CUEN – Cuentas Releases Annual Financial Reports Reflecting

Cuentas, Inc. Reports Financial Results for YE 2023 Fueled by its Fintech, Mobile Telecom and Additional Real Estate Assets  in South Florida. Expects Imminent Closing Sale of Tampa Real Estate Asset Unlocking Remarkable Profits and Cash. 

MIAMI BEACH, FL, April 16, 2024 (GLOBE NEWSWIRE) — Cuentas, Inc. (OTC: CUEN & CUENW) (“CUEN” or “the Company”), a pioneer driving the seamless integration of fintech, mobile telecommunications, and real estate for the unbanked and underbanked Hispanic demographic, announced today the publication of the company’s FY 2023 financial report on SEC Form 10K. The report reflects the company’s financial results supported by its diversified offerings serving consumers’ comprehensive basic needs, from housing to secure communications to innovative financial services. Management comments on the imminent completion of the definitive sale of its Brooksville, Florida property. 

Successful Operations and Strict Strategy Execution

Early in 2023 the Company Board of Directors and Management planned a clear path to streamline its business and improve profits and cash flow. Throughout the fiscal year the organization has performed in line with the traced strategy. Whether in real estate, fintech or telecommunications services, the results have been tangible both in a significant shift in revenues, profits and cost reductions.

Cuentas strategically aligns its offerings with the needs of its target market, refraining from activation fees and maintaining low monthly charges. The company’s approach integrates empathy and affordability, aiming to provide value to its users while ensuring profitability through various revenue channels.

Cuentas has fortified its business with a robust mobile service, Cuentas Mobile, supported by a powerful distribution ecosystem, underpinned by a meticulously developed software platform. This upgraded system, using the novel eSIM technology, is designed for reliability, and will incorporate its current Cuentas Money services.

The Company is poised for technological advancement through a forthcoming partnership with a fintech company, aiming to enhance security, marketing intelligence, and ease of use within its platform, while ensuring seamless integration and user experience.  The Cuentas Money platform will transition to a new banking partner in 2024, aiming to maintain its accessibility and functionality for its predominantly Hispanic clientele. By offering services like prepaid Mastercard accounts and mobile payments, Cuentas seeks to bridge the digital divide and cater to the unbanked and underbanked populations, leveraging its distribution network and prepaid card offerings to serve its diverse demographic.

Cuentas investments in real estate developments in Florida, Cuentas Casa, demonstrates a strategic focus on sustainable housing solutions and expansion in the region’s market. One notable venture includes the acquisition of a 6% equity interest in Lakewood Village, a pioneering affordable multi-family project in Lake Worth. Utilizing RENCO Structural Building System, known for its hurricane-resistant properties, Lakewood Village introduces innovative construction technology to the US market. Additionally, a supply agreement with Renco USA secures access to patented building materials for future sustainable housing projects, enhancing the Company’s competitive edge in South Florida’s real estate landscape. The launch of the Lakewood Village project garnered attention from city officials and has attracted national and international media coverage due to its groundbreaking application of advanced building technologies. Notably, the development has achieved full rental capacity, signaling its success within the market.

In parallel, the Company’s collaboration with Brooksville Development Partners signals its commitment to further development in the region. The acquisition of a 21.8-acre site for a residential apartment community underscores the Company’s proactive approach to land acquisition and project development. Despite financing considerations and potential changes in ownership structure, the Company’s endeavors reflect a concerted effort to capitalize on Florida’s real estate opportunities while prioritizing innovation and sustainability.

A mortgage held with Republic Bank of Chicago, initially of $3.05 million, was adjusted to $3.055 million on January 27, 2024. Also, a $500,000 Loan Extension Agreement was made with ALF Trust on 09/28/2023, to support the necessary Promissory Note for the interest reserve and fees, as well as the Company’s working capital needs.

On March 13, 2024, the Company, holding 63% of Brooksville Development Partners (“Brooksville”), agreed to sell the project for $7.2 million. Cuentas initially invested $2 million in the purchase and approximately $65k in engineering costs, totaling $5.05 million. The buyer deposited $100k in escrow, non-refundable, with 60 days to finalize the purchase. This sale of the Brooksville property unlocks substantial liquidity, reinforcing Cuentas’ commitment to self-sustainability and strategic expansion. Proceeds will bolster the company’s capital reserves and further enhance its flagship Fintech and Mobile Telecommunications products.

