CUEN

New in FY2025

• At December 31, 2025, we had cash and cash equivalents of approximately $57,000, a working capital deficit of approximately $4,069,000 and an accumulated deficit of approximately $59,826,000.
• As a result of our current lack of financial liquidity, our auditors’ report for our 2025 consolidated financial statements contains a statement concerning substantial doubt regarding our ability to continue as a going concern.
• Risks Related to Our Company We have a limited operating history in our new business plan and therefore we cannot ensure, either in the near- or long-term, that we will be able to generate cash flow or profit.
• We have a limited operating history in our new business plan upon which you may evaluate our business and an investment in our Common Stock may entail significantly more risk than the shares of common stock of a company with a substantial operating history.
• Maintaining effective internal control over financial reporting and effective disclosure controls and procedures are necessary for us to produce reliable financial statements.
• As discussed in Item 9A – “Controls and Procedures” of this report, we have evaluated our internal control over financial reporting and our disclosure controls and procedures and concluded that they were not effective as of December 31, 2025.
• The material weaknesses we identified are: ● Lack of appropriate segregation of duties; ● Lack of information technology (“IT”) controls over revenue; ● Lack of adequate review of internal controls to ascertain effectiveness; and ● Lack of control procedures that include multiple levels of supervision and review. ● Lack of formalized controls and governance procedures over the approval, documentation, and accounting for transactions with directors and officers, including timely authorization, review, and proper recording of such transactions in the Company’s books and records.
• Operating our business on a larger scale will result in substantial increases in our expenses.
• An Executive Search Committee will be established to evaluate and propose qualified executive candidates for approval by the Board of Directors.
• We, the products and services that we offer and market, and those for which we provide processing services, are subject to a variety of federal, state and foreign laws and regulations, including, but not limited to: federal communications laws and regulations; foreign jurisdiction communications laws and regulations; state unclaimed property laws and federal and state consumer protection laws, including regulations relating to privacy and data security.
• These activities subject us to certain privacy and information security laws, regulations and rules in the United States, including, for example, the privacy provisions of the Gramm-Leach-Bliley Act and its implementing regulations, various other federal and state privacy and information security statutes and regulations.
• These federal and state laws, as well as our agreements with our providers, contain restrictions relating to the collection, processing, storage, disposal, use and disclosure of personal information, and require that we have in place policies regarding information privacy and security.
• We have in effect a privacy policy relating to personal information provided to us in connection with requests for information or services, and we continue to work with our suppliers and other third parties to update policies and programs and adapt our business practices in order to comply with applicable privacy laws and regulations.
• Our MVNO operators, including Cuentas Mobile and World Mobile, earn revenues by purchasing network capacity from other network operators and reselling it to end users.
• World Mobile Media Group LLC may be unable to attract and retain talent or content providers.
• World Mobile Media Group LLC executives have extensive experience in the entertainment world.
• If World Mobile Media Group LLC cannot attract or retain talent or content providers, it will significantly adversely affect Cuentas’ operating results, revenues, financial condition, and ability to remain in business.
• Criminals, including, without limitation, cyber-organized criminal syndicates, and others, use increasingly sophisticated methods to engage in illegal activities involving prepaid calling services, reload telecom products, and customer information.
• Risks Related to an Investment in Our Securities The market price of our Common Stock may be highly volatile, and you could lose all or part of your investment.
• The market price of our Common Stock may be highly volatile and thinly traded, and you could lose all or part of your investment.
• The market for our Common Stock is characterized by low trading volumes and significant price swings, and our shares are considered thinly traded on the OTC market.
• Even with limited daily volume, our stock price has experienced substantial percentage changes over short periods, which means that relatively small trades can result in disproportionate price movements and heightened volatility compared to the broader market.
• This volatility and limited liquidity may prevent you from being able to sell your shares at or above the price you paid, or at the time you wish to sell. ● whether we achieve our anticipated corporate objectives; ● actual or anticipated fluctuations in our quarterly or annual operating results; ● changes in financial or operational estimates or projections; ● changes in the economic performance or market valuations of companies similar to ours; and ● general economic or political conditions in the United States or elsewhere.
• The SEC has rules that regulate broker-dealer practices in connection with transactions in penny stocks.

