services that were provided by CIMA, decrease in the agreed payments in accordance with the processing service agreement with Incomm in the amount of $250,000 a decrease in selling and marketing expenses of $351,000 since the Company reduced significantly its selling and marketing campaigns in 2024 due to its ineffectiveness and lack of resources.
25
Amortization and impairment of Intangible assets
Amortization of Intangible assets totaled $2,000 during the year ended December 31, 2024 and $11,000 during the year ended December 31, 2023.
Other Income (Expenses)
Other income (expenses) totaled an expenses of $1,316,000 during the year ended December 31, 2024. Other income (expenses) are mainly comprised of Loss on impairment of held for sale investment in unconsolidated entities in amount of $1,216,000, loss on impairment of investment in unconsolidated entity of $700,000 and Loss upon default to pay principal and interest of Promissory Notes in amount of $419,000, partially offset by Gain from Change in fair value of derivative warrants liability issued as part of our February 2023 and August 2023 security offering in amount of $695,000 and gain from settlement of liabilities, net of $507,000.
Other income (expenses) totaled an income of $4,300,000 during the year ended December 31, 2023. Other income (expenses) are mainly comprised of Gain from Change in fair value of derivative warrants liability issued as part of our February 2023 and August 2023 security offering as detailed in note 10 of the December 31, 2023 financial statements in amount of $4,741,000, partially offset by impairment loss of $441,000 which resulted from a decrease in cost of an investment in Cuentas SDI LLC.
Net Loss
We incurred a net loss of $3,309,000 for the year ended December 31, 2024, as compared to a net loss of $2,196,000 for the year ended December 31, 2023, for the reasons described above.
Liquidity and Capital Resources
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures.
As of December 31, 2024, the Company had total current assets of $1,111,000, including $15,000 of cash, accounts receivables of $271,000, Investment in unconsolidated entities held for sale of $800,000. As of December 31, 2024, the Company had total current liabilities of $4,349,000 creating a negative working capital of $3,193,000.
As of December 31, 2023, the Company had total current assets of $1,760,000, including $205,000 of cash, accounts receivables of $1,307,000, related parties in the amount of $172,000 and other current assets of $76,000. As of December 31, 2023, the Company had total current liabilities of $ 4,689,000 creating a negative working capital of $2,929,000.
Cash Flows – Operating Activities Update
The Company’s operating activities for the year ended December 31, 2024, resulted in net cash used of $598,000. Net cash used in operating activities consisted of a net loss of $3,309,000 partially offset by non-cash expenses consisting of share-based compensation of $209,000, impairment of intangible assets and property and equipment of $30,000 and amortization of intangible assets of $2,000. a Decrease in accounts receivables of $1,036,000, increase in accounts payables of 625,000, decrease in other accounts liabilities of 739,000, impairment of an investment in an unconsolidated entity of $1,916,000,
The Company’s operating activities for the year ended December 31, 2023, resulted in net cash used of $4,193,000. Net cash used in operating activities consisted of a net loss of $2,196,000 and change in fair value of derivative warrants liability of $6,852,000, partially offset by non-cash expenses consisting of Issuance expenses and a day-one loss on derivative warrants liability of $3,127,000, share-based compensation of $622,000, and amortization of intangible assets of $11,000. Changes in operating assets and liabilities provided cash of $529,000, resulting mainly from a decrease in other accounts payables of $1,548,000 and increase in accounts payables offset by an increase of in related parties accounts receivables of $1,102,000 and an increase in other current assets of $87,000.
Cash Flows – Investing Activities Update
The Company’s investment activities for the year ended December 31, 2024, resulted in net cash received of $92,000 and net cash used of $2,098,000 for the same period in 2023. The decrease was mainly due to the sale of Cuentas’ 19.99% participation in Cuentas SDI LLC.
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Cash Flows – Financing Activities Update
The Company’s financing activities for the year ended December 31, 2024, resulted in net cash in the amount of $316,000 mainly from Short term loans received.
To date, we have principally financed our operations through the sale of our Common Stock. Nevertheless, management anticipates that our current cash and cash equivalents position and generating revenue from the sales of our mobile phone services and digital products will provide us limited financial resources for the near future to continue implementing our business strategy of further developing our mobile services and digital products, enhance our digital products offering and increase our sales and marketing. Management has taken important steps to reduce the financial burn rate and has curtailed some ineffective marketing programs, concentrating on those programs that have been proven to produce good results. Reduction of some top-level personnel has brought savings to the company as current executives took over the vacant positions at no additional cost to the Company but offset by the bonuses. Management plans to secure additional financing sources, including but not limited to the sale of our Common Stock in future financings. There can be no assurance, however, that the Company will be successful in raising additional capital or that the Company will have net income from operations to fund its business plan for the near future or long term. As of December 31, 2024, the Company had approximately $15,000 in cash and cash equivalents, approximately $3,170,000 in negative working capital and an accumulated deficit of approximately $58,255,000. These conditions raise substantial doubt about the Company’s ability to continue as a going concern as of December 31, 2024.
On May 22, 2025, the Company signed a Membership Interest Purchase Agreement (MIPA) with Brooksville FL Partners, LLC (“Buyer”) the holder of the minority stake in Brooksville, for the sale of its full Interests in Brooksville for total consideration of $800,000. The transaction closed on May 27, 2025 and, in accordance with the terms of the MIPA, the Company directed the escrow agent to disburse a portion of the sale proceeds to satisfy four outstanding obligations owed to certain judgment and debt holders. These settlement payments were made directly by the escrow agent on behalf of the Company in connection with the closing of the transaction.’
On May 20, 2024, the Company entered into a Membership Interest Purchase Agreement (the “Agreement”) dated as of May 20, 2024 with OLB Group, Inc. (“Buyer”) whereby it acquired 19.99% of the membership interests of Cuentas SDI, LLC, a Florida limited liability company (the “LLC”) for a purchase price of $215,500. OLB made payments totaling $92,000 and a final settlement was executed on May 23, 2025 where OLB paid $25k.
Off-balance Sheet Arrangements
The Company has no off-balance sheet arrangements and does not anticipate entering into any such arrangements in the foreseeable future.
Impact of Inflation
The Company does not expect inflation to be a significant factor in operation of the business.
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Subsequent Events (through October 21, 2025)
World Mobile Financings (September 22 and October 1, 2025). On September 22, 2025 and October 1, 2025, we entered into two Convertible Note Purchase Agreements with World Mobile Group Ltd. for an aggregate principal amount of $385,000 (the “WM Notes”)—$260,000 on September 22 and $125,000 on October 1. The WM Notes are convertible into our common stock pursuant to their terms. Closings occurred on the respective agreement dates. The September 22 agreement provides the investor the right to designate one director while the investor and its affiliates beneficially own at least five percent of the Company and includes certain protective approval rights tied to note covenants and event-of-default actions. We applied part of the proceeds to pay $110,000 to Michael De Prado in connection with his separation and to fund professional fees to bring SEC reporting current; the October 1 agreement provides that proceeds will be applied to the PLUM contract, our MVNO reseller arrangement.
Michael De Prado separation; secured notes; license (September 18, 2025; consummated October 21, 2025). On September 18, 2025, we executed a Confidential Separation Agreement with Michael De Prado (then President, Executive Vice Chairman and Chief Financial Officer) under which we agreed to pay $110,000 in cash and issued two secured promissory notes: Note One in the principal amount of $473,000 and Note Two in the principal amount of $200,000. Each note is secured by a first-priority security interest in our Fintech (non-MVNO) assets under separate security agreements. Also on September 18, 2025, we granted Mr. De Prado a 16-month license to use and access the Fintech assets (as described in Schedule A), with the assets held in escrow by AM Law until the Note Two option is exercised. MVNO assets are expressly excluded. These agreements were fully consummated on October 21, 2025 upon escrow release. Note One is voluntarily convertible at $0.42 per share and includes piggyback registration rights.
Insider and advisor convertible notes (October 17, 2025). On October 17, 2025, we issued three unsecured convertible promissory notes: (i) a note to Shalom Arik Maimon (CEO) in the principal amount of $586,087.62; (ii) a note to Schulman in the principal amount of $112,900.11; and (iii) a note to AM Law in the principal amount of $154,000. Each note is voluntarily convertible at the holder’s option into common stock at a fixed price of $0.42 per share and provides piggyback registration rights.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
This item is not applicable as we are currently considered a smaller reporting company.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index to Financial Statements and Financial Statement Schedules appearing on page F-1 through F-28 of this Form 10-K.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
(b) Engagement of New Independent Registered Public Accounting Firm.
On December 20, 2023, the Annual Meetingof the Company approved the appointment of Yarel and Partner to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2024.
During the Company’s fiscal years ended December 31, 2022 and 2023 and the subsequent interim period through February 15, 2024, neither the Company nor anyone on its behalf has consulted with Yarel regarding (i) the application of accounting principles to a specific transaction, either completed or proposed or (ii) the type of audit opinion that might be rendered on the Company’s financial statements and, neither a written report nor oral advice was provided to the Company that Yarel concluded was an important factor considered by the Company in reaching a decision as to accounting, auditing or financial reporting issues, or (iii) any matter that was the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions), or (iv) any “reportable event” (as described in Item 304(a)(1)(v) of Regulation S-K).
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Management of Cuentas Inc. is responsible for maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. In addition, the disclosure controls and procedures must ensure that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial and other required disclosures.
At December 31, 2024, an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) of the Exchange Act was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based on their evaluation of our disclosure controls and procedures, they concluded that at December 31, 2024, such disclosure controls and procedures were not effective. This was due to our limited resources and deficiencies in the design or operation of our internal control over financial reporting that adversely affected our disclosure controls and that may be considered to be “material weaknesses].”
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. These internal controls over financial reporting are designed to provide reasonable assurance that the reported financial information is presented fairly, that disclosures are adequate and that the judgments inherent in the preparation of financial statements are reasonable. There are inherent limitations in the effectiveness of any system of internal controls, including the possibility of human error and overriding of controls. Consequently, an effective internal control system can only provide reasonable, not absolute, assurance with respect to reporting financial information.
Our internal control over financial reporting includes policies and procedures that: (i) pertain to maintaining records that in reasonable detail accurately and fairly reflect our transactions; (ii) provide reasonable assurance that transactions are recorded as necessary for preparation of our financial statements in accordance with generally accepted accounting principles and the receipts and expenditures of company assets are made and in accordance with our management and directors authorization; and (iii) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.
Our management conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer of the effectiveness of our internal control over financial reporting as of December 31, 2024. This evaluation was based on the framework and criteria established in the Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) (2013 Framework). Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our internal control over financial reporting was not effective as of December 31, 2024.
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Based upon such assessment, our Chief Executive Officer and Chief Financial Officer have concluded that as of December 31, 2024 our internal controls over financial reporting were not effective due to the following material weaknesses identified:
| ● | Lack of appropriate segregation of duties, |
| ● | Lack of information technology (“IT”) controls over revenue, and |
| ● | Lack of adequate review of internal controls to ascertain effectiveness, and |
| ● | Lack of control procedures that include multiple levels of supervision and review. |
The Company’s management, including the Chief Executive Officer and Principal Financial Officer, do not expect that its disclosure controls or internal controls will prevent all errors or all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.
Implemented or Planned Remedial Actions in response to the Material Weaknesses
The deficiencies identified above are in large part due to our limited resources and deficiencies in the design or operation of our internal control over financial reporting that adversely affected our disclosure controls and that may be considered to be “material weaknesses.”
We plan, if our available cash will increase, to seek to recruit individuals responsible for identifying reportable developments and to implement procedures designed to remediate the material weakness by focusing additional attention and resources in our internal accounting functions. However, the material weakness will not be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
This report shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. The rules of the SEC do not require an attestation of the Management’s report by our registered public accounting firm in this annual report.
Changes in Internal Control over Financial Reporting
On June 30, 2025 our former Chief Financial Officer Mr. Zakai resigned from his position as Company’s CFO. On July 1, 2025, our Board of directors approved the nomination of Mr. Michael De Prado as Company’s Interim CFO. On July 1, 2025, our Board of directors approved the nomination of Mr. Michael De Prado as Company’s Interim CFO. On November 6, 2025, our Board of directors approved the nomination of Mr. Ofek Suchard as Company’s Interim CFO
ITEM 9B. OTHER INFORMATION
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers
The names of our director and executive officers and their ages, positions, and biographies are set forth below. Our executive officers are appointed by, and serve at the discretion of, our board of directors.
On October 21, 2025, Michael De Prado resigned as President, Executive Vice Chairman and Chief Financial Officer. In connection with his separation, the Company paid $110,000 in cash and issued two secured promissory notes as described in Item 5 and Note X. Mr. De Prado’s resignation did not involve any disagreement with the Company on any matter relating to operations, policies or practices. The Board has initiated a process to identify qualified Chief Financial Officer candidates.
On October 22, 2025, the Board appointed Ofek Suchard as Interim Chief Financial Officer, and he now serves as the Company’s principal financial and principal accounting officer, effective as of that date. The Board continues its process to identify and evaluate candidates for a permanent Chief Financial Officer.
Directors and Executive Officers
Set forth below is information regarding our current directors and executive officers. Each director holds his office until he resigns or is removed and his successor is elected and qualified
| Name | Age | Position | ||
| Arik Maimon | 48 | Chairman of the Board of Directors and CEO | ||
| Ofek Suchard | 25 | Interim Chief Financial Officer as of October 22, 2025 | ||
| Shlomo Zakai | 53 | CFO resigned 6/30/25 | ||
| Adiv Baruch | 61 | Director | ||
| Haim Yeffet | 73 | Director | ||
| Lexi Terrero | 51 | Director |
Directors and Executive Officers
Arik Maimon, our Chairman, is a founder, the Chief Executive Officer and Chairman of the Board. Mr. Maimon served as the Company’s CEO from 2016 to February 2021 and as Interim CEO from February 2021 to August 2023. In addition to co-founding the Company, Mr. Maimon founded the Company’s subsidiaries Cuentas Mobile, and M&M. Prior to founding the Company and its subsidiaries, Mr. Maimon founded and ran successful telecommunications companies operating primarily in the United States and Mexico. In 1998, Mr. Maimon founded and ran a privately-held wholesaler of long-distance telecommunications services which, later, under Mr. Maimon’s management, grew from a start up to a profitable enterprise with more than $100 million in annual revenues. Mr. Maimon serves on the Company’s Board of Directors due to the perspective and experience he brings as our co-founder, Chairman and Chief Executive Officer. Effective October 21, 2025, Shalom Arik Maimon began serving as Interim Chief Financial Officer.
Michael A. De Prado is a founder, the President and Vice Chairman of the Board. Mr. De Prado also served as its President from 2016 to February 2021, and as Interim President from February 2021 to August 2023. Acting CFO after 6/30/25Prior to founding the Company, Mr. De Prado spent 20 years in executive positions at various levels of responsibility in the banking, technology, and telecommunications industries. As President of Sales at telecommunications company Radiant/Ntera, Mr. De Prado grew Radiant/Ntera’s sales to more than $200 million in annual revenues. At theglobe.com, Mr. De Prado served as President, reporting directing to Michael S. Egan. Mr. De Prado serves on the Company’s Board of Directors due to the perspective and experience he brings as our co-founder and President On October 21, 2025, Michael De Prado resigned as President, Executive Vice Chairman and Chief Financial Officer.
Shlomo Zakai has served as our Chief Financial Officer from October 2023 to June 2025. Mr. Zakai brings extensive and proven experience in similar positions with companies operating in international markets and related industries. Zakai has served as chief financial officer of UAS Drone Corp. (OTC: USDR) since May 2020, as the Chief Financial Officer of Save Foods, Inc. (SAFO:OTC) (August 2017 to December 2021), Sonovia Ltd. (NNTTF:OTC) (October 2014 to August 2020) and of Todos Medical Ltd. (TOMDF:OTC) (February 2017 till January 2018). Prior to that, Mr. Zakai worked as an accountant for nine years at Kost, Forer, Gabbay & Kasierer, an independent registered public accounting firm and a member firm of Ernst & Young Global, where he last served as a Senior Manager and worked with technology companies publicly traded on the Nasdaq Stock Market and on the Tel Aviv Stock Exchange. Mr. Zakai holds a B.A. in accounting from the College of Management in Rishon Le’Zion, Israel. On June 30, 2025 our former Chief Financial Officer Mr. Zakai resigned from his position as Company’s CFO. On July 1, 2025, our Board of directors approved the nomination of Mr. Michael De Prado as Company’s CFO.
Adiv Baruch is a global leader anchors in the Israeli high-tech industry as well as the Chairman of Israeli Export and International cooperation Institute and several private and public companies. Mr. Baruch has over 28 years of experience in equity investment and operation management under distress. Mr. Baruch also serves as chairman of Jerusalem Technology Investments Ltd. He also currently serves as Chairman of Maayan Ventures, a platform for investments in innovative technology companies. Mr. Baruch has served as a director of the Bank of Jerusalem, and he served as CEO of BOS Better Online Solutions, which, under this leadership, grew into a highly successful company traded on Nasdaq under the symbol BOSC. Throughout his career, he has championed development and support of new talent in the high tech and entrepreneurial arenas. He is a Technion graduate and the Chairman of the Institute of Innovation and Technology of Israel. Mr. Baruch is qualified to serve as a director of the Company because of the perspective and experience he brings to our Board.
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Lexi Terrero is a marketing and financial executive with over 15 years of experience in digital media, investor relations and private equity. Ms. Terrero is qualified to serve as a director of the Company because of her deep industry knowledge of marketing and business development, sales development, raising capital, finance, and operational management. She received a BS in Finance and an MBA in Interdisciplinary Business from St. John’s University in New York City.
Haim Yeffet has owned and managed 10 restaurants and served as the CEO of a public company. He is involved in his condo board at the Alexander in Miami Beach, and has served as the Vice President and as Secretary for the association for the last three years. Mr. Yeffet is qualified to serve as a director of the Company because of his business experience, including his experience as CEO of a public company.
Ofek Suchard serves as Interim Chief Financial Officer and is trained as both a mechanical engineer and a software engineer. Mr. Suchard brings a broad background across real estate development, engineering, and advanced technology. In addition to his role at Cuentas, he serves as Chief Technical Officer of EnSima, where he leads technical development and coordination for the EnSima Miami project—a 475-unit, 95,000 sq. ft. mixed-use development. Prior to joining Cuentas, Mr. Suchard founded ReThink, an AI-driven construction-technology company focused on improving efficiency and reducing operational waste for contractors. Earlier in his career, he worked as a Sales Engineer with Trane, supporting complex HVAC system design for mechanical contractors and engineering firms, and previously served as a Project Engineer on major commercial, residential, industrial, and military projects. His combined experience in engineering, finance, software development, and project management provides Cuentas with cross-disciplinary leadership as the Company advances its strategic and operational goals.
Family Relationships
There are no family relationships, or other arrangements or understandings between or among any of the directors, director nominees, executive officers or other person pursuant to which such person was selected to serve as a director or officer.
Indemnification of Directors and Officers
Our Articles of Incorporation and Bylaws both provide for the indemnification of our officers and directors to the fullest extent permitted by Florida law.
Limitation of Liability of Directors
Pursuant to the Florida Statutes, our Articles of Incorporation exclude personal liability for our Directors for monetary damages based upon any violation of their fiduciary duties as Directors, except as to liability for any breach of the duty of loyalty, acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or any transaction from which a Director receives an improper personal benefit. This exclusion of liability does not limit any right which a Director may have to be indemnified and does not affect any Director’s liability under federal or applicable state securities laws. We have agreed to indemnify our directors against expenses, judgments, and amounts paid in settlement in connection with any claim against a Director if he acted in good faith and in a manner he believed to be in our best interests.
Election of Directors and Officers
Directors are elected to serve until the next annual meeting of shareholders and until their successors have been elected and qualified. Officers are appointed to serve until the meeting of the Board following the next annual meeting of shareholders and until their successors have been elected and qualified.
