Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes included elsewhere in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025. Some of the information contained in this discussion and analysis, particularly with respect to our plans and strategy for our business and related financing, includes forward-looking statements within the meanings of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, including statements regarding expectations, beliefs, intentions or strategies for the future. When used in this report, the terms "anticipate," "believe," "estimate," "expect," "can," "continue," "could," "intend," "may," "plan," "potential," "predict," "project," "should," "will," "would" and words or phrases of similar import, as they relate to our company or our management, are intended to identify forward-looking statements. We intend that all forward-looking statements be subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are only predictions and reflect our views as of the date they are made with respect to future events and financial performance, and we undertake no obligation to update or revise, nor do we have a policy of updating or revising, any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as may be required under applicable law. Forward-looking statements are subject to many risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements as a result of several factors including those set forth under "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025 and in subsequent reports filed pursuant to Section 13(a) of the Exchange Act.

The Company notes that in addition to the description of historical facts contained herein, this report contains certain forward-looking statements that involve risks and uncertainties as detailed herein and from time to time in the Company's other filings with the Securities and Exchange Commission and elsewhere. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those, described in the forward-looking statements. These factors include, among others: (a) the Company's fluctuations in sales and operating results; (b) regulatory, competitive and contractual risks; (c) development risks; (d) the ability to achieve strategic initiatives, including but not limited to the ability to achieve sales growth across the business segments through a combination of enhanced sales force, new products, and customer service; and (e) pending litigation.

OVERVIEW AND OUTLOOK

The Company was incorporated under the laws of the State of Florida on September 21, 2005 to act as an operational company and as a holding company for its subsidiaries. Its wholly-owned subsidiary is Meimoun and Mammon, LLC (100% owned) ("M&M") which provides wholesale and retail telecommunications services. The Company also own 50% of CUENTASMAX LLC, which installs WiFi6 shared network ("WSN") systems in locations in the New York metropolitan tristate area using access points and small cells to provide users with access to the WSN.The Company is focusing its business mainly on developing internal and vertical markets for Cuentas Mobile, the Company's Cellular Telecommunications solution.

On September 18, 2025, the Company entered into a 16-month license with Mr. De Prado granting use and access to the Fintech assets (as detailed in Schedule A); MVNO assets are excluded. The Fintech assets were delivered electronically to Mr. De Prado on Jan. 19, 2026.

World Mobile LLC

World Mobile LLC is the Company's majority-owned joint venture with World Mobile Group formed to operate the Company's MVNO business. Through the JV, the Company now holds a 51% membership interest and consolidates the entity for financial reporting purposes. The JV Company's operating platform includes a range of infrastructure assets, such as licensed U.S. spectrum holdings, nationwide roaming agreements, a distributed AirNode network, and core network infrastructure that supports mobile connectivity across U.S. markets. World Mobile LLC operates in active commercial environments with real usag, an established market presence, and adherence to applicable regulatory requirements. Its infrastructure model is designed to scale as additional markets are launched, customer usage increases, and new network assets are deployed.

The Latino Market

The name "Cuentas" is a Spanish word that has multiple meanings and was chosen for strategic reasons, to develop a close relationship with the Spanish speaking population. It means "Accounts" as in "bank accounts" and it can also mean "You can count on me" as in "Cuentas conmigo". Additionally, it can be used to "Pay or settle accounts" (saldar cuentas), "accountability" (rendición de cuentas), "to be accountable" (rendir cuentas) and other significant meanings.

The 2020 U.S. Census showed the Hispanic Latino population at over 62 million and at 18.7% of the total U.S. population. The FDIC defines the "unbanked" "as those adults without an account at a bank or other financial institution and are considered to be outside the mainstream for one reason or another. The Company believes that the Hispanic and Latino demographic generally have had more identification, credit, and former bank account issues than any other U.S. minority group leading to more difficulty in obtaining a traditional bank account.

RESULTS OF OPERATIONS

Comparison of the nine months ended March 31, 2026 to the nine months ended March 31, 2025

Operating Expenses

Operating expenses consist of selling, general and administrative Expenses totaled $333,000 during the three months ended March 31, 2026, compared to $283,000 during the three months ended March 31, 2025 representing a net increase of $50,000.