Gone since FY2024

• At December 31, 2024, we had cash and cash equivalents of approximately $15,000, a working capital deficit of approximately $3,170,000 and an accumulated deficit of approximately $58,255,000.
• As a result of our current lack of financial liquidity, our auditors’ report for our 2024 consolidated financial statements contains a statement concerning substantial doubt regarding our ability to continue as a going concern.
• Risks Related to Our Company We have a limited operating history and therefore we cannot ensure, either in the near- or long-term, that we will be able to generate cash flow or profit.
• We have a limited operating history upon which you may evaluate our business and an investment in our Common Stock may entail significantly more risk than the shares of common stock of a company with a substantial operating history.
• Update for 2024 year end Maintaining effective internal control over financial reporting and effective disclosure controls and procedures are necessary for us to produce reliable financial statements.
• As discussed in Item 9A – “Controls and Procedures” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and in our quarterly report for the period ended September 30, 2024 we have evaluated our internal control over financial reporting and our disclosure controls and procedures and concluded that they were not effective as of December 31, 2024 or September 30, 2024.
• The material weaknesses we identified are: ● Lack of appropriate segregation of duties; ● Lack of information technology (“IT”) controls over revenue; ● Lack of adequate review of internal controls to ascertain effectiveness; and ● Lack of control procedures that include multiple levels of supervision and review.
• Operating our business on a larger scale could result in substantial increases in our expenses.
• An Executive Search Committee has been established to evaluate and propose qualified executive candidates for approval by the Board of Directors.
• We, the products and services that we offer and market, and those for which we provide processing services, are subject to a variety of federal, state and foreign laws and regulations, including, but not limited to: federal communications laws and regulations; foreign jurisdiction communications laws and regulations; federal anti-money laundering laws and regulations, including the USA PATRIOT Act (the “Patriot Act”), the Bank Secrecy Act (the “BSA”), anti-terrorist financing laws and anti-bribery and corrupt practice laws and regulations in the U.S., and similar international laws and regulations, including the Proceeds of Crime (Money Laundering) and Terrorist Financing Act in Canada; state unclaimed property laws and money transmitter or similar licensing requirements; federal and state consumer protection laws, including the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (the “CARD Act”), and the Durbin Amendment to Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), and regulations relating to privacy and data security; and foreign jurisdiction payment services industry regulations.
• We are subject to Anti-Money Laundering Regulation.
• We are subject to a comprehensive federal anti-money laundering regulatory regime that is constantly evolving.
• The anti-money laundering regulations to which we are subject include the BSA, as amended by the Patriot Act, which criminalizes the financing of terrorism and enhances existing BSA regimes through: (a) expanding AML program requirements to certain delineated financial institutions; (b) strengthening customer identification procedures; (c) prohibiting financial institutions from engaging in business with foreign shell banks; (d) requiring financial institutions to have due diligence procedures and, where appropriate, enhanced due diligence procedures for foreign correspondent and private banking accounts; and (e) improving information sharing between financial institutions and the U.S. government.
• Pursuant to the BSA, we have instituted a Customer Identification Program, (CIP).
• The CIP is incorporated into our BSA/anti-money laundering compliance program.
• We are increasingly facing more stringent anti-money laundering rules and regulations, compliance with which may increase our costs of operation, decrease our operating revenues and disrupt our business” for additional information.
• Cuentas is or may become subject to reporting and recordkeeping requirements related to anti-money laundering compliance obligations arising under the Patriot Act and its implementing regulations.
• In addition, provisions of the BSA enacted by the Prepaid Access Rule issued by the Financial Crimes Enforcement Network (“FinCEN”), impose certain obligations, such as registration and collection of consumer information, on “providers” of certain prepaid access programs, including the prepaid products issued by Cuentas and our issuing banks for which we serve as program manager.
• In order to qualify for certain exclusions under the Prepaid Access Rule, some of our content providers were required to modify operational elements of their products, such as limiting the amount that can be loaded onto a card in any one day.
