🧾 What This Document Is

This is Cuentas Inc.'s annual report (Form 10-K) for the year ended December 31, 2025. It's a comprehensive summary required by the SEC that details the company's business, financial condition, risks, and performance. Think of it as an annual "report card" and deep-dive briefing for investors.

🏢 What The Company Does

👉 In simple terms… Cuentas is a startup trying to build a one-stop shop for mobile phone service and streaming entertainment, aimed especially at the U.S. Hispanic & Latino market.

The company has pivoted. It's now focused on two main areas through joint ventures where it owns 51%:

1. Mobile Telecom (via World Mobile LLC): They operate as an MVNO (Mobile Virtual Network Operator), which means they rent network capacity from a major carrier (like Cricket or Mint Mobile does) and resell it under their own brand, "Cuentas Mobile" and "World Mobile."
2. Entertainment Media (via World Mobile Media Group LLC): They are building a streaming platform for live events, original content, and creator-driven programming, hoping to monetize through pay-per-view and ads.

The big idea is to bundle these together—your mobile plan becomes your exclusive gateway to their entertainment world.

💰 Financial Highlights

The financial picture is extremely concerning for a public company:

• Cash Position: A mere $57,000 in cash at year-end.
• Losses: An accumulated deficit (total lifetime losses) of ~$59.8 million.
• Working Capital Deficit: ~$4.07 million, meaning short-term liabilities far exceed short-term assets.
• Going Concern Warning: The company's auditors explicitly doubt Cuentas can continue operating for the next year without securing major new funding. This is the biggest red flag in the report.
• Revenue: The report states the company "does not currently have significant revenue" from its core operations.

🚀 Key Moves & Recent Developments

The company made several major strategic shifts in 2025:

• Exited Real Estate: Sold its Florida real estate development investments (Brooksville Property) to raise $800,000. This cash was primarily used to settle ~$1.13 million in debt for a final cost of $666,356.
• Exited Fintech: Separated from its co-founder and licensed its legacy fintech assets (prepaid cards, digital wallet) to him. Management decided to focus capital on telecom/media instead.
• Formed Key Joint Ventures:
  • World Mobile LLC (Telecom): Formed with World Mobile Group Ltd. Cuentas contributed its MVNO business; World Mobile contributed $300,000. Profit sharing is heavily skewed: 85% to World Mobile Group, 15% to Cuentas (with some exceptions).
  • World Mobile Media Group (Media): Formed with Tummo Road LLC to build the streaming platform. Profits are shared 51% (Cuentas) / 49% (Tummo).
• Raised Small, Restrictive Funding: Secured a $260,000 convertible note and a $125,000 note from its joint venture partner, World Mobile Group. The $260,000 note was later converted into 1,277,018 shares of CUEN stock, giving World Mobile Group ~18.5% of the company.
• First Customer: Signed a distribution agreement with Israeli telecom Hallo 015 to sell its eSIM products to their subscribers.

📦 Financial Position & Structure

The company's financial structure is complex and strained:

• Micro-Cap Status: With only ~9.7 million shares outstanding and a history of being delisted from Nasdaq, it trades on the OTCQB market, a platform for smaller, riskier companies.
• Dilution Risk: The company has issued convertible debt and warrants, which could create more shares and dilute existing shareholders.
• Material Weaknesses: Management identified serious flaws in its internal financial controls, including lack of proper reviews, segregation of duties, and oversight of transactions with directors. This increases the risk of financial errors or misreporting.

🔮 What's Next (Plans & Guidance)

Cuentas's survival and growth depend entirely on executing a high-risk plan:

• Launch Entertainment: Aim to start marketing and live broadcasts for its entertainment platform in Q2 2026. This is crucial for their "bundled" value proposition.
• Grow Telecom Subscribers: Reactivate distribution through "vertical market" partnerships to cheaply acquire customers for its mobile service.
• Raise Capital: The company must raise more money to fund operations, product development, and marketing. The terms are likely to be unfavorable and dilutive to shareholders.

⚖️ Big Picture: Strengths & Risks

👍 Potential Strengths:

• Integrated Model: The bundle of mobile + entertainment is a unique pitch in a crowded market.
• Target Market: Focusing on the underserved Hispanic & Latino community provides a specific niche.
• Partnership Tech: Leveraging World Mobile's established telecom technology (used by ~3 million daily users internationally) could accelerate its MVNO launch.

⚠️ Overwhelming Risks:

• Severe Liquidity Crisis: With only $57k in cash and a "going concern" warning, the company is on life support until it raises more money.
• Unproven Model: No proven track record of attracting subscribers or monetizing entertainment. Competing against giants like AT&T, Netflix, and TikTok.
• Governance & Dilution: Past SEC filing delinquencies, material control weaknesses, and complex related-party deals (like the note conversion to World Mobile Group) are major red flags.
• High Execution Risk: The entire plan hinges on successful launches in Q2 2026 and the ability to fund operations in the meantime.

🧠 The Analogy

Cuentas is like a chef trying to open a revolutionary new restaurant while having almost no money in the bank. They've just sold their car (real estate) to pay for groceries (settle debts) and have convinced a farmer (World Mobile Group) to supply ingredients in exchange for a huge share of future profits. Now, they have just weeks to design a menu (entertainment platform), start cooking (launch services), and convince diners (customers) to come—all before their last $57 runs out. The investors (us) are being asked to bet on the chef's vision, knowing the stove could shut off at any moment.

🧩 Final Takeaway

Cuentas is a high-risk, speculative turnaround story attempting a strategic pivot from fintech/real estate to a bundled telecom/media model. Its survival hinges entirely on raising new capital immediately and executing flawless product launches in Q2 2026. The severe liquidity warning and material control weaknesses present an extreme risk of total loss for investors.