Cuentas, Inc. (Nasdaq: CUEN & CUENW), the leading developer of
a fully integrated telecommunications and financial ecosystem for
the unbanked and underbanked Hispanic market, announced today the
publication of the company’s Q3 FY 2023 financial report on SEC
Form 10Q.
Revenue increase, pending acquisition
and improved operations performance
Management is pleased to present a report that
highlights the company's ongoing transition, strategically
capitalizing on its extensive experience in the telecommunications
sector. The aim is to broaden its scope by offering a diverse range
of services that cater to the comprehensive basic needs of today's
consumers, spanning from housing solutions to secure communications
and innovative financial services.
The results speak volumes about Cuentas
progress, with sales surging to an impressive $1 million, marking
an extraordinary quarter-over-quarter increase of 861%, and an
increase of $0.896 million for the period ending September
2023.
The revenue increase originates from its joint
ventures and its wholesale telecommunications increase in volume in
preparation for its Cuentas Mobile products, which will include
international features via Cuentas FinTech proprietary intellectual
property core platform.
Expenses and losses reflect a corresponding
reduction due to a decrease in sales, marketing and administrative
expenses. These robust financial indicators underscore the success
of its expansion strategy and its commitment to delivering value
across various sectors.
Central to Cuentas’ transition is a strategic
acquisition currently underway. As noted in the Q3 FY 2023 report
on SEC Form 10Q for the period ending September 30, 2023, under
subsequent events, on October 19th of this year, Cuentas entered
into a binding agreement to acquire the majority interest in WHEN
Group (OTC Pink: WHEN), a telecom and cybersecurity company with
proprietary technologies developed to protect individuals and
enterprises. Management believes the Company’s solutions address a
broad segment of the fast-growing, multi-billion-dollar
cybersecurity market, projected to total $215 billion in 2024,
according to Gartner.
This acquisition will enable Cuentas to provide
a suite of solutions that utilize advanced pattern recognition and
artificial intelligence (AI) to create a security screening
environment that can detect and defend against a range of threats
and attacks on telecom, banking, and other communication
infrastructure.
The Q3 FY 2023 report on SEC Form 10Q also
discloses details regarding recent real estate investments. The
initial investment of $2.1 million is expected to increase due to
short-term property appreciation. As part of the company’s
plan to diversify into multifamily property management, Cuentas
owns 6% of the Lakewood Village project, recently completed in
Lakewood, Florida. Future resident services will include Cuentas
Mobile, Cuentas Fintech, Cuentas Casa and secure financial services
applications.
Operating Expense and Loss Reductions
The Company has reduced its operating expenses
in an effort to improve cash use and reduce net operating results
compared to the same period in 2022. Management continues to take
measures to migrate the business to mobile-based applications. By
targeting consumer services, it expects to generate a steady
revenue source based on subscription services from Cuentas Mobile
and by adding the future cybersecurity applications from the WHEN
portfolio of products, increase gross margins from the projected
average revenues per user.
Cuentas has engaged an external investment
banking firm with the intent of providing new financing. The
expected funds will be used for market expansion, to support future
acquisitions, and to increase the stockholders' equity
requirements.
Financial Results for the Third Quarter Ended
September 30, 2023
Net Loss: The net loss for the quarter ended
September 30, 2023, was $4.3 million. This net loss was $4.8
million lower than the $9.1 million recorded during the quarter
ended September 30, 2022.
Operating Expenses were $3.512 million, compared
to $9.320 million for the nine months in the previous fiscal year
quarter. This represents a decrease of $5.808 million. Selling,
general, and administrative expenses totaled $3.499 million during
the nine months ended September 30, 2023, a net decrease of $4.463
million, or 56%, compared to $7.962 million during the nine months
ended September 30, 2022. A decrease in the amount of $0.471
million in officers' compensation, a decrease in the amount of
$1.258 million in Share-based compensation, and shares issued for
services. A decrease in the amount of $0.580 million in maintenance
and support services, an additional $0.448 million decrease in
Directors’ and officers’ insurance and a decrease in selling and
marketing expenses of $1.028 million since the Company
significantly reduced its selling and marketing campaigns in 2023.
The company had a partial offset increase of approximately $0.299
million from its settlement expenses.
Cash Position: For the nine months ended
September 30, 2023, the Company deployed $3.2 million of cash for
operations and $2.2 million for investing activities, while raising
$6.0 million from financing activities. As of September 30, 2023,
cash and cash equivalents were $1.1 million.
Management encourages investors to review the
full Q3 FY 2023 report on SEC Form 10Q for all pertinent
information, including additional information not addressed in this
press release.
FOR IMMEDIATE RELEASE
About Cuentas
Cuentas, Inc. (Nasdaq: 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 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. In Q1 of 2023
Cuentas launched Cuentas Casa, an alternative housing development
initiative that secured a 10-year supply agreement for a patented,
sustainable building system that will provide the bridge between
its technology solutions and the affordable housing market. Cuentas
has made investments to date in affordable housing projects for
over 450 apartments. LINK: https://cuentas.com
AND https://cuentasmobile.com
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, Nasdaq 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.
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