• In addition, pursuant to the Prepaid Access Rule, Cuentas and some of our retail distribution partners have adopted policies and procedures to prevent the sale of more than $10,000 in prepaid access (including closed loop and open loop products that fall under the monetary thresholds outlined above) to any one person during any one day.
• At the federal level, Congress and federal regulatory agencies have enacted and implemented new laws and regulations that affect the prepaid industry, such the CARD Act and FinCEN’s Prepaid Access Rule.
• Moreover, there are currently proposals before Congress that could further substantially change the way banks, including prepaid card issuing banks and other financial services companies, are regulated and are permitted to offer their products to consumers.
• Non-bank financial services companies, including money transmitters and prepaid access providers, are now regulated at the federal level by the Consumer Financial Protection Bureau (the “CFPB”), which began operations in July 2011, bringing additional uncertainty to the regulatory system and its impact on our business.
• We are increasingly facing more stringent anti-money laundering rules and regulations, compliance with which may increase our costs of operation, decrease our operating revenues and disrupt our business.
• Abuse of our prepaid products for purposes of financing sanctioned countries, terrorist funding, bribery or corruption could cause reputational or other harm that could have a material adverse effect on our business, results of operations and financial condition.
• Failure by us to comply with federal banking regulation may subject us to fines and penalties and our relationships with our issuing banks may be harmed.
• We are subject to Money Transmitter Licenses or Permits .
• Most states regulate the business of sellers of traveler’s checks, money orders, drafts and other monetary instruments, which we refer to collectively as money transmitters.
• While many states expressly exempt banks and their agents from regulation as money transmitters, others purport to regulate the money transmittal businesses of bank agents or do not extend exemptions to non-branch bank agents.
• In those states where we are required to be licensed, we are subject to direct supervision and regulation by the relevant state banking departments or similar agencies charged with enforcement of the money transmitter statutes and must comply with various restrictions and requirements, such as those related to the maintenance of certain levels of net worth, surety bonding, selection and oversight of our authorized delegates, permissible investments in an amount equal to our outstanding payment obligations with respect to some of the products subject to licensure, recordkeeping and reporting, and disclosures to consumers.
• We are also subject to periodic examinations by the relevant licensing authorities, which may include reviews of our compliance practices, policies and procedures, financial position and related records, various agreements that we have with our issuing banks, retail distribution partners and other third parties, privacy and data security policies and procedures, and other matters related to our business.
• As a regulated entity, Cuentas may incur significant costs associated with regulatory compliance.
• We anticipate that compliance costs and requirements will increase in the future for our regulated subsidiaries and that additional subsidiaries will need to become subject to these or new regulations.
• If we fail to maintain our existing money transmitter licenses or permits, or fail to obtain new licenses or permits in a timely manner, our business, results of operations and financial condition could be materially and adversely affected.
• These activities subject us to certain privacy and information security laws, regulations and rules in the United States, including, for example, the privacy provisions of the Gramm-Leach-Bliley Act and its implementing regulations, various other federal and state privacy and information security statutes and regulations, and the Payment Card Industry Data Security Standard.
• These federal and state laws, as well as our agreements with our issuing banks, contain restrictions relating to the collection, processing, storage, disposal, use and disclosure of personal information, and require that we have in place policies regarding information privacy and security.
• We have in effect a privacy policy relating to personal information provided to us in connection with requests for information or services, and we continue to work with our issuing banks and other third parties to update policies and programs and adapt our business practices in order to comply with applicable privacy laws and regulations.
• We were subject to Card Association and Network Organization Rules.
• In addition to the federal, state, local, and foreign jurisdiction laws and regulations discussed above, we, Cuentas and our issuing banks, were also subject to card association and debit network rules and standards.
• The operating rules govern a variety of areas, including how consumers and merchants may use their cards and data security.

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