MIAMI BEACH, FL, Nov. 20, 2023 (GLOBE NEWSWIRE) -- 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.