Involvement in Certain Legal Proceedings
No Executive Officer or Director of the Corporation has been the subject of any Order, Judgment, or Decree of any Court of competent jurisdiction, or any regulatory agency permanently or temporarily enjoining, barring suspending or otherwise limiting him/her from acting as an investment advisor, underwriter, broker or dealer in the securities industry, or as an affiliated person, director or employee of an investment company, bank, savings and loan association, or insurance company or from engaging in or continuing any conduct or practice in connection with any such activity or in connection with the purchase or sale of any securities.
No Executive Officer or Director of the Corporation has been convicted in any criminal proceeding (excluding traffic violations) or is the subject of a criminal proceeding which is currently pending.
No Executive Officer or Director of the Corporation is the subject of any pending legal proceedings.
Corporate Governance
Board of Directors
We currently have five directors serving on our Board of Directors. A majority of the authorized number of directors constitutes a quorum of the Board for the transaction of business.
Board Committees and Director Independence
Director Independence
Of our current directors, we have determined that Messrs. Baruch and Yeffet, as well as Ms. Terrero, are “independent” as defined by applicable rules and regulations. The Company is in the process to interviewing additional potential Independent Directors to fill additional board positions with goals of Gender, Age and Racial diversity as well as Cyber protection experience as indicated by the SEC to be important goals.
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The following table sets forth certain information concerning the annual compensation of our independent directors during the last two fiscal years. Non-employee directors receive $50,000 per annum and the chairman of the Audit Committee and Compensation Committee receives an additional $16,000 per annum. The following table sets forth certain information concerning the annual compensation of our independent directors during the last two fiscal years.
| Name and Principal Position | Year | (c) Fee | Bonus | Option Awards | share compensation | Nonqualified deferred compensation earnings | All Other Compensation | Total Compensation |
||||||||||||||||||||||||
| Adiv Baruch | 2024 | $ | 67,000 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 67,000 | |||||||||||||||||
| 2023 | $ | 67,000 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 67,000 | ||||||||||||||||||
| Haim Yeffet | 2024 | $ | 50,000 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 50,000 | |||||||||||||||||
| 2023 | $ | 45,192 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 45,192 | ||||||||||||||||||
| Lexi Terrero | 2024 | $ | 50,000 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 50,000 | |||||||||||||||||
| 2023 | $ | 50,000 | $ | - | $ | 9,100 | $ | - | $ | - | $ | - | $ | 59,100 | ||||||||||||||||||
Ms. Terrero was appointed a director on December 30, 2022 and Mr. Yeffet was appointed a director on February 2, 2023
Board Committees
Our Board of Directors has established two standing committees—Audit and Compensation. Each committee operates under a charter that has been approved by our Board of Directors.
Audit Committee
Our Board of Directors has an Audit Committee composed of Mr. Baruch, Mr. Yeffet and Ms. Terrero, each of whom is an independent director as defined in accordance with section Rule 10A-3 of the Exchange Act and the rules of Nasdaq. Mr. Baruch serves as chairman of the Audit Committee. The Board of Directors has determined that Mr. Baruch possesses accounting or related financial management experience that qualifies him as financially sophisticated within the meaning of Rule 4350(d)(2)(A) of the Nasdaq Marketplace Rules and that he is an “audit committee financial expert” as defined by the rules and regulations of the SEC.
Our Audit Committee oversees our corporate accounting, financial reporting practices and the audits of financial statements. For this purpose, the Audit Committee has a charter (which will be reviewed annually) and performs several functions. The Audit Committee:
| ● | evaluates the independence and performance of, and assesses the qualifications of, our independent auditor and engages such independent auditor; |
| ● | approves the plan and fees for the annual audit, quarterly reviews, tax and other audit-related services and approves in advance any non-audit service and fees therefor to be provided by the independent auditor; |
| ● | monitors the independence of the independent auditor and the rotation of partners of the independent auditor on our engagement team as required by law; |
| ● | reviews the financial statements to be included in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and reviews with management and the independent auditors the results of the annual audit and reviews of our quarterly financial statements; |
| ● | oversees all aspects of our systems of internal accounting and financial reporting control and corporate governance functions on behalf of the board; and |
| ● | provides oversight assistance in connection with legal, ethical and risk management compliance programs established by management and the board, including compliance with requirements of Sarbanes-Oxley and makes recommendations to the Board of Directors regarding corporate governance issues and policy decisions. |
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Compensation Committee
Our Board of Directors has a Compensation Committee composed of Messrs. Baruch and Yeffet, each of whom is independent in accordance with rules of Nasdaq. Mr. Baruch is the chairman of the Compensation Committee. Our Compensation Committee reviews or recommends the compensation arrangements for our management and employees and also assists the Board of Directors in reviewing and approving matters such as company benefit and insurance plans, including monitoring the performance thereof. The Compensation Committee has a charter, which will be reviewed annually.
Nomination of Directors
Our Board of Directors, by resolution of the full Board of Directors addressing the nominations process and such related matters as may be required under the federal securities laws, has charged the independent directors constituting a majority of our Board of Directors with the responsibility of reviewing our corporate governance policies and with proposing potential director nominees to the Board of Directors for consideration. The independent directors will consider director nominees recommended by security holders.
Code of Business Conduct and Ethics and Insider Trading Policy
Our Board of Directors has adopted a Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions and an Insider Trading Policy. We will provide a copy of our Code of Business Conduct and Ethics to any person without charge, upon written request to our Compliance Officer, at Cuentas Inc., 235 Lincoln Road, Suite 210, Miami Beach, Florida, 33139.
Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers and persons who own more than 10% of our outstanding shares of Common Stock (collectively, “Reporting Persons”) to file with the SEC initial reports of ownership and reports of changes in ownership in our Common Stock and other equity securities. To the Company’s knowledge, based solely on its review of Forms 3 and 4 filed electronically with the SEC during the registrant’s most recent fiscal year, the Company believes that during its fiscal year ended December 31, 2023, all filing requirements applicable to the Reporting Persons were timely met, except that Messrs. Yeffet and Zakai failed to file Form 3s.
Shareholder Communications
Although we do not have a formal policy regarding communications with the Board, shareholders may communicate with the Board by writing to us at 235 Lincoln Rd., Suite 210, Miami Beach, FL 33139, Attention: Stockholder Communication. Stockholders who would like their submission directed to a member of the Board may so specify, and the communication will be forwarded, as appropriate.
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth for the last two fiscal years certain information concerning the annual compensation of our Chief Executive Officer and our other executive officers whose compensation was in excess of $100,000 during the year ended December 31, 2024.
| (a) Name and Principal Position | (b) Year | (c) Salary | (d) Bonus | (f) Option Awards | (g) Non-equity incentive plan compensation | (h) Nonqualified deferred compensation earnings | (i) All Other Compensation | (j) Total Compensation | ||||||||||||||||||||||||||||
| Arik Maimon | 2024 | $ | 295,000 | $ | - | $ | 72,171 | $ | - | $ | - | $ | - | $ | 367,171 | |||||||||||||||||||||
| Executive Chairman and Chief Executive Officer | 2023 | $ | 295,000 | $ | 100,000 | $ | 162,265 | $ | - | $ | - | $ | - | $ | 557,265 | 2023 | ||||||||||||||||||||
| Michael De Prado | 2024 | $ | 275,000 | $ | - | $ | 58,362 | $ | - | $ | - | $ | - | $ | 333,362 | |||||||||||||||||||||
| Executive Vice Chairman and President | 2023 | $ | 275,000 | $ | 100,000 | $ | 167,797 | $ | - | $ | - | $ | - | $ | 542,797 | |||||||||||||||||||||
agreement.
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Founder/Executive Chairman Compensation Agreement with Arik Maimon, and Founder/Executive Vice-Chairman Compensation Agreement with Michael De Prado
On August 26, 2021, the Company and Arik Maimon entered into a Founder/Executive Chairman Compensation Agreement (the “Chairman Compensation Agreement”). Additionally, on August 26, 2021, the Company and Michael De Prado entered into a Founder/Executive Vice-Chairman Compensation Agreement (the “Vice-Chairman Compensation Agreement” and collectively with the Chairman Compensation Agreement, the “Chairman Compensation Agreements”). The term of each of these Chairman Compensation Agreements became effective as of August 26, 2021 and replaces any prior arrangements or employment agreements between the Company and each of Mr. Maimon and Mr. De Prado (each such individual, an “Executive” and together, the “Executives”). Under the terms of the Chairman Compensation Agreements, the Executives agreed to be employed by the Company for an initial continuous twelve-month term beginning on the effective date of August 26, 2021, and ending on August 25, 2022. The initial term would be automatically extended for additional one (1) year periods on the same terms and conditions as set out in the Chairman Compensation Agreements; however, the Chairman Compensation Agreements, respectively, will not renew automatically if either the Company or the respective Executive provide a written notice to the other of a decision not to renew, which notice must be given at least ninety (90) days prior to the end of the initial term or any subsequently renewed one (1) year term. Pursuant to the terms of the Chairman Compensation Agreement, Mr. Maimon will receive an annual base salary of two hundred ninety-five thousand dollars ($295,000) per year, and pursuant to the terms of the Vice-Chairman Compensation Agreement, Mr. De Prado will receive an annual base salary of two hundred seventy-five thousand dollars ($275,000) per year, and each will be eligible for an annual incentive payment of up to one hundred percent (100%) of their respective base salary, which annual incentive payment shall be based on the Company’s performance as compared to the goals established by the Company’s Board of Directors in consultation with each Executive, respectively. This annual incentive shall have a twelve (12) month performance period and will be based on a January 1 through December 31 calendar year, with the Executives’ entitlement to the annual incentive and the amount of such award, if any, remaining subject to the good faith discretion of the Board of Directors. Any such annual incentive shall be paid by the end of the second quarter following the calendar year to which each respective Executive’s performance relates. Pursuant to the terms of the Chairman Compensation Agreements, each Executive has the option to have any such earned annual incentive be paid in fully vested shares of the Company’s Common Stock, but must elect such option by the end of the first quarter following the relevant performance calendar year period. In the event of a change in control of the Company, as defined under the terms of the Chairman Compensation Agreements, that takes place (i) during the term of the Chairman Compensation Agreement or (ii) prior to the date which is twenty-four (24) months from the effective date of the Chairman Compensation Agreements, if the Executive’s employment otherwise terminates prior to such date (other than if the Executive’s employment was terminated for cause or the Executive resigned his employment without good reason, as such terms are defined under the Chairman Compensation Agreements), each respective Executive shall be entitled to a bonus payment equal to two and one-half percent (2.5%) of the cash consideration received by the shareholders of the Company in the change in control transaction. Under the Chairman Compensation Agreements, each Executive is subject to certain obligations and restrictive covenants, including, but not limited to: confidentiality, non-competition, non-solicitation, and non-disparagement, among others. The Chairman Compensation Agreements are each governed by the laws of the State of Florida. The Chairman Compensation Agreements may be terminated by the Company for cause or without cause, and by each respective Executive for good reason or without good reason, as such terms are defined under the Chairman Compensation Agreements. On August 19, 2022, the Company’s Board of Directors approved a motion to appoint Arik Maimon as Interim CEO (in addition to his current position as Chairman of the Board) and Michael De Prado as Interim President (in addition to his current position as Vice Chairman of the Board). Both Arik Maimon and Michael De Prado agreed to assume these positions with no additional compensation.
On August 21, 2023, the Company entered into an employment agreement with Arik Maimon pursuant to which Mr. Maimon agreed to serve as Executive Chairman and Chief Executive Officer of the Company (the “Maimon Employment Agreement”).
Additionally, on August 26, 2023, the Company entered into an employment agreement with Michael De Prado pursuant to which Mr. De Prado agreed to serve as Executive Vice Chairman and President of the Company (the “De Prado Employment Agreement”). the “Maimon Employment Agreement” and collectively with the De Prado Employment Agreement, the “2023 Compensation Agreements”). The term of each of these 2023 Compensation Agreements became effective as of August 21, 2023 and replaces any prior arrangements or employment agreements between the Company and each of Mr. Maimon and Mr. De Prado (each such individual, an “Executive” and together, the “Executives”). Under the terms of the 2023 Compensation Agreements, the Executives 2023 Compensation Agreements are for a term of five years, subject to the early termination provisions, commencing August 21, 2023 (the “Effective Date”). The 2023 Compensation Agreements are subject to early termination upon Executives’s death, or by the Company for Cause, adjudicated incompetency or adjudicated bankruptcy, the date upon which the Company give the Executives notice of termination on account of Disability, and by the Executives in the event of an Adverse Change in Executive’s Employment Circumstances.
The salaries of Mr Maimon and Mr De Prado have been accruing since June 2024 and partial payments have been made.
On September 18, 2025, the Company entered into a separation agreement with Michael De Prado providing a cash payment of $110,000 and issuance of two secured promissory notes ($473,000 bearing interest at 2% per annum with a holder conversion right for up to 50% at $0.42 per share; and $200,000 with the holder’s option at maturity to require cash payment or transfer of specified Fintech (non-MVNO) assets). The agreements were consummated on October 21, 2025 upon escrow release.
35
Pursuant to the terms of the Maimon Employment Agreement, Mr. Maimon will receive an annual base salary of two hundred ninety-five thousand dollars ($295,000) per year, subject to increase by the Company’s by Board of Directors upon the recommendation of the Compensation Committee of the Company’s Board of Directors. Mr. Maimon is also entitled to receive as compensation for past services to and to ensure his future services to the Company, subject to shareholder approval, 131,866 shares of the Company’s common stock to increase his ownership interest in the Company to 10.0% calculated on a fully diluted basis, 50% of which shares are to be issued by the Company as soon as practicable after shareholder approval has been obtained, with the remaining 50% of the shares to be issued equally at the end of each of the three calendar years following the Effective Date. The Maimon Employment Agreement provides that if Mr. Maimon’s 10% fully diluted equity interest in the Company is reduced upon issuance by the Company of additional shares, options, or warrants of any kind or nature, the Company shall issue to Mr. Maimon additional shares in number sufficient to preserve and maintain his 10% fully diluted equity interest in the Company, with such shares to be issued under the same terms set forth above. Mr. Maimon is also entitled to a monthly automobile allowance. Mr. Maimon is eligible to participate in such benefit plans as are, or from time-to-time may be, provided by the Company for its senior executive officers.
Pursuant to the terms of the De Prado Employment Agreement Mr. De Prado will receive an annual base salary of two hundred eight-five thousand dollars ($285,000) per year, subject to increase by the Company’s by Board of Directors upon the recommendation of the Compensation Committee of the Company’s Board of Directors. Mr. De Prado is also entitled to receive as compensation for past services to and to ensure his future services to the Company, subject to shareholder approval, 117,214 shares of the Company’s common stock to increase his ownership interest in the Company to 7.0% calculated on a fully diluted basis, 50% of which shares are to be issued by the Company as soon as practicable after shareholder approval has been obtained, with the remaining 50% of the shares to be issued equally at the end of each of the three calendar years following the Effective Date. The De Prado Employment Agreement provides that if Mr. De Prado’s 7% fully diluted equity interest in the Company is reduced upon issuance by the Company of additional shares, options, or warrants of any kind or nature, the Company shall issue to Mr. De Prado additional shares in number sufficient to preserve and maintain his 7% fully diluted equity interest in the Company, with such shares to be issued under the same terms set forth above. Mr. De Prado is entitled to a monthly automobile allowance of $2,000. Mr. De Prado is also eligible to participate in such benefit plans as are, or from time-to-time may be, provided by the Company for its senior executive officers.
The Executives are eligible to receive a discretionary annual performance-based payment of up to 100% of his base salary, which performance-based payment shall be determined by the Compensation Committee of the Board of Directors based on the Company’s performance as compared to the goals established by the Compensation Committee and the Company’s management, including the Annual Budget (as defined in the Maimon Employment Agreement), in consultation with the Executives. At the discretion of the Compensation Committee, this review may be performed each fiscal quarter but not less than semi-annually, and the Performance-Based Bonus awarded, if any, may be paid accordingly. The Performance-Based Bonus shall be prorated for any partial fiscal year in which the Executive was employed by the Company. Executives shall not be entitled to receive any portion of the Annual Incentive Bonus for any year in which his employment is terminated for Cause. Pursuant to the terms of the 2023 Compensation Agreements, The Bonus shall be prorated, based on each fiscal quarter of employment, for any partial fiscal year.
Notwithstanding the limitation on the payment in cash of the Performance-Based Bonus, the Compensation Committee based upon certain criteria specified in the 2023 Compensation Agreements may at its discretion award the Executives stock or stock options as an additional Performance-Based Bonus in addition to the cash component but only an annual basis and only for fiscal years in which the Company’s financial results substantially exceed the Annual Budget.
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Engagement of Shlomo Zakai, our CFO
Shlomo Zakai has served as our Chief Financial Officer since October 2023. Mr. Zakai was entitled to $10,000 per month for his services. Mr. Zakai provides the Company with accounting, financial and general business services and advice on current standard practices and trends in his area of expertise. He resigned June 30th, 2025.
Clawback Policy
Our Board of Directors adopted a clawback policy covering our executive officers. An executive officer is our chief executive officer, president, principal financial officer, principal accounting officer (or if there is no such accounting officer, the controller), any vice-president in charge of a significant principal business unit, division, or function (such as sales, administration, or finance), any other officer who performs a policy-making function, or any other person who performs similar policy-making functions for us. As of the date of this annual report, our only executive officers are our Chairman of the Board and Chief Executive Officer, our Vice Chairman of the Board and President. and our Chief Financial Officer. The clawback policy relates to incentive-based compensation, which is any compensation that is granted, earned or vested based wholly or in part upon the attainment of a financial reporting measure. The clawback policy covers the recovery of incentive-based compensation from an executive officer only in the event that we are required to prepare an accounting restatement due to the material noncompliance of our financial reporting requirement under the United States securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. Questions as to “materiality” will be made by the Compensation Committee in coordination with the Audit Committee.
The incentive-based compensation subject to recovery is the incentive-based compensation received during the three completed fiscal years immediately preceding the date that we are required to prepare an accounting restatement as described above, provided that the person served as an executive officer at any time during the performance period applicable to the incentive-based compensation in question provided that the clawback policy shall only apply if the incentive-based compensation is received while we have a class of securities listed on Nasdaq and on or after October 2, 2023. Each of Arik Maimon, our Chairman of the Board and Chief Executive Officer, and Michael De Prado, our Vice Chairman of the Board and President, have an employment agreement which provides for incentive-based compensation during the term of their employment agreements with the Company.
Outstanding Equity Awards at Fiscal Year End
The following table sets forth information concerning the outstanding equity awards of each of the Named Executive Officers as of December 31, 2024:Update
| Name (a) | Number of Securities Underlying Unexercised Options (#) Exercisable (b) | Number of Securities Underlying Unexercised Options (#) Unexercisable (c) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d) | Option Exercise Price ($) (e) | Option Expiration Date (f) | Number of Shares or Units of Stock That Have Not Vested (#) (g) (9) | Market Value of Shares or Units of Stock That Have Not Vested ($) (h) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (i) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#) (j) | |||||||||||||||||||||||||
| Arik Maimon | 15,385 | - | - | $ | 36.40 | 15,385 at November 2, 2031 | - | - | - | $ | - | |||||||||||||||||||||||
| Arik Maimon | 15,385 | - | - | $ | 4.16 | 15,385 at December 29, 2032 | - | - | - | $ | - | |||||||||||||||||||||||
| Michael De Prado | 11,538 | - | - | $ | 36.40 | 11,538 at November 2, 2031 | - | $ | - | |||||||||||||||||||||||||
| Michael De Prado | 15,385 | - | - | $ | 4.16 | 15,385 at December 29, 2032 | - | $ | - | |||||||||||||||||||||||||
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth, as of December 31, 2024, certain information with respect to the beneficial ownership of shares of our common stock by: (i) each person known to us to be the beneficial owner of more than five percent (5%) of our outstanding shares of common stock, (ii) each director of our Company, (iii) each of our executive officers, and (iv) our directors and executive officers as a group. There were 2,730,058 shares of our common stock outstanding as of December 31, 2024.
