Cuentas Inc. (CUEN) is a financially distressed OTC-traded entity showing improving loss trends but currently suffering from severe negative working capital and deep accumulated deficits.
An investor might buy CUEN based on the clear trend of loss reduction, with net income improving from -$14.5M to -$3.3M over the last three years. The company still generates positive cash flow from financing and investing activities, which could fund future operations or acquisitions if a viable business model is re-established.
An investor should avoid CUEN due to its negative shareholders' equity of -$3.2M and a massive retained earnings deficit of -$58.3M that threatens the company's long-term viability. The severe cash burn of -$190k in net change and negative operating cash flow of -$598k suggests the business cannot sustain itself without external capital injections.
Cuentas Inc. (CUEN) is a financial technology or payment processing entity operating with significant cash flow challenges, having generated $676k in revenue by 2024 while reporting a net loss of $3.3M. The company faces severe liquidity pressures with current liabilities exceeding current assets by $3.2M and a substantial retained earnings deficit of $58.3M. Despite these metrics, the firm has seen a notable reduction in annual losses from $14.5M in 2022 to $3.3M in 2024, suggesting a potential stabilization phase or restructuring effort.
Management has achieved a significant turnaround in profitability metrics, reducing the net loss from $14.5 million in 2022 to $3.3 million in 2024 while maintaining a small positive cash position of $15k. However, the deterioration in gross profit to -$75k and operating profit of -$2M indicates that core operational margins are under pressure despite revenue growth slowing from $3.0M to $0.7M.
The industry appears to be highly competitive with thin margins, as evidenced by Cuentas' gross profit turning negative while still trying to maintain operations. The sector likely favors companies with strong balance sheets, given CUEN's current inability to cover its current liabilities of $4.3M with its current assets of $1.1M.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $3.0M | $2.3M | $676.0K |
| Cost of Revenue | $2.5M | $2.7M | $751.0K |
| Gross Profit | $486.0K | $-387.0K | $-75.0K |
| Operating Expenses | $14.8M | $6.0M | $1.9M |
| Operating Income | $-14.4M | $-6.4M | $-2.0M |
| G&A | $9.4M | $6.0M | $1.9M |
| Stock-Based Comp | $1.7M | $622.0K | $209.0K |
| D&A | $3.0K | $4.0K | — |
| Amortization | $1.8M | $11.0K | $2.0K |
| Other OpEx | $5.4M | $11.0K | $19.0K |
| Non-Operating Income | $14.4M | $4.3M | $-1.3M |
| Interest Expense | — | $-70.0K | — |
| Pre-Tax Income | $14.5K | $-2.1M | $-3.3M |
| Income Tax | $0 | $0 | $0 |
| Continuing Ops | $14.5K | $-2.1M | $-3.3M |
| Discontinued Ops | $-14.5M | $-87.0K | $0 |
| Net Income | $-14.5M | $-2.2M | $-3.3M |
| Minority Interest | $52.0K | $0 | $0 |
| Net to Common | $-14.5M | $-2.2M | $-3.3M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $689.0K | $1.8M | $1.1M |
| Cash & Equivalents | — | $205.0K | $15.0K |
| Accounts Receivable | $209.0K | $7.0K | — |
| Other Current Assets | $480.0K | $1.5M | $1.1M |
| Long-Term Assets | $810.0K | $3.0M | $0 |
| PP&E (Net) | $6.0K | $13.0K | — |
| Intangibles | $28.0K | $19.0K | — |
| Other LT Assets | $776.0K | $2.9M | — |
| Total Assets | $1.5M | $4.7M | $1.1M |
| Current Liabilities | $2.1M | $4.7M | $4.3M |
| Accounts Payable | $1.2M | $1.5M | — |
| Other Current Liab | $903.0K | $3.2M | — |
| Long-Term Liabilities | $89.0K | $101.0K | $0 |
| Total Liabilities | $2.2M | $4.8M | $4.3M |
| Shareholders' Equity | $-724.0K | $-70.0K | $-3.2M |
| Paid-In Capital | $52.0M | — | — |
| Retained Earnings | $-52.8M | $-54.9M | $-58.3M |
| Treasury Stock | $29.0K | — | — |
| Total L&E | $1.5M | $4.7M | $1.1M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $-14.5M | $-2.2M | $-3.3M |
| Non-Cash Adjustments | $5.9M | $-5.2M | $4.1M |
| Working Capital Changes | $422.0K | $3.2M | $-1.4M |
| Cash from Operations | $-8.1M | $-4.2M | $-598.0K |
| Capital Expenditures | $7.0K | $11.0K | — |
| Cash from Investing | $-664.0K | $-2.1M | $92.0K |
| Share Buybacks | — | $4.0K | — |
| Cash from Financing | $2.7M | $6.0M | $316.0K |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $-6.1M | $-261.0K | $-190.0K |
| Beginning Cash | $6.6M | $466.0K | $205.0K |
| Ending Cash | $466.0K | $205.0K | $15.0K |
The company's operations appear to rely heavily on continuing operations which generated $676k in revenue, while non-operating losses of $1.3M indicate potential interest expense or foreign exchange impacts. The financial structure suggests a lack of diversified long-term assets, with all current assets ($1.1M) likely tied up in working capital cycles against $4.3M in liabilities.
The company is insolvent with shareholders' equity at -$3.2M and a retained earnings deficit of -$58.3M, posing an immediate risk of liquidation or restructuring. Working capital is negative at $1.4M due to changes in accounts payable and receivable, creating severe liquidity constraints. Significant non-cash adjustments totaling $4.1M suggest aggressive accounting or asset impairments that may not reflect true operational cash generation.
The company has successfully reduced its net loss by over 80% over the last three years, dropping from $14.5M in 2022 to $3.3M in 2024. The business model appears capable of generating positive cash flow from financing activities ($316k) and investing activities ($92k), potentially indicating access to capital or asset monetization strategies.
Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.