Financial Results for the Fiscal Year ended December 31, 2023

Revenues: During the year ended December 31, 2023, totaled $2,346,000 compared to $2,994,000 for the year ended December 31, 2022. The decrease in our sales of digital products and General-Purpose Reloadable Cards is mainly due to decreasing our sales with Cuentas SDI including online and other marketing initiatives, including but not limited to distribution agreements partially offset by increase in wholesale telecommunication services in the amount of $2,177,000 from our Bilateral Wholesale Carrier Agreement with Next Communications INC. a company controlled by Arik Maimon our Chairman of the Board and our CEO.

Cost of revenues during the year ended December 31, 2023, totaled $2,733,000 compared to $2,508,000 for the year ended December 31, 2022.

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 $2,170,000 during the year ended December 31, 2023, and $232,000 during the year ended December 31, 2022.

Cost of revenue also consists of costs related to the sale of the Company’s digital products and GPR Cards in the amount of $219,000 during the year ended December 31, 2023, and $2,276,000 during the year ended December 31, 2022. 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 in the amount of $209,000 during the year ended December 31, 2023, as opposed to $2,087,000 during the year ended December 31, 2022. 

Gross profit margin:  For the year ended December 31, 2023, 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 from the sale of digital products and general-purpose reloadable cards stemmed from ceasing all activities with Cuentas SDI LLC.

Operating Expenses: Consist of selling, general and administrative Expenses, impairments and amortization of Intangible assets as discussed below and totaled $6,022,000 during the year ended December 31, 2023, compared to $14,841,000 during the year ended December 31, 2022, representing a net decrease of $8,819,000.

Selling, general and administrative expenses: Totaled $6,011,000 during the year ended December 31, 2023, a net decrease of $3,420,000, or 36% compared to $9,431,000 during the year ended December 31, 2022.

Net Loss: We incurred a net loss of $2,196,000 for the year ended December 31, 2023, as compared to a net loss of $$14,531,000 for the year ended December 31, 2022.

Cash Position: As of December 31, 2023, the Company had $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, compared December 31, 2022,  cash position of $466,000, accounts receivables of $209,000 and other current assets of $14,000.

You can find the filed form 10K here: CUENTAS INC – FORM 10K

Cuentas, Inc. (OTC: CUEN & CUENW) is creating an alternative financial ecosystem for the growing global population who do not have access to traditional financial alternatives. The Company’s proprietary technologies help to integrate FinTech (Financial Technology), e-finance and e-commerce services into solutions that deliver next generation digital financial services to the unbanked, under-banked and underserved populations nationally in the USA. The Cuentas Platform integrates Cuentas Mobile, the Company’s Mobile Telecommunications solution, with its core financial services offerings to help entire communities enter the modern financial marketplace. Cuentas has launched its General Purpose Reloadable (GPR) Card, which includes a digital wallet, discounts for purchases at major physical and online retailers, rewards, and the ability to purchase digital content. LINK: https://cuentas.com AND https://cuentasmobile.com.

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Forward-Looking Statements

This news release contains “forward-looking statements,” as that term is defined in section 27a of the United States Securities Act of 1933, as amended, and section 21e of the United States Securities Exchange Act of 1934, as amended. These forward-looking statements involve substantial uncertainties and risks and are based upon our current expectations, estimates and projections and reflect our beliefs and assumptions based upon information available to us at the date of this release. We caution readers that forward-looking statements are predictions based on our current expectations about future events. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Our actual results, performance or achievements could differ materially from those expressed or implied by the forward-looking statements as a result of a number of factors, including, but not limited to, OTC and shareholder approval of the proposed transaction, our ability to manage our research and development programs that are based on novel technologies, our ability to successfully integrate WHEN operations and product offerings, the sufficiency of working capital to realize our business plans and our ability to raise additional capital, market acceptance, the going concern qualification in our financial statements, our ability to retain key employees, our competitors developing better or cheaper alternatives to our products, risks relating to legal proceedings against us and the risks and uncertainties discussed under the heading “RISK FACTORS” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and in our other filings with the Securities and Exchange Commission. We undertake no obligation to revise or update any forward-looking statement for any reason.