The information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the rules of the Securities and Exchange Commission and is not necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed to own beneficially any security which such person has the right to acquire sole or shared voting or investment power within sixty (60) days through the conversion or exercise of any convertible security, warrant, option, or other right. More than one (1) person may be deemed to be a beneficial owner of the same securities. The percentage of beneficial ownership by any person as of a particular date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power within sixty (60) days, by the sum of the number of shares outstanding as of such date including the number of such shares which such person has the right to acquire. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner. Except as otherwise indicated below and under applicable community property laws, we believe that the beneficial owners of our common stock listed below have sole voting and investment power with respect to the shares shown.
Unless otherwise indicated, the address of each shareholder is c/o our Company at our principal office address, 235 Lincoln Rd., Suite 210, Miami Beach, FL 33139.
| Beneficial Owner | Number of Shares Beneficially Owned | Percent of Class | ||||||
| Shalom Arik Maimon (1) Chief Executive Officer and Chairman | 289,708 | (1) | 9.10 | % | ||||
| Michael De Prado (2) President and Vice Chairman | 202,835 | (2) | 6.31 | % | ||||
| Adiv Baruch (3) Director | 63,335 | (3) | 1.97 | % | ||||
| Lexi Terrero (4) Director | 40,000 | (4) | 1.24 | % | ||||
| Haim Yeffet (5) Director | 40,000 | (5) | 1.24 | % | ||||
| Shlomo Zakai (6) Former Chief Financial Officer | 40,000 | (5) | 1.24 | % | ||||
| All Directors and Officers as a Group (6) persons) | 675,878 | 21.01 | % | |||||
| 5% or More Shareholders | ||||||||
| Alize Irrevocable Trust | 195,420 | 6.07 | % | |||||
| Dinar Zuz LLC (6) | 207,924 | 6.47 | % | |||||
| AM LAW LLC in trust for Core Development Holdings Corp | 295,282 | 9.18 | % | |||||
| (1) | Consists of (i) 127,072 shares, (ii) options to purchase 15,385 shares, exercisable until November 2, 2031 at an exercise price of $36.40 per share, (iii) options to purchase 15,385 shares, exercisable until December 29, 2032 at an exercise price of $4.16 per share, and (iv) options to purchase 131,866 shares, exercisable until February 23, 2034 at an exercise price of $0.32 per share. |
| (2) | Consists of (i) 58,697 shares, (ii) options to purchase 11,539 shares, exercisable until November 2, 2031 at an exercise price of $36.40 per share, (iii) options to purchase 15,385 shares, exercisable until December 29, 2032 at an exercise price of $4.16 per share, and (iv) options to purchase 117,214 shares, exercisable until February 23, 2034 at an exercise price of $0.32 per share |
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| (3) | Consists of (i) 4,872 shares, (ii) options to purchase 7,693 shares, exercisable until November 2, 2031 at an exercise price of $36.40 per share, (iii) options to purchase 10,770 shares, exercisable until December 29, 2032 at an exercise price of $4.16 per share, and (iv) options to purchase 40,000 shares, exercisable until February 23, 2034 at an exercise price of $0.32 per share. |
| (4) | Consists of options to purchase 40,000 shares, exercisable until February 23, 2034 at an exercise price of $0.32 per share. |
| (5) | Consists of options to purchase 40,000 shares, exercisable until February 23, 2034 at an exercise price of $0.32 per share. |
| (6) | Consists of options to purchase 40,000 shares, exercisable until February 23, 2034 at an exercise price of $0.32 per share. |
Changes in Control
There are no arrangements, known to the Company, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the Company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Except as set forth below, since January 1, 2024, there have been no material transactions, or series of similar transactions, or any currently proposed transactions, or series of similar transactions, to which we were or are to be a party, in which the amount involved exceeds $120,000, and in which any director or executive officer, or any security holder who is known by us to own of record or beneficially more than 5% of any class of our common stock, or any member of the immediate family of any of the foregoing persons, has an interest (other than compensation to our officers and directors in the ordinary course of business).
Michael De Prado: On September 18, 2025, while serving as an executive officer, the Company entered into a Confidential Separation Agreement with Mr. De Prado, paid $110,000 in cash, issued two secured promissory notes in the principal amounts of $473,000 and $200,000, respectively, and granted a 16-month license to use Fintech (non-MVNO) assets, with such assets held in escrow by AM Law. Each note is secured by a first-priority security interest in the Company’s Fintech assets pursuant to separate security agreements. The agreements were consummated on October 21, 2025 upon escrow release. Note One is voluntarily convertible at $0.42 per share and provides piggyback registration rights.
Shalom Arik Maimon (CEO): On October 17, 2025, the Company issued an unsecured convertible promissory note to Mr. Maimon in the principal amount of $586,087.62, which is voluntarily convertible at $0.42 per share and provides piggyback registration rights. The note is voluntarily convertible at $0.42 per share and includes piggyback registration rights.
Since January 1, 2024, we made wholesale telecommunication revenues of $569,000 pursuant to a Bilateral Wholesale Carrier Agreement with Next Communications Inc., a company controlled by Arik Maimon our Chairman of the Board and our CEO. We realized a gross profit of approximately $9,000 after payment of expenses related to this transaction. We believe that the terms of this transaction were as favorable to us as could have been obtained from an unaffiliated third party.
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Related Person Transaction Approval Policy
While we have no written policy regarding approval of transactions between us and a related person, our Board, as matter of appropriate corporate governance, reviews and approves all such transactions, to the extent required by applicable rules and regulations. Generally, management would present to the Board for approval at the next regularly scheduled Board meeting any related person transactions proposed to be entered into by us. The Board may approve the transaction if it is deemed to be in the best interests of our shareholders and the Company.
All future transactions between us and our officers, directors or five percent shareholders, and respective affiliates will be on terms no less favorable than could be obtained from unaffiliated third parties and will be approved by a majority of our independent directors who do not have an interest in the transactions and who had access, at our expense, to our legal counsel or independent legal counsel.
On October 17, 2025, the Company issued unsecured convertible promissory notes to (i) Shalom Arik Maimon (CEO) for $586,087.62 and (ii) AM Law for $308,000, each bearing interest at 2% per annum, convertible at $0.42 per share, and including piggyback registration rights. After issuance, each holder elected to convert 50% of principal at $0.42 per share (Mr. Maimon: $293,043.81 into 697,723 shares; AM Law: $154,000 into 366,666 shares). The Company also issued a $112,900.11 unsecured convertible note to Schulman on October 17, 2025 on the same terms.”
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Independent Public Accounting Firm
Yarel + Partners, located in Tel Aviv, Israel, has served as the Company’s independent public accounting firm since 2023.
Audit and Accounting Fees
The following table sets forth the fees billed to our Company for professional services rendered by Yarel + Partners our independent registered public accounting firm, for fiscal years ended December 31, 2024 and 2023.
| Services | 2024 | 2023 | ||||||
| Audit fees | $ | 50,000 | $ | 50,000 | ||||
| Audit related fees | 45,000 | 45,000 | ||||||
| Tax fees | - | - | ||||||
| All other fees | - | - | ||||||
| Total fees | $ | 95,000 | $ | 95,000 | ||||
Our audit committee reviewed or ratified the engagement of the Company’s principal accountant and the fees disclosed above.
Board of Directors’ Pre-Approval Policies
Our Board of Directors’ policy is to pre-approve all audit and permissible non-audit services provided by the independent auditors. These services may include audit services, audit related services, tax services, and other services. Pre-approval is generally provided for up to one year, and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent auditors and management are required to periodically report to the board of directors regarding the extent of services provided by the independent auditors in accordance with this pre-approval and the fees for the services performed to date. The Board of Directors may also pre-approve particular services on a case-by-case basis.
Our Board of Directors reviewed our audited financial statements contained in our Annual Report on Form 10-K for the 2023 fiscal year. The Board of Directors also has been advised of the matters required to be discussed pursuant to PCAOB Rule 3526 (Communication with Audit Committees Concerning Independence), which includes, among other items, matters related to the conduct of the audit of our financial statements.
Our Board of Directors considered whether the provision of services other than audit services is compatible with maintaining auditor independence. Based on the review and discussions referred to above, the Board of Directors has determined that the audited financial statements be included in our Annual Report on Form 10-K for our 2024 fiscal year for filing with the SEC.
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PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) Consolidated Financial Statements
41
CUENTAS, INC.
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2024
CUENTAS, INC.
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2024
TABLE OF CONTENTS
_____________________
________________________________
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F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF CUENTAS, INC.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Cuentas, Inc. (the Company) as of December 31, 2024 and 2023, and the related consolidated statements of loss, comprehensive loss, stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has incurred net losses since its inception, and has not yet generated sufficient revenues to support its operations. As of December 31, 2024, there is an accumulated deficit of approximately $58.3 million and a negative working capital of approximately $3.2 million. These conditions, along with other matters as set forth in Note 1, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. We determined that there are no critical audit matters.
/s/
Yarel + Partners
Certified Public Accountants (Isr.)
November 18, 2025
We have served as the Company’s auditor since 2023
F-2
CUENTAS, INC.
CONSOLIDATED BALANCE SHEETS
(USD in thousands except share and per share data)
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | ||||||||
| Accounts Receivables – related parties | ||||||||
| Accounts Receivables - others | ||||||||
| Related parties receivables | ||||||||
| Other current assets | ||||||||
| Investment in unconsolidated entities held for sale (Note 3b) | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets | ||||||||
| Property and equipment, net | ||||||||
| Investment in unconsolidated entities (Note 3b) | ||||||||
| Intangible assets | ||||||||
| Total Non-Current Assets | ||||||||
| Total assets | ||||||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Current Liabilities | ||||||||
| Trade payable | ||||||||
| Other accounts liabilities | ||||||||
| Warrants liability, net | ||||||||
| Deferred revenue | ||||||||
| Notes and Loans payable | ||||||||
| Total Current Liabilities | ||||||||
| Non-Current Liabilities | ||||||||
| Other long-term loans | ||||||||
| Total Non-Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Stockholders’ Deficit | ||||||||
| Common stock, | ||||||||
| Additional paid-in capital | ||||||||
| Treasury Stock | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Deficit | ( | ) | ( | ) | ||||
| Total Liabilities and Stockholders’ Deficit | ||||||||
The accompanying notes are an integral part of the consolidated financial statements.
F-3
CUENTAS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(USD in thousands except share and per share data)
| Year ended | ||||||||
| December 31, | ||||||||
| 2024 | 2023 | |||||||
| Revenues from related parties | ||||||||
| Other revenues | ||||||||
| Total revenues | ||||||||
| Cost of revenues from related parties | ( | ) | ( | ) | ||||
| Other cost of revenues | ( | ) | ( | ) | ||||
| Total cost of revenues | ( | ) | ( | ) | ||||
| Gross loss | ( | ) | ( | ) | ||||
| Operating expenses | ||||||||
| Amortization of intangible assets, net | ( | ) | ( | ) | ||||
| Loss on impairment of intangible assets | ( | ) | ||||||
| Selling, general and administrative expenses | ( | ) | ( | ) | ||||
| Total operating expenses | ( | ) | ( | ) | ||||
| Operating loss | ( | ) | ( | ) | ||||
| Other income (expenses) | ||||||||
| Gain from settlement of liabilities, net | ||||||||
| Interest expenses | ( | ) | ||||||
| Loss upon default to pay principal and interest of Promissory Notes | ( | ) | ||||||
| Loss on impairment of held for sale investment in unconsolidated entities | ( | ) | ||||||
| Loss on impairment of investment in unconsolidated entities | ( | ) | ( | ) | ||||
| Loss on sale of investment in unconsolidated entity | ( | ) | ||||||
| Gain from change in fair value of derivative warrants liability, net | ||||||||
| Total other income (expenses) | ( | ) | ||||||
| Net loss before equity losses | ( | ) | ( | ) | ||||
| Equity losses in unconsolidated entities | ( | ) | ||||||
| Net loss | ( | ) | ( | ) | ||||
| Loss per share (basic and diluted) | ( | ) | ( | ) | ||||
| Basic and diluted weighted average number of shares of common stock outstanding | ||||||||
The accompanying notes are an integral part of the consolidated financial statements.
F-4
CUENTAS, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
(USD in thousands, except share and per share data)
| Number of Shares |
Amount | Additional paid-in capital |
Treasury stock | Accumulated deficit | Total stockholders’ deficit | |||||||||||||||||||
| BALANCE AT DECEMBER 31, 2022 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Issuance of Shares of Common Stock for cash, net of issuance expenses (**) | ||||||||||||||||||||||||
| Share based Compensation | ||||||||||||||||||||||||
| Issuance of Shares of Common Stock due to acquisition of an asset | ||||||||||||||||||||||||
| Treasury stock | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Reverse split | ||||||||||||||||||||||||
| Net loss for the year ended December 31, 2023 | - | ( | ) | ( | ) | |||||||||||||||||||
| BALANCE AT DECEMBER 31, 2023 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Share based Compensation | ||||||||||||||||||||||||
| Net loss for the year ended December 31, 2024 | - | ( | ) | ( | ) | |||||||||||||||||||
| BALANCE AT DECEMBER 31, 2024 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| (*) |
| (**) |
The accompanying notes are an integral part of the consolidated financial statements.
F-5
CUENTAS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(USD in thousands)
| Year ended | ||||||||
| December 31, | ||||||||
| 2024 | 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Adjustments required to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock based compensation and shares issued for services | ||||||||
| Equity losses in non-consolidated entity | ||||||||
| Loss on sale of investment in unconsolidated entities | ||||||||
| Amortization of discounts and accrued interest on loans | ( | ) | ||||||
| Loss upon default to pay principal and interest of Promissory Notes | ||||||||
| Gain from change in fair value of derivative warrants liability | ( | ) | ( | ) | ||||
| Gain from settlement of liabilities, net | ( | ) | ||||||
| Issuance expenses and a day-one loss on derivative warrants liability | ||||||||
| Loss on impairment of an investment in an unconsolidated entity | ||||||||
| Loss on impairment of intangible asset | ||||||||
| Loss on impairment of property and equipment | ||||||||
| Depreciation expense | ||||||||
| Amortization of intangible assets | ||||||||
| Changes in Operating Assets and Liabilities: | ||||||||
| Decrease (increase) in accounts receivable – related parties | ( | ) | ||||||
| Decrease in accounts receivable – other | ||||||||
| (Increase) in other current assets | ( | ) | ||||||
| Changes in related parties, net | ( | ) | ||||||
| Increase in accounts payable | ||||||||
| (Decrease) increase in other accounts liabilities | ( | ) | ||||||
| (Decrease) increase in deferred revenue | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Investment in unconsolidated entities | ( | ) | ||||||
| Proceeds from sale of an investment in unconsolidated entity | ||||||||
| Purchase of equipment | ( | ) | ||||||
| Purchase of intangible asset | ( | ) | ||||||
| Proceeds from sale of intangible asset | ||||||||
| Net cash used in investing activities | ( | ) | ||||||
| CASH FLOWS FROM FINANCE ACTIVITIES: | ||||||||
| Proceeds from issuance of common stock and warrants, net of issuance expense | ||||||||
| Short term loans received | ||||||||
| Short term loans repaid | ( | ) | ||||||
| Treasury stock | ( | ) | ||||||
| Net cash provided by finance activities | ||||||||
| (DECREASE) IN CASH AND CASH EQUIVALENTS | ( | ) | ( | ) | ||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | ||||||||
| CASH AND CASH EQUIVALENTS AT END OF YEAR | ||||||||
The accompanying notes are an integral part of the consolidated financial statements.
F-6
CUENTAS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(USD in thousands)
| Non-cash investing and financing activities: | ||||||||
| Sale of investments in an unconsolidated entity | ||||||||
| Issuance of Shares of common stock for investment in unconsolidated entity | ||||||||
| Warrants liability converted into shares of common stock | ||||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for taxes | - | |||||||
| Cash paid for interest | ||||||||
The accompanying notes are an integral part of the consolidated financial statements.
F-7
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Cuentas,
Inc. (the “Company”) was incorporated under the laws of the State of Florida on September 21, 2005. The Company, together
with its subsidiary, Meimoun and Mammon, LLC (
On May 22, 2025, the Company signed an agreement for the sale of its
full interests in Brooksville Development Partners, LLC (“Brooksville”) for total consideration of $
| On September 3, 2024, the Company signed a Non Binding Letter of Intent (LOI) with World Mobile Group Ltd (“World Mobile”), a UK limited company to leverage the World Mobile sharing economy to expand network coverage and provide affordable connectivity, while also offering Cuentas’ digital products to customers. |
Cuentas and World Mobile will collaborate to integrate Cuentas’ fintech, banking, payments, remittance, and other financial services into the World Mobile app and ecosystem. This integration aims to enhance the user experience and expand the range of available services.
World Mobile transferred $
On
April 21, 2025, the Company and World Mobile entered into a Contribution Agreement to form World Mobile LLC, a Delaware limited liability
company (the “JV Company”), as a joint venture to operate a mobile virtual network operator (“MVNO”) business.
The Company will hold a
On April 23, 2025 and May 15, 2025, Cuentas executed related letter agreements confirming the assignment of its Reseller Master Services Agreement with UVNV, Inc. (d/b/a PLUM) to the JV Company and granting the Company management of certain Cuentas Mobile brands on the JV Company platform, with respective profit/loss sharing as noted above.
GOING CONCERN
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As of December 31, 2024,
the Company had $
F-8
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 2– SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).
| A. | Use of Estimates |
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“‘US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. As applicable to the consolidated financial statements, the most significant estimates and assumptions relate to fair value of derivative warrants and fair value of stock-based compensation.
| B. | Principles of consolidation |
The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
| C. | Functional currency |
The functional currency of the company and its subsidiaries is the U.S dollar.
| D. | Cash and cash equivalents |
The Company considers all short-term investments, which are highly liquid investments with original maturities of three months or less at the date of purchase, to be cash equivalents.
| E. | Property, plant and equipment, net |
| 1. | Property and equipment are stated at cost less accumulated depreciation and amortization. The Company provides for depreciation and amortization using the straight-line method over the estimated useful lives of the related assets, which range from three to five years. Maintenance and repair costs are expensed as they are incurred while renewals and improvements which extend the useful life of an asset are capitalized. At the time of retirement or disposal of property and equipment, the cost and related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is reflected in the consolidated results of operations. |
| 2. |
% | ||||
| Vehicles |
F-9
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 2– SIGNIFICANT ACCOUNTING POLICIES (continued)
| F. | Long lived assets held for sale |
The company accounted for its long-lived assets held for sale under ASC 360-10 (“Impairment or disposal of Long-lived Assets”).
Under management decision (see Note 3b), its investment in Brooksville Development Partners, LLC. was intended to be sold.
The Company classifies an asset group (an “asset”) as held for sale in the period during which (i) the Company has approved and committed to a plan to sell the asset, (ii) the asset is available for immediate sale in its present condition, (iii) an active program to locate a buyer and other actions required to sell the asset have been initiated, (iv) the sale of the asset is probable and transfer of the asset is expected to qualify for recognition as a completed sale within one year, (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be abandoned.
The Company initially and subsequently measures a long-lived asset that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in operating loss for the period in which the held for sale criteria are met.
Upon designation as an asset held for sale, the Company assesses the fair value of assets held for sale less any costs to sell at each reporting period until the asset is no longer classified as held for sale. Realization costs of the investment in Brooksville Development Partners, LLC. are immaterial.
| G. | Impairment of Long-Lived Assets |
The Company’s long-lived assets, such as property, plant and equipment and identifiable intangible assets, are reviewed for potential impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment indicators which could trigger an impairment may include, among others, any significant changes in the manner of our use of the assets or the strategy of our overall business, certain reorganization initiatives, significant negative industry, or economic trends or when we conclude that it is more likely than not that an asset will be disposed of or sold. Long-lived assets are reviewed for impairment in accordance with ASC No. 360, “Property, Plant and Equipment,” whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by such assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. This measurement includes significant estimates and assumptions inherent in the estimate of the fair value of identifiable intangible assets. Newly acquired and recently impaired indefinite-lived assets are more vulnerable to impairment as the assets are recorded at fair value and are then subsequently measured at the lower of fair value or carrying value annually or when triggering events are present. As such, immediately after acquisition or impairment, even small declines in the outlook for these assets can negatively impact on our ability to recover the carrying value and can result in an impairment charge.