Selling, General and Administrative Expenses

The table below summarizes our general and administrative expenses incurred during the periods presented:

		Three Months Ended
		March 31
		2026				2025
		Dollars in thousands
Officers compensation		$	145			$	186
Directors fees			42				42
Share-based compensation			43				18
Professional services			20				-
Legal fees			83				-
Office expenses and other			-				37
Total		$	333			$	283

Other Income (Expenses)

Other expenses totaled $95,000 during the three months ended March 31, 2026. Other expenses are comprised of loss from change in fair value of derivative warrants liability and interest

Other expenses totaled $116,000 during the three months ended March 31, 2025. Other expenses are comprised of interest

Net Loss

We incurred a net loss of $467,000 for the three-month period ended March 31, 2026, as compared to a net loss of $399,000 for the three-month period ended March 31, 2025 .

Liquidity and Capital Resources

The Company was able to continue basic operations by working with executive management and a few select employees who were willing to work for the company and accept deferred and accrued compensation. This enabled the Company to continue efforts to manage legal issues, plan for the future, attempt to raise capital, renew operations and bring the company back to compliance.

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures.

As of March 31, 2026, the Company had total current assets of $832,000 including $72 of cash, accounts receivables of $271,000, other current assets- related parties of $472,000 and total current liabilities of $4,311,000 creating a working capital deficit of $3,479,000.

To date, we have principally financed our operations through the sale of our Common Stock. Nevertheless, management anticipates that our current cash and cash equivalents position and generating revenue from the sales of our digital products, General-Purpose Reloadable Cards and prepaid cellular phone services will provide us limited financial resources for the near future to continue implementing our business strategy of further developing our digital products, General Purpose Reloadable Card, enhance our digital products offering and increase our sales and marketing. Therefore management plans to secure additional financing sources, including but not limited to the sale of our Common Stock in future financings. This is expected to be used to further support our operations as described above and to complete the development of its new portal and financial technology capabilities. There can be no assurance, however, that the company will be successful in raising additional capital or that the company will have net income from operations to fund the business plan of the company for the near future or long term. As of March 31, 2026, the Company had approximately $72 in cash and cash equivalents, approximately $3,479,000 in negative working capital and an accumulated deficit of approximately $60,323,000. These conditions raise substantial doubt about the Company's ability to continue as a going concern as of March 31, 2026.

Cash Flows - Operating Activities

The Company's operating activities for the three months ended March 31, 2026, resulted in net cash used of $190,000. Net cash used in operating activities consisted of a net loss of $497,000, partially offset by non-cash expenses mainly consisting of share-based compensation of $43,000 and changes in operating assets and liabilities utilized cash of $136,000.

The Company's operating activities for the three months ended March 31, 2025, resulted in net cash used of $15,000. Net cash used in operating activities consisted of a net loss of $399,000, partially offset by non-cash expenses consisting of share-based compensation of $18,000 and accrued interest on loans of $116,000. Changes in operating assets and liabilities utilized cash of $250,000.

Cash Flows - Financing Activities

The Company's financing activities for the three months ended March 31, 2026, resulted in net cash received of $205,000, mainly consisting of $300,000 received from issued shares and $95,000 repayment of loans.

Inflation and Seasonality

In management's opinion, our results of operations have not been materially affected by inflation or seasonality, and management does not expect that inflation risk or seasonality would cause material impact on our operations in the future.

Off-Balance Sheet Arrangements

As of March 31, 2026, we had no off-balance sheet arrangements of any nature.

Critical Accounting Policies

The preparation of financial statements in conformity with GAAP in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported in the financial statements, including the notes thereto, and related disclosures of commitments and contingencies, if any. Note 2 to our consolidated audited financial statements filed with the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2026, describes the significant accounting policies and methods used in the preparation of our financial statements.

Recently Issued Accounting Standards

New pronouncements issued but not effective as of March 31, 2026, are not expected to have a material impact on the Company's consolidated financial statements.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption.