Cuentas Inc.

Cuentas Inc. Annual Report - Plain English Investor Summary

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Money Talk: Are They Growing?

The bad news:

• Lost $3.3 million in 2024 – 50% worse than last year’s $2.2M loss.
• Cash crisis deepened: Only $15,000 left (down from $205,000 in 2023).
• Owe $3.19M more than they own in short-term bills (up from $2.93M last year).
• Sales collapsed: Made just $2,000 from regular customers (down 50% from 2023).
• Insider sales vanished: Revenue from companies tied to executives dropped 97% ($2.25M → $81k).

Small bright spots:

• Slowed cash burn by 86% ($598k spent in 2024 vs. $4.19M in 2023).
• Sold a real estate project for $800k (recouped 40% of their $2M investment).
• Collected $1.036M from overdue customer payments.

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Big Wins vs. Tough Spots

Added Challenges ❌

• Real estate failures: Lost $700k on a Florida project and exited all property deals.
• Lifetime losses hit $58.3M (up from $55M last year).
• Owed $271k by CEO’s company (Next Communications) – unpaid since 2023.
• Paid $783k total ($110k cash + $673k debt) to settle a president’s exit during a cash crunch.

Glimmers of hope ✅

• Signed a 10-year deal with Renco for hurricane-resistant building projects (no revenue yet).
• Partnering with World Mobile on a mobile network joint venture (51% ownership).
• Reduced money owed by insider-linked companies by 79% ($1.3M → $271k).

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Leadership & Strategy Shifts

• Pivoted to mobile tech and construction: Betting on World Mobile and Renco partnerships.
• Emergency loans: Borrowed $385k from World Mobile (convertible to stock) and $50k as a security deposit.
• CEO’s stock move: Converted $293k of personal loans into 697,723 shares.
• Salary debts: Still owe executives $580k+ in unpaid back pay.

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What’s Next?

• Survival mode: With $15k cash, expect more loans, asset sales, or stock dilution.
• Debt deadline: Must repay $1.1M+ to insiders by late 2026 – could force fire sales.
• Make-or-break partnerships: Needs Renco and World Mobile deals to generate revenue.
• Leadership risk: CEO’s 10% ownership guarantee could dilute existing shareholders.

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Bottom Line for Investors

Red flags 🚩

• Lost 97% of revenue after insider-linked sales disappeared.
• CEO’s other company still owes them $271k.
• $1.1M debt to insiders due in 2026 – high risk of dilution or asset seizures.
• Spent $95k on audits despite near-zero cash (likely borrowed).

Faint hopes 🌱

• World Mobile partnership could create a new revenue stream.
• Renco deal offers potential in disaster-resistant housing.
• Reduced reliance on insider transactions.

The company provided limited details about:

• Specific plans to achieve profitability
• Customer acquisition strategies
• Competitive advantages in mobile/construction markets

Investment verdict:
Cuentas is high-risk, speculative. The business model collapsed after losing insider sales, and survival depends on unproven partnerships. With $58.3M in lifetime losses and minimal cash, this is only for investors comfortable with extreme volatility and potential total loss. Existing shareholders face dilution risks from CEO stock guarantees and convertible debt.

Proceed with extreme caution – this is less an investment and more a gamble on turnaround miracles.