F-10
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 2– SIGNIFICANT ACCOUNTING POLICIES (continued)
| H. | Investments in equity securities |
The Company accounts for investments for which it does not have a controlling interest in accordance with ASC 323, Investments – Equity Method and Joint Ventures. The Company recognizes its pro-rata share of income and losses in the investment in “Loss from equity method investment” on the consolidated statement of operations and comprehensive loss, with a corresponding change to the investment in equity method investment in the consolidated balance sheet until such investment is reduced to zero.
The
Company accounts for its investments that represent less than
| I. | Deferred Revenue |
The Company records deferred revenue for any upfront payments received in advance of the Company’s performance obligations being satisfied. These contract liabilities consist principally of unearned new minutes fees. Changes in the deferred revenue balance are driven primarily by the number of new minutes fees recognized during the period, and the degree to which these reductions to the deferred revenue balance are offset by the deferral of new minutes fees associated with minutes sold during the period.
| J. | Revenue Recognition |
The Company follows paragraph 605-10-S99 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable and (iv) collectability is reasonably assured. The Company primarily generates revenues through the brokering of sales of minutes from one telecommunications carrier to another and to a lesser extent the sales of prepaid calling minutes to consumers through its Tel3 division. While the Company collects payment for such minutes in advance, revenue is recognized upon delivery to and consumption of minutes by the consumer. Bonus minutes granted by the company to its customers are forfeited after twelve consecutive months of non-use at which point the Company recognizes revenue from the forfeiture of prepaid minutes. Customer accounts go inactive after 1 year and any unused minutes, balance or credits are forfeited.
The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (ASC 606), when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expect to receive in exchange for those goods or services. To determine whether arrangements are within the scope of ASC 606, the Company perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies its performance obligation. The Company apply the five-step model to contracts when it is probable that the Company will collect the consideration the Company are entitled to in exchange for the goods or services the Company transfer to the customer. At contract inception, once the contract is determined to be within the scope of this guidance, the Company assessed the goods or services promised within each contract and identify, as a performance obligation, and assess whether each promised good or service is distinct. The Company then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
| K. | Business Segments |
The Company operates in three-business segments: (i) telecommunications (ii) wholesale telecommunication services (iii) digital products and general purpose reloadable cards.
F-11
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 2– SIGNIFICANT ACCOUNTING POLICIES (continued)
| L. | Concentrations of credit risk |
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents as well as certain other current assets that do not amount to a significant amount. Cash and cash equivalents, which are primarily held in Dollars, are deposited with major banks in the United States. Management believes that such financial institutions are financially sound and, accordingly, minimal credit risk exists with respect to these financial instruments. The Company does not have any significant off-balance-sheet concentration of credit risk, such as foreign exchange contracts, option contracts or other foreign hedging arrangements.
| M. | Commitments and Contingencies |
The Company records accruals for loss contingencies arising from claims, litigation and other sources when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted periodically as assessments change or additional information becomes available. Legal costs incurred in connection with loss contingencies are expensed as incurred.
| N. | Income Taxes |
Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Use of net operating loss carry forwards for income tax purposes may be limited by Internal Revenue Code Section 382 if a change of ownership occurs.
| O. | Net Loss Per Basic and Diluted Common Share |
Basic loss per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted loss per share is calculated by dividing the Company’s net loss applicable to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted average number of shares adjusted for any potentially dilutive debt or equity.
At
December 31, 2024, potentially dilutive securities consisted of
At
December 31, 2023, potentially dilutive securities consisted of
F-12
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 2– SIGNIFICANT ACCOUNTING POLICIES (continued)
| P. | Stock-Based Compensation |
The Company applies ASC Topic 718-10, “Share-Based Payment,” which requires the measurement and recognition of compensation expenses for all share-based payment awards made to employees and directors (including employee stock options under the Company’s stock plans) based on estimated fair values.
ASC Topic 718-10 requires companies to estimate the fair value of equity-based payment awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s statement of operations.
The Company recognizes compensation expenses for the value of non-employee awards based on the straight-line method over the requisite service period of each award The Company accounts for forfeitures as they occur.
The Company estimates the fair value of stock options granted as equity awards using a Black-Scholes options pricing model. The option-pricing model requires a number of assumptions, including the expected volatility, the expected life of the award, the risk-free interest rate and the expected dividend yield. Changes in the determination of each of the inputs can affect the fair value of the options granted and the results of operations of the Company.
| Q. | Fair Value Measurements |
Fair value of certain of the Company’s financial instruments including cash, accounts receivable, account payable, accrued expenses, notes payables, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC 820, “Fair Value Measurements and Disclosure” (“ASC 820”) defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value investments.
Fair value, as defined in ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of non-performance, which includes, among other things, the Company’s credit risk.
Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows:
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.
Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and
Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values.
Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of comprehensive loss.
F-13
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 2– SIGNIFICANT ACCOUNTING POLICIES (continued)
| R. | Allocation of proceeds and related issuance costs |
When multiple instruments are issued in a single transaction (package issuance), the total net proceeds from the transaction are allocated among the individual freestanding instruments identified. The allocation occurs after identifying all the freestanding instruments and the subsequent measurement basis for those instruments.
Financial instruments that are required to be subsequently measured at fair value (i.e. derivative warrants liability and derivative liability related to bifurcated embedded conversion feature) are measured at fair value and the remaining consideration is allocated to other financial instruments that are not required to be subsequently measured at fair value (i.e. certain convertible bridge loans, warrants eligible for equity classification) and common stock, based on the relative fair value basis for such instruments.
The allocation of issuance costs to freestanding instruments was based on an approach that is consistent with the allocation of the proceeds, as described above.
Issuance costs allocated to the derivative warrant liability or bifurcated embedded conversion feature were immediately expensed, as discussed above. Issuance costs allocated to warrants stock classified as equity component were recorded as a reduction of additional paid-in capital. Issuance costs allocated to convertible bridge loan (or to the host component of convertible bridge loan if bifurcation was applied) are recorded as a discount of the host component and accreted over the contractual term of loans up to face value of such loans using the effective interest method.
| S. | Derivative Warrants Liability |
The Company accounts for certain warrants to purchase Ordinary Shares in connection with certain transactions, held by investors, that include a fundamental transaction feature pursuant to which such warrants could be required to be settled in cash upon certain events, as current liability according to the provisions of ASC 815-40, “Derivatives and Hedging - Contracts in Entity’s Own Equity” (“ASC 815-40”). The Company accounted for these warrants as a financial liability measured upon initial recognition and on subsequent periods at fair value by using the Black-Scholes Option Pricing Model.
Certain warrants that were granted by the Company in connection with certain transactions (see also Note 8) entitle the investors to exercise the warrants for a variable number of shares and/or for a variable exercise price and thus the fixed-for-fixed criteria is not met. Accordingly, the warrants were classified as a non-current liability according to the provisions of ASC 815-40, “Derivatives and Hedging - Contracts in Entity’s Own Equity” (“ASC 815-40”). The Company accounted for these warrants as a financial derivative liability measured upon initial recognition and on subsequent periods at fair value by using the Black-Scholes Option Pricing Model.
The fair value of the aforesaid warrants derivative liability is estimated using the Black-Scholes Model which requires inputs such as the expected term of the warrants, share price volatility and risk-free interest rate. These assumptions are reviewed on a regular basis and changes in the estimated fair value of the outstanding warrants are recognized each reporting period as part of in the “Financing (income) expenses, net” line in operations in the accompanying consolidated statement of net loss, until such warrants are exercised or expired. When applicable, direct issuance expenses that were allocated to the above warrants were expensed as incurred.
| T. | Recently Issued Accounting Pronouncements Not Yet Adopted |
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to provide enhanced segment disclosures. The standard will require disclosures about significant segment expenses and other segment items and identifying the Chief Operating Decision Maker and how they use the reported segment profitability measures to assess segment performance and allocate resources. These enhanced disclosures are required for all entities on an interim and annual basis, even if they have only a single reportable segment. The standard is effective for years beginning after December 15, 2023 and interim periods within annual periods beginning after December 15, 2024, and early adoption is permitted. The Company does not believe that adoption of this ASU will have a material impact on the Company’s consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to provide enhancements to annual income tax disclosures. The standard will require more detailed information in the rate reconciliation table and for income taxes paid, among other enhancements. The standard is effective for years beginning after December 15, 2024, early adoption is permitted. The Company does not believe that adoption of this ASU will have a material impact on the Company’s consolidated financial statements
F-14
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 3 –INVESTMENTS IN UNCONSOLIDATED ENTITIES
The following table presents Company’s investments in unconsolidated entities as of December 31, 2024 and 2023:
Holding | As of December 31, | As of December 31, | ||||||||||
| % | 2024 | 2023 | ||||||||||
| Lakewood (a) | % | |||||||||||
| Brooksville development (b) | % | |||||||||||
| Cuentas SDI (c) | % | |||||||||||
| (a) | On February 3, 2023, the Company entered into a Membership Interest Purchase Agreement (MIPA) with Core Development Holdings Corporation (“Core”). Core holds approximately |
The
Core claimed significant financial and other damages because the Company’s Shares were never released and delivered to Core even though Core fulfilled all of its obligations pursuant to the MIPA.
As
of December 31, 2024, the Company recognized an impairment loss in the amount of $
| (b) | On April 13, 2023, the Company signed an Operating Agreement to be a majority member in Brooksville Development Partners, LLC (“Brooksville”) with 2 minority members for the purpose of acquiring land for the development of a residential apartment community consisting of approximately 360 apartments. All real and personal property owned by Brooksville shall be owned by Brooksville as an entity, and neither the Members nor the Manager will have any ownership interest in such property. One of the minority members will be the manager of the project. |
On
April 28, 2023, the Company and minority partners in Brooksville closed on the transaction to acquire a
F-15
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 3 –INVESTMENTS IN UNCONSOLIDATED ENTITIES (continued)
| On March 13, 2024, the Company through its approximately |
The
property was originally purchased on April 28, 2023 for $
On
May 22, 2025, the Company signed a Membership Interest Purchase Agreement (MIPA) with Brooksville FL Partners, LLC (“Buyer”)
the holder of the minority stake in Brooksville, for the sale of its full interests in Brooksville for total consideration of $
On
May 27, 2025, the MIPA closing took place and the Escrow agent received $
As
of December 31, 2024, Company’s management determined that its investment in Brooksville is intended to be sold and accounted for
its investment in Brooksville at fair value. The Company recorded loss on impairment of an investment in an unconsolidated entity of
$
| (c) | On May 27, 2022, the Company entered into a Membership Interest Purchase Agreement (the “MIPA”) with SDI Black 011, LLC (“SDI Black”), the holders of all the membership interests of SDI Black and Cuentas SDI, LLC, a Florida limited liability (“Cuentas SDI”), for the acquisition of |
On
June 15, 2023, the OLB Group, Inc. entered into a Membership Interest Purchase Agreement dated as of June 15, 2023 with SDI Black 001,
LLC whereby it acquired
On
May 20, 2024 the Company and OLB Group, Inc., (“OLB”) entered into a Membership Interest Purchase Agreement according to
which the Company sold to OLB its
F-16
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 4 – INTANGIBLE ASSETS
The following table presents the Company’s intangible assets as of December 31, 2024 and 2023:
| December 31, 2024 | December 31, 2023 | |||||||||||||||||||||||
Asset | Carrying Amount | Accumulated Amortization | Net Book Value | Carrying Amount | Accumulated Amortization | Net Book Value | ||||||||||||||||||
| Domain | ||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||
NOTE 5 – SHORT TERM CREDIT
| A. | On February 7, 2024, the Company entered into an agreement with 1800 Diagonal Lending LLC, an accredited investor (the “Investor”), pursuant to which the Company sold the investor an unsecured original issuance discount promissory note in the principal amount of $ |
On
April 22, 2024, the Company entered into a second agreement with the Investor, pursuant to which the Company sold the investor an unsecured
original issuance discount promissory note in the principal amount of $
As
of December 31, 2024, the Company failed to pay the repayment amounts under the February Promissory Note and the April Promissory Note
resulting in default of the February Promissory Note and April Promissory Note and calculated the balance of the notes payable at $
On
May 14, 2025, the Company entered into a Settlement Agreement and Mutual Release (the “1800 Agreement”) with 1800 Diagonal
Lending, LLC for the obligations under the February Promissory Note and the April Promissory Note. According to the 1800 Agreement the
Company will pay $
On
May 27, 2025, full payment of $
F-17
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 5 – SHORT TERM CREDIT (continued)
| B. | On April 12, 2024, the Company entered into a Purchase and Sale of Future Receipts Agreement (the “Purchase Agreement”) with EAdvance Services LLC. (the “Buyer”), pursuant to which the Company sold the Buyer future receipts of the Company in the principal amount of $
On May 22, 2025, the Company settled outstanding obligations with EAdvance Services LLC for $ |
NOTE 6 – OTHER ACCOUNT LIABILITIES
| December 31, | ||||||||
| 2024 | 2023 | |||||||
| Accrued expenses and other liabilities | ||||||||
| Accrued salaries and directors’ fee | ||||||||
NOTE 7 – WARRANTS LIABILITY, NET
| December 31, | ||||||||
| 2024 | 2023 | |||||||
| Outstanding at January 1 | ||||||||
| Issued to investors | ||||||||
| Issued to placement agents | ||||||||
| Exercised | ( | ) | ||||||
| Changes in fair value | ( | ) | ( | ) | ||||
| Outstanding at December 31 | ||||||||
For additional information see Note 10 – Stockholders’ Equity.
F-18
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 8 – RELATED PARTY TRANSACTIONS
| A. |
Year ended December 31 | ||||||||
| 2024 | 2023 | |||||||
| Sales: | ||||||||
| Sales to SDI Cuentas LLC (formerly related party see b) | $ | $ | ||||||
| Sales to Next Communications INC (a company controlled by Arik Maimon, Company’s Chairman of the Board and CEO) (a) | ||||||||
| Total sales to related parties | $ | $ | ||||||
| Cost of sales: | ||||||||
| Cost of sales from Next Communications INC (a company controlled by Arik Maimon, Company’s Chairman of the Board and CEO) (a) | $ | $ | ||||||
| Total sales to related parties | $ | $ | ||||||
| B. |
| As of December 31, | As of December 31, | |||||||
| 2024 | 2023 | |||||||
| Arik Maimon (Chairman of the Board and the CEO) | ||||||||
| Michael De Prado (Vice Chairman of the Board and President) | ||||||||
| Current assets - Related parties | ||||||||
| Next Communications INC (a company controlled by Arik Maimon Company’s Chairman of the Board and CEO) | ||||||||
| Current assets – Accounts receivables | ||||||||
| Total Due from related parties | ||||||||
| (a) |
F-19
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 9 – STOCK OPTIONS
On
June 17, 2021 the Board of Directors of the Company approved the Cuentas Inc. 2021 Share Incentive Plan (the “2021 Plan”).
which was approved by the shareholders during the Annual Shareholders Meeting held on December 15, 2021. The maximum number of shares
of stock reserved and available for issuance under the 2021 Plan is
On
November 17, 2023, the Board of Directors of the Company approved the 2023 Share Incentive Plan (the “2023 Plan”), which
was approved by the shareholders during the Annual Shareholders Meeting held on December 20, 2023. The maximum number of shares of stock
reserved and available for issuance under the 2023 Plan is
The following table presents the Company’s stock option activity for employees and directors of the Company for the year ended December 31, 2024 and 2023:
| Number of Options | Weighted Average Exercise Price | |||||||
| Outstanding at January 1, 2023 | ||||||||
| Granted | ||||||||
| Exercised | ||||||||
| Forfeited | ( | ) | ||||||
| Expired | ( | ) | ||||||
| Outstanding at January 1, 2024 | ||||||||
| Granted | $ | |||||||
| Exercised | ||||||||
| Forfeited | ( | ) | $ | |||||
| Outstanding at December 31, 2024 | $ | |||||||
| Number of options exercisable at December 31, 2024 | $ | |||||||
The stock options outstanding as of December 31, 2024, have been separated into exercise prices, as follows:
| Exercise price | Stock options outstanding | Weighted average remaining contractual life – years | Stock options exercisable | |||||||||
| As of December 31, 2024 | ||||||||||||
The stock options outstanding as of December 31, 2023, have been separated into exercise prices, as follows:
| Exercise price | Stock options outstanding | Weighted average remaining contractual life – years | Stock options exercisable | |||||||||
| As of December 31, 2023 | ||||||||||||
F-20
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 9 – STOCK OPTIONS (continued)
The
aggregate intrinsic value of the awards outstanding as of December 31, 2024 and 2023 is $
Expenses
incurred in respect of stock options for employees and directors, for the year ended December 31, 2024 and 2023 were $
As
of December 31, 2024, there are
NOTE 10 – STOCKHOLDERS’ EQUITY
On
March 7, 2023 the Company issued
On
March 16, 2023, the Company issued
On
March 27, 2023, the Company issued
SECURITIES OFFERING
On
February 6, 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an institutional
investor (the “Investor”) for the purpose of raising approximately $
As
compensation for such placement agent services, the Company agreed to pay Wainwright an aggregate cash fee equal to
F-21
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 10 – STOCKHOLDERS’ EQUITY (continued)
The Purchase Warrants and the PA Warrant Shares were classified as financial liability because of the repurchase provisions in such warrants that permit the holders of such warrants, in the event of a fundamental transaction, to receive a cash consideration that is not the same as the consideration payable to the common stockholders (see also Note 2R). The Company uses the Black-Scholes valuation model to estimate fair value of these warrants. In using this model, the Company makes certain assumptions about risk-free interest rates, dividend yields, expected stock price volatility, expected term of the warrants and other assumptions. Expected volatility was calculated based upon historical volatility of the Company. Risk-free interest rates are derived from the yield on U.S. Treasury debt securities. Dividend yields are based on historical dividend payments, which have been zero to date. The expected term of the warrants is based on the time to expiration of the warrants from the measurement date.
The following table summarizes the observable inputs used in the valuation of the derivative warrant liabilities issued in February 2023:
| February 6, 2023 | December 31, 2023 | December 31, 2024 | ||||||||||
| Share price (U.S. dollars) | $ | $ | $ | |||||||||
| Exercise price (U.S. dollars) | $ | $ | $ | |||||||||
| Expected volatility | % | % | % | |||||||||
| Risk-free interest rate | % | % | % | |||||||||
| Dividend yield | ||||||||||||
| Expected term (years) | ||||||||||||
| Fair value | $ | $ | $ | |||||||||
On
August 21, 2023, the Company entered into a common stock warrant exercise inducement offer letter (the “Inducement Letter”)
with a certain holder (the “Holder”) of existing warrants to purchase shares of the Company’s common stock at an exercise
price of $
The Inducement Warrant and the PA Warrant Shares were classified as financial liability because of the repurchase provisions in such warrants that permit the holders of such warrants, in the event of a fundamental transaction, to receive a cash consideration that is not the same as the consideration payable to the common stockholders (see also Note 2R). The Company uses the Black-Scholes valuation model to estimate fair value of these warrants. In using this model, the Company makes certain assumptions about risk-free interest rates, dividend yields, expected stock price volatility, expected term of the warrants and other assumptions. Expected volatility was calculated based upon historical volatility of the Company. Risk-free interest rates are derived from the yield on U.S. Treasury debt securities. Dividend yields are based on historical dividend payments, which have been zero to date. The expected term of the warrants is based on the time to expiration of the warrants from the measurement date.
F-22
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 10 – STOCKHOLDERS’ EQUITY (continued)
The following table summarizes the observable inputs used in the valuation of the derivative warrant liabilities issued in August 2023:
| August 21, 2023 | December 31, 2023 | December 31, 2024 | ||||||||||
| Share price (U.S. dollars) | $ | $ | $ | |||||||||
| Exercise price (U.S. dollars) | $ | $ | $ | |||||||||
| Expected volatility | % | % | % | |||||||||
| Risk-free interest rate | % | % | % | |||||||||
| Dividend yield | ||||||||||||
| Expected term (years) | ||||||||||||
| Fair value | $ | $ | $ | |||||||||
NOTE 11 – COMMITMENTS AND CONTINGENCIES
From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.
On
May 1, 2019, the Company received a notice of demand for arbitration from Secure IP Telecom, Inc. (“Secure IP), who allegedly had
a Reciprocal Carrier Services Agreement (“RCS”) exclusively with Limecom and not with the Company. The arbitration demand
originated from another demand for arbitration that Secure IP received from VoIP Capital International (“VoIP”) in March
2019, demanding $
F-23
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 11 – COMMITMENTS AND CONTINGENCIES (continued)
On October 4, 2022, Crosshair Media Placement, LLC, a Kentucky based
marketing company, filed and served a complaint on Cuentas for breach of contract alleging breach of contract damages of $
On
February 8, 2023, a former employee of the Company, filed a complaint for breach of employment agreement alleging the Company failed
to pay her certain compensation she alleges she was entitled to upon her resignation. On May 22, 2025, the Company entered into a settlement
agreement to resolve a previously adjudicated legal matter with a full and final payment of $
NOTE 12 – SEGMENTS OF OPERATIONS
The Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of the Company’s reportable operating segments. The Company manages its business primarily on a product basis. The accounting policies of the various segments are the same as those described in Note 2, “Summary of Significant Accounting Policies.” The Company evaluates the performance of its reportable operating segments based on net sales and gross profit.
| A. |
| Year ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Telecommunications | ||||||||
| Wholesale telecommunication services | ||||||||
| Digital products and General Purpose Reloadable Cards | ||||||||
| $ | ||||||||
| B. |
| Year ended December 31, | ||||||||
| 2023 | ||||||||
| Telecommunications | ( | ) | ( | ) | ||||
| Wholesale telecommunication services (*) | ||||||||
| Digital products and General Purpose Reloadable Cards | ( | ) | ( | ) | ||||
| ( | ) | ( | ) | |||||
| (*) |
F-24
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 12 – SEGMENTS OF OPERATIONS (continued)
| C. |
| Year ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Telecommunications | - | |||||||
| Wholesale telecommunication services | ||||||||
| Digital products and General Purpose Reloadable Cards | ||||||||
For
the year ended December 31, 2024 and December 31, 2023, the Company’s sales to Next Communications INC were approximately
NOTE 13 – INCOME TAX
Internal
Revenue Code Section 382 (“IRC 382”) potentially limits the utilization of NOLs and tax credits when there is a greater than
We
recognized income tax benefits of $
The Company has not taken a tax position that, if challenged, would have a material effect on the financial statements for the years ended December 31, 2024 or December 31, 2023 applicable under FASB ASC Topic 740. We did not recognize any adjustment to the liability for uncertain tax position and therefore did not record any adjustment to the beginning balance of accumulated deficit on the balance sheet. All tax returns for the Company remain open.
| A. |
| Year ended December 31 | ||||||||
| 2024 | 2023 | |||||||
| US Dollars | ||||||||
| Pretax loss | ( | ) | ( | ) | ||||
| Federal and State statutory rate | % | % | ||||||
| Income tax computed at the ordinary tax rate | ||||||||
| Stock-based compensation | ( | ) | ( | ) | ||||
| Non-deductible expenses | ||||||||
| Other permanent differences | ( | ) | ||||||
| Losses and timing differences in respect of which no deferred taxes were generated | ( | ) | ( | ) | ||||
F-25
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 13 – INCOME TAX (continued)
| B. |
| Year ended December 31 | ||||||||
| 2024 | 2023 | |||||||
| Composition of deferred tax assets: | US Dollars | |||||||
| Non capital loss carry forwards | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| C. |
| US Dollars | ||||
| Valuation allowance, December 31, 2023 | ||||
| Increase | ||||
| Valuation allowance, December 31, 2024 | ||||
The net federal operating loss carry forward will begin expire in 2039. This carry forward may be limited upon the consummation of a business combination under IRC Section 382.
NOTE 13 – LOSS PER SHARE
Basic
loss per share is computed by dividing net loss by the weighted average number of shares outstanding during the year.
| Year ended December 31 | ||||||||
| 2024 | 2023 | |||||||
| Number of shares | ||||||||
| Weighted average number of shares of common stock outstanding attributable to shareholders | ||||||||
| Total number of shares of common stock related to outstanding options and warrants, excluded from the calculations of diluted loss per share | ||||||||
F-26
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 14 – SUBSEQUENT EVENTS
Interactive Communications International, Inc., termination agreement.
See Note 3c above.
1800 Diagonal Lending, LLC
See Note 5A above.
Disposal of Ownership Interest in Brooksville Development Partners
See Note 3b above.
EAdvance Services LLC.
See Note 5B above.
Settlement of Legal and Other Contingencies
Crosshair
Media Placement, LLC: On May 13, 2025, Cuentas’ President and CEO provided a Joint Personal Guaranty to Crosshair Media Placement,
LLC for the full payment of amounts owed by Cuentas pursuant to a judgment totaling $
Alexandra
Calicchio: On May 22, 2025, Cuentas entered into a settlement agreement for $
The Company has evaluated all other events or transactions that occurred after balance sheet date through the date these consolidated financial statements were issued and determined that no other material subsequent events required disclosure or adjustment in the financial statements.
Convertible notes
On September 22, 2025 and October 1, 2025, Cuentas, Inc. (the “Company”)
entered into two Convertible Note Purchase Agreements with World Mobile Group Ltd. (the “Investor”) for aggregate principal
of $
On
September 18, 2025, the Company and Mr. De Prado executed a Confidential Separation Agreement and related financing documents. In
connection with his departure, the Company agreed to pay $
F-27
CUENTAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands)
NOTE 14 – SUBSEQUENT EVENTS (continued)
On
October 17, 2025, the Company issued three additional unsecured convertible promissory notes: (i) a note to Shalom Arik Maimon (CEO)
in the principal amount of $
Fintech license.
Also on September 18, 2025, the Company entered into a 16-month license with Mr. De Prado granting use and access to the Fintech assets (as detailed in Schedule A) with those assets to be held in escrow by AM Law until the Note Two option is exercised. MVNO assets are expressly excluded. The various agreements with Mr. Michael De Prado were signed on September 18, 2025 but were not fully consummated until October 21, 2025 upon the release of the deliverables from escrow by the escrow agent.
Engagement Letter with Maxim Group LLC
On October 13, 2025, the Company entered into an engagement letter with Maxim Group LLC (“Maxim”), a registered
broker-dealer and investment bank, pursuant to which Maxim was engaged to act as the exclusive managing underwriter and sole
book-running manager for a proposed follow-on public offering (the “Offering”) of the Company’s common stock, par
value $
Under the terms of the engagement letter, the
Offering is expected to be conducted on a firm commitment basis and may include an overallotment option for up to
The Company agreed to pay Maxim an advance of $
The engagement letter also grants Maxim a right of first refusal for 18 months following the closing of the Offering to act as the Company’s exclusive underwriter, placement agent, or financial advisor in any future public or private equity, equity-linked, or debt offering (excluding bank debt).
The engagement letter includes standard indemnification and contribution provisions in favor of Maxim and its affiliates, customary lock-up requirements for company officers, directors, and major shareholders for a period of six months post-offering, and requires that the Company maintain NASDAQ or NYSE listing, audited PCAOB financial statements, and key man insurance.
This engagement letter was approved and signed by the Company’s Chief Executive Officer on October 13, 2025 and remains effective through August 31, 2026, unless earlier terminated under the conditions specified therein.
Hallo 015 Agreement
On November 1, 2025, the Company, through its subsidiary World Mobile LLC, entered into a Distribution Agreement with International Communications 015 Ltd (dba “Hallo 015”), an Israeli telecommunications distributor. Under the agreement, Hallo 015 was granted a non-exclusive worldwide right to distribute the Company’s eSIM products through its authorized network of retailers and online channels. The initial term of the agreement is three years with automatic one-year renewals unless terminated earlier in accordance with its terms. The arrangement provides for an initial purchase of 1,000 eSIMs at $15.00 per month per unit, with weekly billing based on first-use activation and a credit facility of $5,000 established for the distributor. The Distributor is responsible for Israel termination at its own cost and for maintaining regulatory compliance and sales support within its territory. The Company retains all intellectual-property rights and may adjust discounts or terminate for convenience upon 90 days’ written notice.
F-28
(b) Exhibits
| * | Form S-3 (Registration No. 333-275724). |
42
ITEM 16. FORM 10-K SUMMARY
Not applicable.
43
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused the report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Cuentas, Inc. | ||
| Date: November 19, 2025 | ||
| By: | /s/ Shalom Arik Maimon | |
| Shalom Arik Maimon, | ||
| Chief Executive Officer and Chairman of the Board of Directors | ||
| (principal executive officer) | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/ Shalom Arik Maimon | Chief Executive Office and | November 19, 2025 | ||
| Shalom Arik Maimon | Chairman of the Board of Directors | |||
| /s/ Ofek Haim Suchard | Interim CFO | November 19, 2025 | ||
| Ofek Haim Suchard | ||||
| Director | November 19, 2025 | |||
| Adiv Baruch | ||||
| /s/ Lexi Terrero | Director | November 19, 2025 | ||
| Lexi Terrero | ||||
| /s/ Haim Yeffet | Director | November 19, 2025 | ||
| Haim Yeffet |
44
Exhibit 10.29
Distribution Agreement
This Distribution Agreement is between World Mobile LLC, a Delaware limited liability corporation (“World Mobile”) with offices located at 235 Lincoln Rd., Suite 210, Miami Beach, Fl 33139 and International Communications 015 Ltd dba “Hallo 015”, with offices located at Hamalacha 14, Rosh HaAyin City, Israel (referred to as “Distributor”). It sets forth the terms and conditions under which the Distributor agrees to do business with World Mobile.
Definitions:
| 1. | “Active ESIM” means a ESIM provisioned by World Mobile that has been activated and has not yet reached the end of its Validity Period. |
| 2. | “First Use” means the first billable usage (voice, SMS, or data) for that ESIM. |
| 3. | “Validity Period” means the period during which a plan or top-up remains serviceable as specified in the applicable rate plan. |
| 4. | “Territory” has the meaning set forth in Exhibit A. |
| 5. | “Face Value” means the retail amount associated with an activation or top-up before discounts. |
| 6. | “Distributor Network” means Distributor’s authorized sub-distributors, retailers, agents, and points of sale within the Territory. |
World Mobile LLC Distributor Terms & Conditions
| I. | Products. Upon World Mobile’s receipt of a purchase order from Distributor (the “Purchase Order”), World Mobile agrees, to supply Distributor with World Mobile Mobile ESIM cards (the “Cards”) pursuant to such Purchase Order. Any and all incoming calls to Israel using the Cards shall be routed to Israel through Distributor’s gateway. Distributor is hereby granted the non-exclusive right to distribute the Cards in the Territory as defined in Exhibit A, attached hereto (the “Territory”). |
| II. | Term of Agreement. This Agreement shall commence as of the date this Agreement is signed by Distributor and continue thereafter for a period of three (3) years (“Initial Term”). This Agreement shall renew automatically for additional one (1) year periods (“Renewal Term”) unless either party provides the other with written notice of its intent not to renew the Agreement upon at least thirty (30) days prior written notice. World Mobile shall have the right to terminate this Agreement immediately upon Distributor committing an Event of Default (as defined below). All active ESIM card shall continue to be valid through termination of its validation period. |
| III. | Termination for Convenience. World Mobile may terminate this Agreement, in whole or in part, for any reason upon 90 days' prior written notice. No new activations may occur after the Effective Date. For the purpose of this agreement the term Effective Date shall mean the date on which the 90 days’ period had elapse. Termination for convenience does not relieve Distributor of amounts accrued or payable, including charges for Active ESIMs through their Validity Period. During the notice period, Distributor will cooperate in an orderly wind-down and no new activations may occur after the Effective Date. ESIMs activated prior to the Effective Date will remain serviceable through their Validity Period, even if such Validity Period is after the Effective Date. |
World Mobile LLC
| IV. | Payment Terms. |
| A. | All payment terms and discounts will be established and communicated by World Mobile with the initial terms and discounts as defined in Exhibit A, attached hereto. World Mobile shall have the right to change the terms and discounts at any time provided such change is delivered to Distributor in writing. The terms and discount change shall apply to all new Purchase Orders. |
| B. | Distributor may not place an order for ESIMs in an amount that exceeds the credit limit set up for Distributor after World Mobile’s review of the Distributor’s Credit Application. |
| V. | Required Services. In order for Distributor to receive ESIMs from World Mobile, Distributor acknowledges, agrees and obliges to provide the following services: |
| A. | Maintain distribution and inventory of World Mobile’s ESIMs in varieties and quantities appropriate to satisfy market demand; |
| B. | Representative of Distributor will jointly make a sales presentation with World Mobile’s or its affiliate’s representative(s) when requested; Distributor’s Representative shall not be required to travel outside Israel. |
Distributor shall remove or replace any expired advertisement on its Web site and/or Mobile site [if exists] in a timely fashion.
| VI. | Events of Default. As used herein, and without limitation of exclusion, the term “Event of Default” shall mean: |
| A. | Insolvency, receivership or dissolution by Distributor; |
| B. | Institution of bankruptcy proceedings by or against Distributor; |
| C. | Distributor fails to meet its obligations pursuant to Section III above; |
| D. | Distributor fails to perform its Required Services listed in Section IV; |
| E. | Other breach of this Agreement by Distributor. |
| VII. | Consequences of Events of Default. In the event that Distributor commits an Event of Default, World Mobile shall have the right to take any or all of the following actions conditioned upon providing a thirty [30] days prior written notice to Distributor: |
| A. | Impose a late fee of one and one half percent (1.5%) per month (or the maximum amount permitted by law) on the amount owed; |
| B. | Suspend all shipments of ESIMs to Distributor; |
| C. | Suspend all new activations of ESIMs by Distributor; |
| D. | Change Distributor’s Billing Terms; |
| E. | Decrease Distributor’s discount off face value of ESIMs by two percent (2%) for all ESIMs which has not yet been invoiced; |
| F. | Compel Distributor, within thirty (30) days of World Mobile’s written request, to return all ESIMs that have not been used, even if such ESIMs are no longer in Distributor’s physical inventory or possession (so that Distributor shall be obligated to collect such ESIMs from its sub-distributors and retailers); |
| G. | Deactivate telecommunication service on all of the ESIMs that were previously shipped to Distributor and are still in Distributor’s direct control or possession, provided that all active ESIM card shall continue to be valid through termination of its validation period; |
| H. | Take any other available legal actions against Distributor. |
| I. | Final Wind-Down. Following termination (including under III(, World Mobile will allow Active ESIMs to remain serviceable through their Validity Period, and will complete a final reconciliation within 30 days after the Effective Date. |
World Mobile LLC
2
| VIII. | Indemnification. In the event that World Mobile’s telecommunications service provider is forced to shut down the services on the distributed ESIMs due to an Event of Default committed by the Distributor, then Distributor shall indemnify and hold harmless World Mobile and its affiliates from and against any and all costs, claims, demands, losses, causes of action, government or regulatory fines, suits, proceedings, damages and expenses, including attorney’s fees, arising, whether directly or indirectly, out of Distributor’s failure to timely pay for the. Distributor acknowledges that these damages are significant and that this indemnification is an important inducement for World Mobile to enter into this Agreement. |
| IX. | Cards Distributed Prior to Activation. In the event that Distributor places ESIMs in stores before World Mobile has activated such ESIMs, then Distributor shall pay World Mobile for the full face value of such ESIMs with no discount applied, and shall further indemnify and hold harmless World Mobile from and against any and all costs, claims, demands, losses, causes of action, government or regulatory fines, suits, proceedings, damages and expenses, including attorney’s fees, arising, whether directly or indirectly, out of Distributor’s failure to request activation prior to placement of ESIMs in stores. |
| X. | Intellectual Property/Advertising. Distributor recognizes
and acknowledges that the World Mobile brand names and the designs, emblems, slogans and insignia of the World Mobile brands (the “World
Mobile’s Intellectual Property”), and the goodwill associated therewith, have great value and are the sole property of
World Mobile. Distributor agrees it has no claim, right, title or interest in or to any of World Mobile’s Intellectual Property,
and Distributor further agrees that it shall not have the right to use the World Mobile Intellectual Property (including, without limitation,
marketing or advertising) without World Mobile’s written approval. Distributor shall use the World Mobile (or underlying carriers’)
promotional and advertising posters provided to Distributor by World Mobile. Distributor agrees that any unauthorized use of World Mobile’s
Intellectual Property as listed above would result in substantial and irreparable harm to World Mobile, entitling World Mobile to immediate
injunctive relief, without limitation or waiver of World Mobile’s other legal rights including monetary compensation and/or other
reliefs. Distributor shall not use any World Mobile brand, mark, logo, trade dress, or marketing asset in any medium without World Mobile's prior written approval for each specific use, and only in accordance with World Mobile's Brand Guidelines as provided and updated from time to time. Distributor shall promptly cease any use upon World Mobile's written request. |
| XI. | Taxes. Distributor must present to World Mobile a tax-exempt certificate. World Mobile is not liable for any applicable taxes assessed by governmental authorities, including but not limited to sales, use, communications, fees or government surcharges directly related to the services sold. |
| XII. | Document Retention. Distributor will maintain complete and accurate books and records and retain all documentation, including, without limitation, World Mobile invoices and other relevant documentation with respect to its performance under this Agreement for a minimum of three calendar years after the documentation was created or for such longer period as required by law. |
World Mobile LLC
3
| XIII. | Audits and Inspections. Upon World Mobile’s request, Distributor will permit and cooperate with World Mobile’s representative or designee, to audit, review and inspect, its books, records, documentation, card inventory and premise, so as evaluate Distributor’s satisfaction of its obligations under the Agreement. |
| XIV. | Compliance with Laws. Both parties acknowledge that they have reviewed, are familiar with and shall comply with all of the rules and regulations of the applicable state and local authorities having jurisdiction over the activities contemplated it this Agreement, each party’s performance of the Agreement and the sale, use or distribution of World Mobile products. Each party represents and warrants that it has obtained all licenses, permits, consents and other authorizations necessary for the conduct of its businesses. |
| XV. | No Financial Harm to World Mobile LLC. Distributor will exercise best efforts not to be a party to, nor otherwise participate in a commercial transaction that may result or has resulted, directly or indirectly, in a financial loss to World Mobile. If Distributor acquires or plans to acquire all or substantial all of the business or assets of any person or entity that is a distributor or retailer of mobile phone ESIMs, Distributor will automatically be deemed to have assumed and will timely pay any and all outstanding debt obligations of that person or entity to World Mobile. |
| XVI. | Confidentiality. This Agreement is confidential between Distributor and World Mobile, and it shall remain confidential for the Term of the Agreement and for two (2) years thereafter. Distributor may not disclose the terms of this Agreement nor the identity of World Mobile’s agents or stores to any third party without the prior written consent of World Mobile. Distributor and its employees and agents further agree to hold strictly confidential all information and materials provided by World Mobile to Distributor that are designated by World Mobile as confidential. Distributor will not use or disclose to any third party any such information or materials without the prior written consent of World Mobile. World Mobile and its employees and agents will hold strictly confidential all materials provide by Distributor to World Mobile unless disclosure is required by law. The parties acknowledge and agree that unauthorized disclosure would cause irreparable harm to World Mobile, which would not be adequately compensated for only by monetary damages. Thus, in addition to its remedies in law, upon unauthorized disclosure, World Mobile shall be entitled to equitable relief including, without limitation, preliminary injunctive relief (obtained on notice orex parte) as well as permanent injunctive relief. |
| XVII. | Non-disparagement. Distributor agrees that it will never make any negative or disparaging statements (orally or in writing) about World Mobile, its affiliates or their respective stockholders, directors, officers, employees, brands, products, services, financial condition/status or business practices. |
| XVIII. | Non-solicitation. Distributor agrees that, during the Term of this Agreement and for a period of one (1) year thereafter, Distributor will not, directly or indirectly, solicit, employ, or attempt to solicit or employ, any World Mobile employee, agent or independent contractor. Distributor also agrees not to contact any World Mobile employee, agent or independent contractor for purpose of encouraging, influencing or attempting to influence them to leave or terminate their employment or relationship with World Mobile or to interfere with World Mobile’s activities or business. In the event Distributor hires for work any of World Mobile’s employees, agents or independent contractor while this Agreement is in effect, and for a period of one (1) year thereafter, Distributor shall pay World Mobile an amount equal to two (2) times the employee, agent or independent contractor’s annual compensation, including any bonuses, commission and the likes. World Mobile agrees that, during the Term of this Agreement and for a period of one (1) year thereafter, will not make business with any of Distributor’s activated stores in its authorized territory. World Mobile will provide monthly reports showing status of World Mobile ESIMs distributed and activated through Distributor. |
World Mobile LLC
4
| XIX. | Disclaimer. WORLD MOBILE DISCLAIMS ALL WARRANTIES, INCLUDING BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INTERRUPTION OF USE AND CONTINUED AVAILABILITY. |
| XX. | Limitation of Liability. NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR OTHERWISE, NEITHER WORLD MOBILENOR ITS AFFILIATES WILL BE LIABLE OR OBLIGATED WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT OR UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY [excluding a willful misconduct by World Mobile or any one on its behalf] (a) FOR ANY AMOUNTS IN EXCESS IN THE AGGREGATE OF THE FEES PAID TO WORLD MOBILE DURING THE PERIOD PRECEDING THE CAUSE WHICH GAVE RISE TO SUCH DAMAGES; (b) FOR ANY COST OF COVER OR PROCUREMENT OF SUBSTITUTE GOODS, TECHNOLOGY, SERVICES, OR RIGHTS; (c) FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES; (d) FOR INTERRUPTION OF SERVICES; OR (e) FOR ANY MATTER BEYOND ITS REASONABLE CONTROL, INCLUDING WITHOUT LIMITATION ANY PRODUCTS OR SERVICES PROVIDED BY CARRIERS OF THE CARDS. THE FOREGOING LIMITATION IS A FUNDAMENTAL PART OF THE BASIS OF WORLD MOBILE’S BARGAIN HEREUNDER. WORLD MOBILE WOULD NOT ENTER INTO THIS AGREEMENT ABSENT SUCH LIMITATION. |
| XXI. | Fees and Expenses. If any party institutes an action against any other party regarding this Agreement, the prevailing party will be entitled to receive, in addition to any damages or other relief, all costs reasonably incurred, including reasonable attorneys’ fees. |
| XXII. | Commitment to Honest and Ethical Business Practices. The parties hereto are committed to honest and ethical business practices, fair and ethical conduct among themselves. World Mobile and Distributor therefore expressly agree that they will at all times conduct the business contemplated herein in a manner that creates a positive business image for both parties and that each party will at all times interact with customers and prospective customers in a fair and honest manner. |
| XXIII. | Severability. In the event that any section, paragraph or portion of this Agreement is deemed by any court (or final decision of arbitrators) having lawful jurisdiction of the subject matter of this Agreement to be void, voidable or invalid for any reason, this Agreement will be deemed valid and enforceable as if the void, voidable or invalid section, paragraph or portion of this Agreement had not been a part of this Agreement in the first instance. |
| XXIV. | No Relationship. Each party is acting exclusively as an independent business. Nothing herein shall be construed to create a relationship between the parties in the nature of profit sharing, partnership, joint venture, employment or any other relationship that might impose liability on either party for the other's past, present or future debts, liabilities, obligations, acts or omissions. |
| XXV. | Choice of Law. Jurisdiction to enjoin the violation of this Agreement, shall reside exclusively in the state of England with venue in London. The laws of the state of England shall also govern all other legal issues without regard to choice laws issues. |
| XXVI. | Notices. Any notice, report, approval or consent required or permitted hereunder will be in writing via email (with confirmation of delivery) to a party at the addresses set forth in this Agreement. |
| XXVII. | Binding Effect. This Agreement shall be binding and inure to the benefit of the parties, their successors, heirs, assigns and personal representatives. |
| XXVIII. | No General Waiver. In the event that either party fails to fully enforce any section, paragraph or portion of this Agreement (whether by action or inaction), that action will apply only for that section, paragraph or portion of this Agreement and only for that instance and will not be considered a permanent waiver its right to enforce that section, paragraph or portion of this Agreement. |
| XXIX. | Entire Agreement. This Agreement supersedes all other agreements between the parties pertaining to the contemplated transactions and constitutes the entire agreement of the parties regarding the such matters and there are no other oral or written statements and promises upon which any party hereto is relying, other than what is set forth herein in writing or referred to herein. Any amendments will be effective only if made in writing and signed by both parties. |
[REST OF PAGE INTENTIONALLY LEFT BLANK]
World Mobile LLC
5
| Distributor Information | World Mobile LLC | |
| Distributor Name: | ||
| International Communications 015 Ltd | 235 Lincoln Rd, Suite 210 | |
| Miami Beach, FL 33139 | ||
| Address: | ||
| Hamalacha 14, Rosh HaAyin City, Israel | Attn: _______________ | |
| Phone Number:________ | ||
| Cell: _________________ | ||
| Owner’s Name: _____ | ||
| Federal TAX I.D. #: ______________ | ||
| E-mail Address: ___________ |
| Distributor | World Mobile LLC | |||
| By: | By: | |||
| Printed Name: | Printed Name: | |||
| Title: | Title: | |||
| Date: | Date: | |||
World Mobile LLC
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Exhibit A
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Distribution, Sales, and Authorization
| Product Type: | World Mobile Mobile ESIM Cards |
| Territory: | WORLD WIDE |
| Distributor Online Sales: | Yes |
| World Mobile Online Sales: | No |
| Minimum Weekly Amount: | n/a |
| Ramp Up Period: | 5,000 [five thousand] ESIM for 40 [forty] weeks |
| Billing Terms: | First Use |
| Initial Order: | 1,000 ESIMs |
| Initial Order Price: | US$15.00 per ESIM per month |
| Initial Order Plan: | 15 GB US data, unlimited talk & text in US |
| Distributor provide Israel termination at its own cost. |
World Mobile LLC
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Exhibit B
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Discounts, Payment Terms& Transfer
1. World Mobile shall sell Cards to Distributor with the brands and at the discounts set forth in the attached Schedule 1 or as otherwise agreed to in writing.
2. Distributor Credit Amount = $5,000 (USD)
3. For all Purchase Orders, billing shall be based on first use of ESIM activation. By 12:00 noon EST on the first business day of each week (usually Monday), World Mobile shall generate a report detailing the number of ESIMs that were first used during the previous week and will send an invoice and such first use report to Distributor via email to YORAM@HALLO.CO.IL. Post-termination, weekly first-use/active-status reports and invoices will continue until all Active ESIMs have reached the end of their Validity Period or are deactivated.
4. Distributor shall pay the amount due on each invoice within 7 days of receipt of the invoice. All payments must be made via a bank wire transfer or ACH payment. If World Mobile has not received good funds from Distributor for all of the ESIMs for which it owes, then such non-payment by Distributor shall constitute an Event of Default. Distributor shall make payment to World Mobile’s bank account as follows:
| Bank Name: | Bank TBD | |
| Bank Address | ||
| ABA for wires & ACH: | Routing No | |
| Beneficiary name: | World Mobile LLC | |
| 235 Lincoln Rd, Suite 210 | ||
| Miami Beach, FL 33139 | ||
| Account #: | Account No |
World Mobile LLC
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Exhibit 14.1
CODE OF BUSINESS CONDUCT AND ETHICS
OF
CUENTAS INC.
1 Introduction
The Board of Directors (the “Board”) of Cuentas Inc., a Florida corporation (the “Company”) has adopted this Code of Business Conduct and Ethics (this “Code”), as amended from time to time by the Board and which is applicable to all of the Company’s directors, officers and employees. To the extent this Code requires a higher standard than required by commercial practice or applicable laws, rules or regulations, the Company adheres to these higher standards.
This Code applies to all of our directors, officers and employees. We refer to all Company executive and subordinate officers and employees covered by this Code as “Company employees” or simply “employees,” unless the context otherwise requires. In this Code, we refer to our principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions, as our “principal financial officers.”
This Code is intended to supplement, and not replace, the various guidelines and documents that the Company has prepared on specific laws, rules, regulations and policies that all officers, directors and employees of the Company should be aware of, such as the Company’s Employee Handbook and Insider Trading Policy.
It is the Company’s policy that all Company directors, officers and employees:
| ● | promote honest and ethical conduct, including fair dealing and the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; |
| ● | promote the full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission (the “SEC”), as well as in other public communications made by or on behalf of the Company; |
| ● | promote compliance with applicable governmental laws, rules and regulations; |
| ● | protect the Company’s legitimate business interests, including corporate opportunities, assets and confidential information; |
| ● | deter wrongdoing; and |
| ● | require prompt internal reporting of breaches of, and accountability for adherence to, this Code. |
This Code may be amended and modified by the Board. In this Code, references to the “Company” means Cuentas Inc. and, in appropriate context, the Company’s subsidiaries, if any.
2 Honest, Ethical and Fair Conduct
Each person owes a duty to the Company to act with integrity. Integrity requires, among other things, being honest, fair and candid. Deceit, dishonesty and subordination of principle are inconsistent with integrity. Service to the Company should never be subordinated to personal gain or advantage.
Each person must:
| ● | act with integrity, including being honest and candid while still maintaining the confidentiality of the Company’s information where required or when in the Company’s interests; |
| ● | observe all applicable governmental laws, rules and regulations; |
| ● | comply with the requirements of applicable accounting and auditing standards, as well as Company policies, in order to maintain a high standard of accuracy and completeness in the Company’s financial records and other business-related information and data; |
| ● | adhere to a high standard of business ethics and not seek competitive advantage through unlawful or unethical business practices; |
| ● | deal fairly with the Company’s customers, suppliers, competitors and employees; |
| ● | refrain from taking advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair-dealing practice; |
| ● | protect the assets of the Company and ensure their proper use; |
| ● | until such time as such person ceases to be an officer or director of the Company, to first present to the Company for its consideration, prior to presentation to any other entity, any business opportunity suitable for the Company, subject to any pre-existing fiduciary or contractual obligations such officer may have or as otherwise set forth in the prospectus related to the Company’s initial public offering; and |
| ● | avoid conflicts of interest, wherever possible, except as may be allowed under guidelines or resolutions approved by the Board (or the appropriate committee of the Board) or as disclosed in the Company’s public filings with the SEC. |
A conflict of interest can arise whenever an officer, director or employee, takes action or has an interest that prevents that person from performing their Company duties and responsibilities honestly, objectively and effectively. Anything that would be a conflict for a person subject to this Code also will be a conflict for that person’s family members. For purposes of this Code, “family members” includes your spouse or life-partner, siblings, parents, aunts, uncles, nieces, nephews, cousins, in-laws and children whether such relationships are by blood or adoption. Examples of conflict of interest situations include, but are not limited to, the following:
| ● | any significant ownership interest in any supplier or customer; |
| ● | any consulting or employment relationship with any supplier, customer or competitor of the Company; |
| ● | serving on a board of directors or trustees or on a committee of any entity (whether profit or not-for-profit) whose interests reasonably would be expected to conflict with those of the Company; |
| ● | the receipt of any money, non-nominal gifts or excessive entertainment from any entity with which the Company has current or prospective business dealings; |
| ● | selling anything to the Company or buying anything from the Company, except on the same terms and conditions as comparable officers or directors are permitted to so purchase or sell; |
| ● | any other financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) involving the Company; and |
| ● | any other circumstance, event, relationship or situation in which the personal interest of a person subject to this Code interferes — or even appears to interfere — with the interests of the Company as a whole. |
3 Corporate Opportunities
As an officer, director or employee of the Company, you have an obligation to advance the Company’s interests when the opportunity to do so arises. If you discover or are presented with a corporate opportunity through the use of corporate property or information or because of your position with the Company, you should first present the corporate opportunity to the Company before pursuing the opportunity in your individual capacity. No officer, director or employee may use corporate property, information or his or her position with the Company for personal gain or compete with the Company while employed by or associated with the Company.
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You should disclose to your supervisor the terms and conditions of each business opportunity covered by this Code that you wish to pursue. Your supervisor will contact the Company’s Compliance Officer and the appropriate management personnel to determine whether the Company wishes to pursue the business opportunity. If the Company waives its right to pursue the business opportunity, you may pursue the business opportunity on the same terms and conditions as originally proposed and consistent with the other ethical guidelines set forth in this Code.
4 Confidential Information
Officers, directors and employees have access to a variety of confidential information regarding the Company. Confidential information includes all non-public information that might be of use to competitors, or, if disclosed, harmful to the Company or its counterparties, collaborators, customers or suppliers. Officers, directors and employees have a duty to safeguard all confidential information of the Company or third parties with which the Company conducts business, except when disclosure is authorized or legally mandated. Unauthorized disclosure of any confidential information is prohibited. Additionally, officers, directors and employees should take appropriate precautions to ensure that confidential or sensitive business information, whether it is proprietary to the Company or another company, is not communicated within the Company except to employees and directors who have a need to know such information to perform their responsibilities for the Company. An officer’s, director’s and employee’s obligation to protect confidential information continues after he or she leaves the Company. Unauthorized disclosure of confidential information could cause competitive harm to the Company or its counterparties, collaborators, customers or suppliers and could result in legal liability to you and the Company. Any questions or concerns regarding whether disclosure of Company information is legally mandated should be promptly referred to the Company’s Chief Executive Officer.
5 Competition and Fair Dealing
Officers, directors and employees should not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair-dealing practice. Officers, directors and employees should maintain and protect any intellectual property licensed from licensors with the same care as they employ with regard to Company-developed intellectual property.
6 Disclosure
The Company strives to ensure that the contents of and the disclosures in the reports and documents that the Company files with the SEC and other public communications shall be full, fair, accurate, timely and understandable in accordance with applicable disclosure standards, including standards of materiality, where appropriate. Each person must:
| ● | not knowingly misrepresent, or cause others to misrepresent, facts about the Company to others, whether within or outside the Company, including to the Company’s independent registered public accountants, governmental regulators, self-regulating organizations and other governmental officials, as appropriate; and |
| ● | in relation to his or her area of responsibility, properly review and critically analyze proposed disclosure for accuracy and completeness. |
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In addition to the foregoing, the Chief Executive Officer and Chief Financial Officer of the Company and each subsidiary of the Company (or persons performing similar functions), and each other person that typically is involved in the financial reporting of the Company must familiarize himself or herself with the disclosure requirements applicable to the Company as well as the business and financial operations of the Company.
Each person must promptly bring to the attention of the Chairman of the Board any information he or she may have concerning (a) significant deficiencies in the design or operation of internal and/or disclosure controls that could adversely affect the Company’s ability to record, process, summarize and report financial data or (b) any fraud that involves management or other employees who have a significant role in the Company’s financial reporting, disclosures or internal controls.
7 Compliance
It is the Company’s obligation and policy to comply with all applicable governmental laws, rules and regulations. All directors, officers and employees of the Company are expected to understand, respect and comply with all of the laws, regulations, policies and procedures that apply to them in their positions with the Company. Employees are responsible for talking to their supervisors to determine which laws, regulations and Company policies apply to their position and what training is necessary to understand and comply with them.
Directors, officers and employees are directed to specific policies and procedures available to persons they supervise.
8 Protection and Use of Company Assets
Employees should protect the Company’s assets and ensure their efficient use for legitimate business purposes only and not for any personal benefit or the personal benefit of anyone else. Theft, carelessness and waste have a direct impact on the Company’s financial performance. The use of Company funds or assets, whether or not for personal gain, for any unlawful or improper purpose is prohibited. Employees should be aware that Company property includes all data and communications transmitted or received to or by, or contained in, the Company’s electronic or telephonic systems. Company property also includes all written communications. Employees and other users of this property should have no expectation of privacy with respect to these communications and data. Employees may not copy, retrieve, modify or forward copyrighted materials, except with permission or as a single copy to reference only. Transmission of customer information should be encrypted as applicable. To the extent permitted by law, the Company has the ability, and reserves the right, to monitor all electronic and telephonic communication. These communications may also be subject to disclosure to law enforcement or government officials.
9 Reporting and Accountability
The Board is responsible for applying this Code to specific situations in which questions are presented to it and has the authority to interpret this Code in any particular situation. The Company requires that officers, directors and employees disclose any situation that reasonably would be expected to give rise to a conflict of interest. If you suspect that you have a situation that could give rise to a conflict of interest, you must report it in writing to the Chairman of the Board. Any person who becomes aware of any existing or potential breach of this Code is required to notify the Chairman of the Board promptly. Failure to do so is, in and of itself, a breach of this Code.
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Specifically, each person must:
| ● | Notify the Chairman of the Board promptly of any existing or potential violation of this Code; and |
| ● | Not retaliate against any other person for reports of potential violations that are made in good faith. |
The Company will follow the following procedures in investigating and enforcing this Code and in reporting on the Code:
| ● | The Board will take all appropriate action to investigate any breaches reported to it. |
| ● | Upon determination by the Board that a breach has occurred, the Board (by majority decision) will take or authorize such disciplinary or preventive action as it deems appropriate, after consultation with the Company’s General Counsel (or outside counsel), up to and including dismissal or, in the event of criminal or other serious violations of law, notification of the SEC or other appropriate law enforcement authorities. |
No person following the above procedure shall, as a result of following such procedure, be subject by the Company or any officer or employee thereof to discharge, demotion suspension, threat, harassment or, in any manner, discrimination against such person in terms and conditions of employment.
It is Company policy that any officer, director or employee who violates this Code will be subject to appropriate discipline, which may include termination of employment or, in the case of a director, a request that such director resign from the Board of Directors. This determination will be based upon the facts and circumstances of each particular situation. If you are accused of violating this Code, you will be given an opportunity to present your version of the events at issue prior to any determination of appropriate discipline, if any. Officers, directors and employees who violate the law or this Code may expose themselves to substantial civil damages, criminal fines and prison terms. The Company may also face substantial fines and penalties and may incur damage to its reputation and standing in the community. Your conduct as a representative of the Company, if it does not comply with the law or with this Code, can result in serious consequences for both you and the Company.
10 Policy Against Retaliation
The Company prohibits retaliation against an officer, director or employee who, in good faith, seeks help or reports known or suspected violations. If an officer, director or employee believes that they have been retaliated against, he or she should speak with the Compliance Officer. Any reprisal or retaliation against an employee because the employee, in good faith, sought help or filed a report will be subject to disciplinary action, including potential termination of employment.
11 Waivers and Amendments
Any waiver (defined below) or an implicit waiver (defined below) from a provision of this Code for the principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions or any amendment (as defined below) to this Code is required to be disclosed in a current report on Form 8-K filed with the SEC. In lieu of filing a current report on Form 8-K to report any such waivers or amendments, the Company may provide such information on its website and if it keeps such information on the website for at least 12 months and discloses the website address as well as any intention to provide such disclosures in this manner in its most recently filed Annual Report on Form 10-K.
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A “waiver” means the approval by the Company’s Board of a material departure from a provision of the Code. An “implicit waiver” means the Company’s failure to take action within a reasonable period of time regarding a material departure from a provision of the Code that has been made known to an executive officer of the Company. An “amendment” means any amendment to this Code other than minor technical, administrative or other non-substantive amendments hereto.
12 Insider Information and Securities Trading
The Company’s directors, officers or employees who have access to material, non-public information are not permitted to use that information for share trading purposes or for any purpose unrelated to the Company’s business. It is also against the law to trade or to “tip” others who might make an investment decision based on inside company information. For example, using non-public information to buy or sell the Company shares, options in the Company shares or the shares of any Company supplier, customer or competitor is prohibited. The consequences of insider trading violations can be severe. These rules also apply to the use of material, nonpublic information about other companies (including, for example, our customers, competitors and potential business partners). In addition to directors, officers or employees, these rules apply to such person’s spouse, children, parents and siblings, as well as any other family members living in such person’s home. All of the Company’s directors, officers and employees must familiarize themselves with the Company’s Insider Trading Policy.
13 Financial Statements and Other Records
All of the Company’s books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the Company’s transactions and must both conform to applicable legal requirements and to the Company’s system of internal controls. Unrecorded or “off the books” funds or assets should not be maintained unless permitted by applicable law or regulation. All Company records must be complete, accurate and reliable in all material respects.
Records should always be retained or destroyed according to the Company’s record retention policies. In accordance with those policies, in the event of litigation or governmental investigation, please consult the board of directors or the Company’s counsel.
14 Improper Influence on Conduct of Audits
No director or officer, or any other person acting under the direction thereof, shall directly or indirectly take any action to coerce, manipulate, mislead or fraudulently influence any public or certified public accountant engaged in the performance of an audit or review of the financial statements of the Company or take any action that such person knows or should know that if successful could result in rendering the Company’s financial statements materially misleading. Any person who believes such improper influence is being exerted should report such action to such person’s supervisor, or if that is impractical under the circumstances, to any of our directors.
Types of conduct that could constitute improper influence include, but are not limited to, directly or indirectly:
| ● | Offering or paying bribes or other financial incentives, including future employment or contracts for non-audit services; |
| ● | Providing an auditor with an inaccurate or misleading legal analysis; |
| ● | Threatening to cancel or canceling existing non-audit or audit engagements if the auditor objects to the Company’s accounting; |
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| ● | Seeking to have a partner removed from the audit engagement because the partner objects to the Company’s accounting; |
| ● | Blackmailing; and |
| ● | Making physical threats. |
15 Anti-Corruption Laws
The Company complies with the anti-corruption laws of the countries in which it does business, including the U.S. Foreign Corrupt Practices Act (FCPA). Directors, officers and employees will not directly or indirectly give anything of value to government officials, including employees of state-owned enterprises or foreign political candidates. These requirements apply both to Company employees and agents, such as third party sales representatives, no matter where they are doing business. If you are authorized to engage agents, you are responsible for ensuring they are reputable and for obtaining a written agreement to uphold the Company’s standards in this area.
16 Violations
All directors, officers and employees have a duty to report any known or suspected violation of this Code, including violations of the laws, rules, regulations or policies that apply to the Company. Violation of this Code is grounds for disciplinary action up to and including termination of employment. Such action is in addition to any civil or criminal liability which might be imposed by any court or regulatory agency.
17 Gifts and Entertainment
The giving and receiving of gifts can be a common business practice. Appropriate business gifts and entertainment are welcome courtesies designed to build relationships and understanding among business partners. Gifts and entertainment, however, should not compromise, or appear to compromise, your ability to make objective and fair business decisions. In addition, it is important to note that the giving and receiving of gifts are subject to a variety of laws, rules and regulations applicable to the Company’s operations. These include, without limitation, laws covering the marketing of products, bribery and kickbacks. You are expected to understand and comply with all laws, rules and regulations that apply to activities you engage in when acting on the Company’s behalf.
It is your responsibility to use good judgment in this area. As a general rule, you may give or receive gifts or entertainment to or from collaborators, customers or suppliers only if the gift or entertainment is infrequent, modest, intended to further legitimate business goals, in compliance with applicable law, and provided the gift or entertainment would not be viewed as an inducement to or reward for any particular business decision. All gifts and entertainment expenses should be properly accounted for on expense reports.
If you conduct business in other countries, you must be particularly careful that gifts and entertainment are not construed as bribes, kickbacks or other improper payments.
You should make every effort to refuse or return a gift that is beyond these permissible guidelines. If it would be inappropriate to refuse a gift or you are unable to return a gift, you should promptly report the gift to your supervisor. Your supervisor will bring the gift to the attention of the Compliance Officer, who may require you to donate the gift to an appropriate community organization. If you have any questions about whether it is permissible to accept a gift or something else of value, contact your supervisor or a principal financial officer for additional guidance.
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Note: Gifts and entertainment may not be offered or exchanged under any circumstances to or with any employees of the United States or any foreign government or state, city, provincial or local governments. If you have any questions about this policy, contact your supervisor or the Company’s Compliance Officer for additional guidance.
18 Other Policies and Procedures
Any other policy or procedure set out by the Company in writing or made generally known to employees, officers or directors of the Company prior to the date hereof or hereafter are separate requirements and remain in full force and effect.
19 Inquiries
This Code is not intended to be a comprehensive rulebook and cannot address every situation that you may face. If you feel uncomfortable about a situation or have any doubts about whether it is consistent with the Company’s ethical standards, seek help. All inquiries and questions in relation to this Code or its applicability to particular people or situations should be addressed to the Company’s Secretary, or such other compliance officer as shall be designated from time to time by the Company.
20 Conclusion
This Code contains general guidelines for conducting the business of the Company consistent with the highest standards of business ethics. If you have any questions about these guidelines, please contact your supervisor or the Company’s Compliance Officer. The Company expects all of its employees and directors to adhere to these standards.
This Code, as applied to the Company’s principal financial officers, shall be our “code of ethics” within the meaning of Section 406 of the Sarbanes Oxley Act of 2002 and the rules promulgated thereunder.
This Code and the matters contained herein are neither a contract of employment nor a guarantee of continuing Company policy. The Company reserves the right to amend, supplement or discontinue this Code and the matters addressed herein, without prior notice, at any time.
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PROVISIONS FOR CHIEF EXECUTIVE OFFICER AND SENIOR FINANCIAL OFFICERS
The Chief Executive Officer and all senior financial officers, including the Chief Financial Officer and principal accounting officer, are bound by the provisions set forth therein relating to ethical conduct, conflicts of interest, and compliance with law. In addition to the Code, the Chief Executive Officer and senior financial officers are subject to the following specific policies:
1. Act with honesty and integrity, avoiding actual or apparent conflicts between personal, private interests and the interests of the Company, including receiving improper personal benefits as a result of his or her position.
2. Disclose to the Board (and the Chief Executive Officer in the case of a senior financial officer) any material transaction or relationship that reasonably could be expected to give rise to a conflict of interest.
3. Perform responsibilities with a view to causing periodic reports and documents filed with or submitted to the SEC and all other public communications made by the Company to contain information that is accurate, complete, fair, objective, relevant, timely and understandable, including full review of all annual and quarterly reports.
4. Comply with laws, rules and regulations of federal, state and local governments applicable to the Company and with the rules and regulations of private and public regulatory agencies having jurisdiction over the Company.
5. Act in good faith, responsibly, with due care, competence and diligence, without misrepresenting or omitting material facts or allowing independent judgment to be compromised or subordinated.
6. Respect the confidentiality of information acquired in the course of performance of his or her responsibilities except when authorized or otherwise legally obligated to disclose any such information; not use confidential information acquired in the course of performing his or her responsibilities for personal advantage.
7. Share knowledge and maintain skills important and relevant to the needs of the Company, its stockholders and other constituencies and the general public.
8. Proactively promote ethical behavior among subordinates and peers in his or her work environment and community.
9. Use and control all corporate assets and resources employed by or entrusted to him or her in a responsible manner.
10. Not use corporate information, corporate assets, corporate opportunities or his or her position with the Company for personal gain; not compete directly or indirectly with the Company.
11. Comply in all respects with the Company’s Code.
12. Advance the Company’s legitimate interests when the opportunity arises.
The Board will investigate any reported violations and will oversee an appropriate response, including corrective action and preventative measures. Any officer who violates this Code will face appropriate, case specific disciplinary action, which may include demotion or discharge.
Any request for a waiver of any provision of this Code must be in writing and addressed to the Chairman of the Board. Any waiver of this Code will be disclosed promptly on Form 8-K or any other means approved by the SEC.
It is the policy of the Company that each officer covered by this Code shall acknowledge and certify to the foregoing annually and file a copy of such certification with the Chairman of the Board of Directors.
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ACKNOWLEDGEMENT
I have read and understand the foregoing Code. I hereby certify that I am in compliance with the foregoing Code, and I will comply with the Code in the future. I understand that any violation of the Code will subject me to appropriate disciplinary action, which may include demotion or discharge.
| Dated: | |
| Name: | |
| Signature: | |
| Title: |
10
Exhibit 19.1
I T C M
CUENTAS INC.
Adopted March 16, 2022
In order to take an active role in the prevention of insider trading violations by its officers, directors, employees, consultants, attorneys, advisors and other related individuals, the Board of Directors (the “Board”) of Cuentas Inc., a Florida corporation (the “Company”), has adopted the policies and procedures described in this Insider Trading Compliance Manual.
I. Adoption of Insider Trading Policy.
Effective as of the date first written above, the Board has adopted the Insider Trading Policy attached hereto as Exhibit A (as the same may be amended from time to time by the Board, the “Policy”), which prohibits trading based on material, nonpublic information regarding the Company or any company whose securities are listed for trading or quotation in the United States (“Material Non-Public Information”).
This Policy covers all officers and directors of the Company and its subsidiaries, all other employees of the Company and its subsidiaries, and consultants or contractors to the Company or its subsidiaries who have or may have access to Material Non-Public Information and members of the immediate family or household of any such person. This Policy (and/or a summary thereof) is to be delivered to all employees, consultants and related individuals who are within the categories of covered persons upon the commencement of their relationships with the Company.
II. Designation of Certain Persons.
A. Section 16 Individuals. All directors and executive officers of the Company will be subject to the reporting and liability provisions of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations promulgated thereunder (“Section 16 Individuals”).
B. Other Persons Subject to Policy. In addition, certain employees, consultants, and advisors of the Company as described in Section I above have, or are likely to have, from time to time access to Material Non-Public Information and together with the Section 16 Individuals, are subject to the Policy, including the pre-clearance requirement described in Section IV. A. below.
III. Appointment of Compliance and Chief Ethics Officer.
By the adoption of this Policy, the Board has appointed the Company’s Compliance Officer as the Insider Trading Compliance Officer (the “Compliance Officer”).
CUEN INSIDER TRADING POLICY (2022)
IV. Duties of Compliance Officer.
The Compliance Officer has been designated by the Board to handle any and all matters relating to the Company’s Insider Trading Compliance Program. Certain of those duties may be delegated to outside counsel with special expertise in securities issues and relevant law. The duties of the Compliance Officer shall include the following:
A. Pre-clearing all transactions involving the Company’s securities by the Section 16 Individuals and those individuals having regular access to Material Non-Public Information in order to determine compliance with the Policy, insider trading laws, Section 16 of the Exchange Act and Rule 144 promulgated under the Securities Act of 1933, as amended (“Rule 144”). Attached hereto as Exhibit B is a Pre-Clearance Checklist to assist the Compliance Officer’s performance of this duty.
B. Assisting in the preparation and filing of Section 16 reports (Forms 3, 4 and 5) for all Section 16 Individuals, bearing in mind, however, that the preparation of such reports is undertaken by the Company as a courtesy only and that the Section 16 Individuals alone (and not the Company, its employees or advisors) shall be solely responsible for the content of such reports and for any violations of Section 16 under the Exchange Act and related rules and regulations.
C. Serving as the designated recipient at the Company of copies of reports filed with the Securities and Exchange Commission (“SEC”) by Section 16 Individuals under Section 16 of the Exchange Act.
D. Performing periodic reviews of available materials, which may include Forms 3, 4 and 5, Form 144, officers and director’s questionnaires, and reports received from the Company’s stock administrator and transfer agent, to determine trading activity by officers, directors and others who have, or may have, access to Material Non-Public Information.
E. Circulating the Policy (and/or a summary thereof) to all covered employees, including Section 16 Individuals, on an annual basis, and providing the Policy and other appropriate materials to new officers, directors and others who have, or may have, access to Material Non-Public Information.
F. Assisting the Board in implementation of the Policy and all related Company policies.
G. Coordinating with Company internal or external legal counsel regarding all securities compliance matters.
H. Retaining copies of all appropriate securities reports, and maintaining records of his or her activities as Compliance Officer.
[Acknowledgement Appears on the Next Page]
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ACKNOWLEDGMENT
I hereby acknowledge that I have received a copy of Cuentas Inc.’s Insider Trading Compliance Manual (the “Insider Trading Manual”). Further, I certify that I have reviewed the Insider Trading Manual, understand the policies and procedures contained therein and agree to be bound by and adhere to these policies and procedures.
| Dated: | Signature |
| Name: |
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Exhibit A
Cuentas Inc.
I T P
and Guidelines with Respect to Certain Transactions in Company Securities
APPLICABILITY OF POLICY
This Policy applies to all transactions in the Company’s securities, including common stock, options and warrants to purchase common stock and any other securities the Company may issue from time to time, such as preferred stock, warrants and convertible notes, as well as to derivative securities relating to the Company’s stock, whether or not issued by the Company, such as exchange-traded options. It applies to all officers and directors of the Company, all other employees of the Company and its subsidiaries, and consultants or contractors to the Company or its subsidiaries who have or may have access to Material Nonpublic Information (as defined below) regarding the Company and members of the immediate family or household of any such person. This group of people is sometimes referred to in this Policy as “Insiders.” This Policy also applies to any person who receives Material Nonpublic Information from any Insider.
Any person who possesses Material Nonpublic Information regarding the Company is an Insider for so long as such information is not publicly known.
DEFINITION OF MATERIAL NONPUBLIC INFORMATION
It is not possible to define all categories of material information. However, information should be regarded as material if there is a reasonable likelihood that it would be considered important to an investor in making an investment decision regarding the purchase or sale of the Company’s securities. Nonpublic information is information that has not been previously disclosed to the general public and is otherwise not available to the general public.
While it may be difficult to determine whether particular information is material, there are various categories of information that are particularly sensitive and, as a general rule, should always be considered material. In addition, material information may be positive or negative. Examples of such information may include:
| ● | Financial results |
| ● | Information regarding regulatory review of Company products |
| ● | Intellectual property and other proprietary/scientific information |
| ● | Projections of future earnings or losses |
| ● | Major contract awards, cancellations or write-offs |
| ● | Joint ventures/commercial partnerships with third parties |
| ● | Research milestones and related payments or royalties |
| ● | News of a pending or proposed merger or acquisition |
| ● | News of the disposition of material assets |
| ● | Impending bankruptcy or financial liquidity problems |
| ● | Gain or loss of a substantial customer or supplier |
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| ● | New product announcements of a significant nature |
| ● | Significant pricing changes |
| ● | Stock splits |
| ● | New equity or debt offerings |
| ● | Significant litigation exposure due to actual or threatened litigation |
| ● | Changes in senior management or the Board of Directors of the Company |
| ● | Capital investment plans |
| ● | Changes in dividend policy |
CERTAIN EXCEPTIONS
For purposes of this Policy, the Company considers that the exercise of stock options for cash under the Company’s equity incentive or similar plan (but not the sale of any such shares) to be exempt from this Policy, since the other party to the transaction is the Company itself and the price does not vary with the market but is fixed by the terms of the option agreement or the plan.
STATEMENT OF POLICY
General Policy
It is the policy of the Company to prohibit the unauthorized disclosure of any nonpublic information acquired in the workplace and the misuse of Material Nonpublic Information in securities trading related to the Company or any other company.
Specific Policies
1. Trading on Material Nonpublic Information. With certain exceptions, no Insider shall engage in any transaction involving a purchase or sale of the Company’s or any other company’s securities, including any offer to purchase or offer to sell, during any period commencing with the date that he or she possesses Material Nonpublic Information concerning the Company, and ending at the close of business on the second Trading Day following the date of public disclosure of that information, or at such time as such nonpublic information is no longer material. However, see Section 2 under “Permitted Trading Period” below for a full discussion of trading pursuant to a pre-established plan or by delegation.
As used herein, the term “Trading Day” shall mean a day on which national stock exchanges are open for trading.
2. Tipping. No Insider shall disclose (“tip”) Material Nonpublic Information to any other person (including family members) where such information may be used by such person to his or her profit by trading in the securities of companies to which such information relates, nor shall such Insider or related person make recommendations or express opinions on the basis of Material Nonpublic Information as to trading in the Company’s securities.
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Regulation FD (Fair Disclosure) is an issuer disclosure rule implemented by the SEC that addresses selective disclosure of Material Nonpublic Information. The regulation provides that when the Company, or person acting on its behalf, discloses material nonpublic information to certain enumerated persons (in general, securities market professionals and holders of the Company’s securities who may well trade on the basis of the information), it must make public disclosure of that information. The timing of the required public disclosure depends on whether the selective disclosure was intentional or unintentional; for an intentional selective disclosure, the Company must make public disclosures simultaneously; for a non-intentional disclosure the Company must make public disclosure promptly. Under the regulation, the required public disclosure may be made by filing or furnishing a Form 8-K, or by another method or combination of methods that is reasonably designed to effect broad, non-exclusionary distribution of the information to the public.
It is the policy of the Company that all public communications of the Company (including, without limitation, communications with the press, other public statements, statements made via the Internet or social media outlets, or communications with any regulatory authority) be handled through the Company’s Executive Chairman, Executive Vice-Chairman, President and/or Chief Executive Officer (the “Authorized Executive”), an authorized designee of the CEO or the Company’s public or investor relations firm. Please refer all press, analyst or similar requests for information to the Authorized Executive and do not respond to any inquiries without prior authorization from the Authorized Executive. If the CEO is unavailable, the Company’s Executive Chairman, Executive Vice-Chairman, Chief Financial Officer (or the authorized designee of such officer) will fill this role.
3. Confidentiality of Nonpublic Information. Nonpublic information relating to the Company is the property of the Company and the unauthorized disclosure of such information (including, without limitation, via email or by posting on Internet message boards, blogs or social media) is strictly forbidden.
4. Duty to Report Inappropriate and Irregular Conduct. All employees, and particularly managers and/or supervisors, have a responsibility for maintaining financial integrity within the company, consistent with generally accepted accounting principles and both federal and state securities laws. Any employee who becomes aware of any incidents involving financial or accounting manipulation or irregularities, whether by witnessing the incident or being told of it, must report it to their immediate supervisor and to any member of the Company’s Audit Committee. In certain instances, employees are allowed to participate in federal or state proceedings. For a more complete understanding of this issue, employees should consult their employee manual and or seek the advice of counsel. Our general corporate and securities counsel is Ellenoff Grossman & Schole LLP, attention: Sarah Williams at (212) 370-1300, email: swilliams@egsllp.com.
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POTENTIAL CRIMINALAND CIVIL LIABILITY
AND/OR DISCIPLINARY ACTION
1. Liability for Insider Trading. Insiders may be subject to penalties of up to $5,000,000 and up to ten (10) years in jail for engaging in transactions in the Company’s securities at a time when they possess Material Nonpublic Information regarding the Company. In addition, the SEC has the authority to seek a civil monetary penalty of up to three times the amount of profit gained or loss avoided by illegal insider trading. “Profit gained” or “loss avoided” generally means the difference between the purchase or sale price of the Company’s stock and its value as measured by the trading price of the stock a reasonable period after public dissemination of the nonpublic information.
2. Liability for Tipping. Insiders may also be liable for improper transactions by any person (commonly referred to as a “tippee”) to whom they have disclosed Material Nonpublic Information regarding the Company or to whom they have made recommendations or expressed opinions on the basis of such information as to trading in the Company’s securities. The SEC has imposed large penalties even when the disclosing person did not profit from the trading. The SEC, the stock exchanges and the National Association of Securities Dealers, Inc. use sophisticated electronic surveillance techniques to monitor and uncover insider trading.
3. Possible Disciplinary Actions. Individuals subject to the Policy who violate this Policy shall also be subject to disciplinary action by the Company, which may include suspension, forfeiture of perquisites, ineligibility for future participation in the Company’s equity incentive plans and/or termination of employment.
PERMITTED TRADING PERIOD
1. Black-Out Period and Trading Window.
To ensure compliance with this Policy and applicable federal and state securities laws, the Company requires that all officers, directors, members of the immediate family or household of any such person and others who are subject to this Policy refrain from conducting any transactions involving the purchase or sale of the Company’s securities, other than during the period in any fiscal quarter commencing at the close of business on the second Trading Day following the date of public disclosure of the financial results for the prior fiscal quarter or year and ending on the fifteenth day of the third month of the fiscal quarter (the “Trading Window”). If such public disclosure occurs on a Trading Day before the markets close, then such date of disclosure shall be considered the first Trading Day following such public disclosure.
It is the Company’s policy that the period when the Trading Window is “closed” is a particularly sensitive periods of time for transactions in the Company’s securities from the perspective of compliance with applicable securities laws. This is because Insiders will, as any quarter progresses, are increasingly likely to possess Material Nonpublic Information about the expected financial results for the quarter. The purpose of the Trading Window is to avoid any unlawful or improper transactions or the appearance of any such transactions.
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It should be noted that even during the Trading Window any person possessing Material Nonpublic Information concerning the Company shall not engage in any transactions in the Company’s (or any other companies, as applicable) securities until such information has been known publicly for at least two Trading Days. The Company has adopted the policy of delaying trading for “at least two Trading Days” because the securities laws require that the public be informed effectively of previously undisclosed material information before Insiders trade in the Company’s stock. Public disclosure may occur through a widely disseminated press release or through filings, such as Forms 10-Q and 8-K, with the SEC. Furthermore, in order for the public to be effectively informed, the public must be given time to evaluate the information disclosed by the Company. Although the amount of time necessary for the public to evaluate the information may vary depending on the complexity of the information, generally two Trading Days is a sufficient period of time.
From time to time, the Company may also require that Insiders suspend trading because of developments known to the Company and not yet disclosed to the public. In such event, such persons may not engage in any transaction involving the purchase or sale of the Company’s securities during such period and may not disclose to others the fact of such suspension of trading.
Although the Company may from time to time require during a Trading Window that Insiders and others suspend trading because of developments known to the Company and not yet disclosed to the public, each person is individually responsible at all times for compliance with the prohibitions against insider trading. Trading in the Company’s securities during the Trading Window should not be considered a “safe harbor,” and all directors, officers and other persons should use good judgment at all times.
Notwithstanding these general rules, Insiders may trade outside of the Trading Window provided that such trades are made pursuant to a pre established plan or by delegation; these alternatives are discussed in the next section.
2. Trading According to a Pre-established Plan (10b5-1) or by Delegation.
The SEC has adopted Rule 10b5-1 under which insider trading liability can be avoided if Insiders follow very specific procedures. In general, such procedures involve trading according to pre-established instructions, plans or programs (a “10b5-1 Plan”).
10b5-1 Plans must:
(a) Be documented by a contract, written plan, or formal instruction which provides that the trade take place in the future. For example, an Insider can contract to sell his or her shares on a specific date, or simply delegate such decisions to an investment manager, 401(k) plan administrator or similar third party. This documentation must be provided to the Company’s Insider Trading Compliance Officer;
(b) Include in its documentation the specific amount, price and timing of the trade, or the formula for determining the amount, price and timing. For example, the Insider can buy or sell shares in a specific amount and on a specific date each month, or according to a pre-established percentage (of the Insider’s salary, for example) each time that the share price falls or rises to pre-established levels. In the case where trading decisions have been delegated, the specific amount, price and timing need not be provided;
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(c) Be implemented at a time when the Insider does not possess material non-public information. As a practical matter, this means that the Insider may set up 10b5-1 Plans, or delegate trading discretion, only during a “Trading Window” (discussed in Section 1, above); and,
(d) Remain beyond the scope of the Insider’s influence after implementation. In general, the Insider must allow the 10b5-1 Plan to be executed without changes to the accompanying instructions, and the Insider cannot later execute a hedge transaction that modifies the effect of the 10b5-1 Plan. Insiders should be aware that the termination or modification of a 10b5-1 Plan after trades have been undertaken under such plan could negate the 10b5-1 affirmative defense afforded by such program for all such prior trades. As such, termination or modification of a 10b-5 Plan should under be undertaken in consultation with your legal counsel. If the Insider has delegated decision-making authority to a third party, the Insider cannot subsequently influence the third party in any way and such third party must not possess material non-public information at the time of any of the trades.
Prior to implementing a pre-established plan for trading, all officers and directors must receive the approval for such plan from the Company’s Insider Trading Compliance Officer, providing that such person does not possess inside information.
3. Pre-Clearance of Trades.
Even during a Trading Window, all Insiders, must comply with the Company’s “pre-clearance” process prior to trading in the Company’s securities, implementing a pre-established plan for trading, or delegating decision-making authority over the Insider’s trades. To do so, each Insider must contact the Company’s Insider Trading Compliance Officer prior to initiating any of these actions. The Company may also find it necessary, from time to time, to require compliance with the pre-clearance process from others who may be in possession of Material Nonpublic Information.
4. Individual Responsibility.
Every person subject to this Policy has the individual responsibility to comply with this Policy against insider trading, regardless of whether the Company has established a Trading Window applicable to that Insider or any other Insiders of the Company. Each individual, and not necessarily the Company, is responsible for his or her own actions and will be individually responsible for the consequences of their actions. Therefore, appropriate judgment, diligence and caution should be exercised in connection with any trade in the Company’s securities. An Insider may, from time to time, have to forego a proposed transaction in the Company’s securities even if he or she planned to make the transaction before learning of the Material Nonpublic Information and even though the Insider believes he or she may suffer an economic loss or forego anticipated profit by waiting.
5. Exceptions to the Policy.
Any exceptions to this Policy may only be made by advance written approval of each of: (i) the Company’s Chairman of the Board and Chief Executive Officer, and (ii) the Insider Trading Compliance Officer. Any such exceptions shall be immediately reported to the remaining members of the Board.
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APPLICABILITY OF POLICY TO INSIDE INFORMATION
REGARDING OTHER COMPANIES
This Policy and the guidelines described herein also apply to Material Nonpublic Information relating to other companies, including the Company’s customers, vendors or suppliers (“business partners”), when that information is obtained in the course of employment with, or other services performed on behalf of the Company. Civil and criminal penalties, as well as termination of employment, may result from trading on Material Nonpublic Information regarding the Company’s business partners. All Insiders should treat Material Nonpublic Information about the Company’s business partners with the same care as is required with respect to information relating directly to the Company.
PROHIBITION AGAINST BUYING AND SELLING
COMPANY COMMON STOCK WITHIN A SIX-MONTH PERIOD
Directors, Officers and 10% Shareholders
Purchases and sales (or sales and purchases) of Company common stock occurring within any six-month period in which a mathematical profit is realized result in illegal “short-swing profits.” The prohibition against short-swing profits is found in Section 16 of the Exchange Act. Section 16 was drafted as a rather arbitrary prohibition against profitable “insider trading” in a company’s securities within any six-month period regardless of the presence or absence of material nonpublic information that may affect the market price of those securities. Each executive officer, director and 10% shareholder of the Company is subject to the prohibition against short-swing profits under Section 16. Such persons are required to file Forms 3, 4 and 5 reports reporting his or her initial ownership of the Company’s common stock and any subsequent changes in such ownership. The Sarbanes-Oxley Act of 2002 requires executive officers and directors who must report transactions on Form 4 to do so by the end of the second business day following the transaction date. Profit realized, for the purposes of Section 16, is calculated generally to provide maximum recovery by the Company. The measure of damages is the profit computed from any purchase and sale or any sale and purchase within the short-swing (i.e., six-month) period, without regard to any setoffs for losses, any first-in or first-out rules, or the identity of the shares of common stock. This approach sometimes has been called the “lowest price in, highest price out” rule.
In order to avoid trading activity that could inadvertently trigger a short-swing profit, it is the Company’s policy that no executive officer, director and 10% shareholder of the Company who has a 10b5-1 Plan in place may engage in voluntary purchases or sales of Company securities outside of and while such 10b5-1 Plan remains in place.
INQUIRIES
Please direct your questions as to any of the matters discussed in this Policy to the Company’s Insider Trading Compliance Officer.
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Exhibit B
CUENTAS INC.
I T C P - P-C C
| Individual Proposing to Trade: | ||
| Number of Shares covered by Proposed Trade: | ||
| Date: |
| ☐ | Trading Window. Confirm that the trade will be made during the Company’s “trading window.” |
| ☐ | Section 16 Compliance. Confirm, if the individual is subject to Section 16, that the proposed trade will not give rise to any potential liability under Section 16 as a result of matched past (or intended future) transactions. Also, ensure that a Form 4 has been or will be completed and will be timely filed. |
| ☐ | Prohibited Trades. Confirm, if the individual is subject to Section 16, that the proposed transaction is not a “short sale,” put, call or other prohibited or strongly discouraged transaction. |
| ☐ | Rule 144 Compliance (as applicable). Confirm that: |
| ☐ | Current public information requirement has been met; |
| ☐ | Shares are not restricted or, if restricted, the one year holding period has been met; |
| ☐ | Volume limitations are not exceeded (confirm that the individual is not part of an aggregated group); |
| ☐ | The manner of sale requirements have been met; and |
| ☐ | The Notice of Form 144 Sale has been completed and filed. |
| ☐ | Rule 10b-5 Concerns. Confirm that (i) the individual has been reminded that trading is prohibited when in possession of any material information regarding the Company that has not been adequately disclosed to the public, and (ii) the Insider Trading Compliance Officer has discussed with the individual any information known to the individual or the Insider Trading Compliance Officer which might be considered material, so that the individual has made an informed judgment as to the presence of inside information. |
Signature of Insider Trading Compliance Officer
CUEN INSIDER TRADING POLICY (2022)
Exhibit 21.1
CUENTAS INC. AND SUBSIDIARIES
SUBSIDIARIES OF THE REGISTRANT
All of the operating subsidiaries of Cuentas Inc., a Florida corporation, listed below are included in the Consolidated Financial Statements:
| State in Which Incorporated | Country in Which Incorporated | |||
| Meimoun and Mammon, LLC | Florida | USA |
Exhibit 23.1
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENT
We hereby consent to the incorporation by reference in the Registration Statement of Cuentas, Inc. on Form S-3 (File No. 333-267268 and File No. 333-275724) of our report dated November 18, 2025, with respect to our audit of the financial statements of Cuentas Inc. as of December 31, 2024 and 2023 and for years then ended, which report is included in this Annual Report on Form 10-K of Cuentas, Inc. for the year ended December 31, 2024.
/s/ Yarel + Partners
Tel- Aviv, Israel
November 19, 2025
Exhibit 31.1
CERTIFICATION OF
CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Arik Maimon, certify that:
| 1. | I have reviewed this Form 10-K of Cuentas Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 19, 2025
| /s/ Arik Maimon | |
| Arik Maimon | |
| Chief Executive Officer and Chairman of the Board |
Exhibit 31.2
CERTIFICATION OF
INTERIM CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Ofek Haim Suchard, certify that:
| 1. | I have reviewed this Form 10-K of Cuentas Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 19, 2025
/s/ Ofek Haim Suchard |
|
Ofek Haim Suchard |
|
Interim Chief Financial Officer |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this Annual Report on Form 10-K of Cuentas Inc. (the “Company”) for the year ended December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Arik Maimon, Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: November 19, 2025
| By: | /s/ Arik Maimon | |
| Arik Maimon | ||
| Chief Executive Officer and | ||
| Charmain of the Board |
This certification accompanies each Report pursuant to §906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the SarbanesOxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended. A signed original of this written statement required by §906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this Annual Report on Form 10-K of Cuentas Inc. (the “Company”) for the year ended December 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Ofek Haim Suchard, Interim Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: November 19, 2025
| By: | /s/ Ofek Haim Suchard | |
| Ofek Haim Suchard | ||
|
Interim Chief Financial Officer |
This certification accompanies each Report pursuant to §906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the SarbanesOxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended. A signed original of this written statement required by §906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 97.1
CUENTAS INC.
EXECUTIVE COMPENSATION CLAWBACK POLICY
Adopted as of November 17, 2023
The Board of Directors (the “Board”) of Cuentas Inc. (the “Company”) has adopted the following executive compensation clawback policy (this “Policy”). This Policy shall supplement any other clawback or compensation recovery policy or policies adopted by the Company or included in any agreement between the Company, or any subsidiary of the Company, and a person covered by this Policy. If any such other policy or agreement provides that a greater amount of compensation shall be subject to clawback, such other policy or agreement shall apply to the amount in excess of the amount subject to clawback under this Policy.
This Policy shall be interpreted to comply with Securities and Exchange Commission (“SEC”) Rule 10D-1 and Listing Rule 5608 (the “Listing Rule”) of The Nasdaq Stock Market, LLC (“Nasdaq”), as may be amended or supplemented and interpreted from time to time by Nasdaq. To the extent this Policy is any manner deemed inconsistent with the Listing Rule, this Policy shall be treated as having been amended to be compliant with the Listing Rule.
1. Definitions. Unless the context otherwise the following definitions apply for purposes of this Policy:
(a) Executive Officer. An executive officer is the Company’s chief executive officer and/or president, principal financial officer, principal accounting officer (or if there is no such accounting officer, the controller), any vice-president of the Company in charge of a principal business unit, division, or function (such as sales, administration, or finance), any other officer who performs a policy-making function, or any other person who performs similar policy-making functions for the Company. Executive officers of the Company’s parent(s) or subsidiaries are deemed executive officers of the Company if they perform such policy making functions for the Company. Policy-making function is not intended to include policy-making functions that are not significant. Identification of an executive officer for purposes of the Listing Rule would include at a minimum executive officers identified in the Listing Rule.
(b) Financial Reporting Measures. Financial reporting measures are measures that are determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and any measures that are derived wholly or in part from such measures. Stock price and total shareholder return are also financial reporting measures. A financial reporting measure need not be presented within the financial statements or included in a filing with the SEC and may be such financial measures as may be determined by the Board or the Compensation Committee thereof (the “Compensation Committee”).
(c) Incentive-Based Compensation. Incentive-based compensation is any compensation that is granted, earned or vested based wholly or in part upon the attainment of a financial reporting measure.
(d) Received. Incentive-based compensation is deemed “received” in the Company’s fiscal period during which the financial reporting measure specified in the incentive-based compensation award is attained, even if the payment or grant of the incentive-based compensation occurs after the end of that period.
2. Application of this Policy. This recovery of Incentive-Based Compensation from an Executive Officer as provided for in this Policy shall apply only in the event that the Company is required to prepare an accounting restatement due to the material noncompliance of Company with any financial reporting requirement under the United States securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period.1
3. Recovery Period.
(a) The Incentive-Based Compensation subject to recovery is the Incentive-Based Compensation Received during the three (3) completed fiscal years immediately preceding the date that the Company is required to prepare an accounting restatement as described in Section 2 above, provided that the person served as an Executive Officer at any time during the performance period applicable to the Incentive-Based Compensation in question. The date that the Company is required to prepare an accounting restatement shall be determined pursuant to the Listing Rule.
(b) Notwithstanding the foregoing, this Policy shall only apply if the Incentive-Based Compensation is Received (i) while the Company has a class of securities listed on Nasdaq and (ii) on or after October 2, 2023.
(c) The provisions of the Listing Rule shall apply with respect to Incentive-Based Compensation received during a transition period arising due to a change in the Company’s fiscal year.
| 1 | NOTE: questions as to “materiality” will be made by the Audit Committee as part of the restatement process. Companies should review the charters for Audit and Compensation committees and consider updates authorizing them to oversee and make applicable determinations under the company’s Clawback policy. |
4. Erroneously Awarded Compensation. The amount of Incentive-Based Compensation subject to recovery from the applicable Executive Officers under this Policy (“Erroneously Awarded Compensation”) shall be equal to the amount of Incentive-Based Compensation Received that exceeds the amount of Incentive Based-Compensation that otherwise would have been Received had it been determined based on the restated amounts and shall be computed without regard to any taxes paid. For Incentive-Based Compensation based on stock price or total shareholder return, where the amount of Erroneously Awarded Compensation is not subject to mathematical recalculation directly from the information in an accounting restatement: (a) the amount shall be based on a reasonable estimate by the Company’s Chief Financial Officer (or principal accounting officer, if the office of Chief Financial Officer is not then filled) of the effect of the accounting restatement on the stock price or total shareholder return upon which the Incentive-Based Compensation was received, which estimate shall be subject to the review and approval of the Compensation Committee; and (b) the Company must maintain reasonable documentation of the determination of that reasonable estimate and provide such documentation to Nasdaq if requested. Notwithstanding the foregoing, if the proposed Incentive Based Compensation recovery would affect compensation paid to the Company’s Chief Financial Officer, the determination shall be made by the Compensation Committee.
5. Timing of Recovery. The Company shall recover any Erroneously Awarded Compensation reasonably promptly except to the extent that the conditions of paragraphs (a), (b), or (c) below apply. The Compensation Committee shall determine the repayment schedule for each amount of Erroneously Awarded Compensation in a manner that complies with this “reasonably promptly” requirement. Such determination shall be consistent with any applicable legal guidance by the SEC, Nasdaq, judicial opinion, or otherwise. The determination of “reasonably promptly” may vary from case to case and the Compensation Committee is authorized to adopt additional rules or policies to further describe what repayment schedules satisfy this requirement.
(a) Erroneously Awarded Compensation need not be recovered if the direct expense paid to a third party to assist in enforcing (or making determinations in connection with the enforcement of) this Policy would exceed the amount to be recovered and the Compensation Committee has made a determination that recovery would be impracticable. Before concluding that it would be impracticable to recover any amount of Erroneously Awarded Compensation based on expense of enforcement, the Company shall (i) make a reasonable attempt to recover such Erroneously Awarded Compensation, (ii) document such reasonable attempt or attempts to recover, and (iii) provide appropriate documentation to the Compensation Committee or Nasdaq, if requested.
(b) Erroneously Awarded Compensation need not be recovered if recovery would violate home country law where that law was adopted prior to November 28, 2022. Before concluding that it would be impracticable to recover any amount of Erroneously Awarded Compensation based on a violation of home country law, the Company shall obtain an opinion of home country counsel, in form an substance that would be reasonably acceptable to Nasdaq, that recovery would result in such a violation and shall provide such opinion to Nasdaq, if requested.
(c) Erroneously Awarded Compensation need not be recovered if recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of 26 U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and the regulations thereunder (as such provision may be amended, modified or supplemented).
6. Compensation Committee Decisions. Decisions of the Compensation Committee with respect to this Policy shall be final, conclusive and binding on all Executive Officers subject to this Policy.
7. No Indemnification. Notwithstanding anything to the contrary in any other policy of the Company or any agreement between the Company and an Executive Officer, no Executive Officer shall be indemnified by the Company against the loss arising from the recovery of any Erroneously Awarded Compensation.
8. Agreement to Policy by Executive Officers2. The Company shall take reasonable steps to inform Executive Officers of this Policy and obtain their express agreement to this Policy, which steps may constitute the inclusion of this Policy as an attachment to any award that is accepted by an Executive Officer. This Policy shall be deemed to apply to each employment or grant agreement between the Company or any of its subsidiaries and any Executive Officer subject to this Policy.
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| 2 | Companies should be advised to have the executive officers acknowledge this in writing (similar to the Insider trading Policy acknowledgement). Also consider if amendments should be made to employment agreements, grant award forms, etc. |