Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 24, 2021 | Jun. 30, 2020 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Cuentas Inc. | ||
Entity Central Index Key | 0001424657 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Current Reporting Status | Yes | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Common Stock, Shares Outstanding | 13,819,601 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 11,065,110 | ||
Entity File Number | 001-39973 | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation, State or Country Code | FL |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 227 | $ 16 |
Marketable securities | 3 | 1 |
Related parties | 54 | 54 |
Other current assets | 12 | 94 |
Total current assets | 296 | 165 |
Property and Equipment, net | 4 | 5 |
Intangible Assets (Note 2) | 7,200 | 9,000 |
Total assets | 7,500 | 9,170 |
CURRENT LIABILITIES: | ||
Trade payable | 2,354 | 1,525 |
Other accounts liabilities (Note 4) | 2,195 | 741 |
Deferred revenue | 652 | 537 |
Notes and Loan payable | 93 | 109 |
Convertible notes payable (Note 5) | 719 | 250 |
Derivative liability | 3 | |
Related parties’ payables (Note 6) | 365 | 10 |
Stock based liabilities | 102 | 742 |
Total current liabilities | 6,480 | 3,917 |
Other long term | 89 | |
TOTAL LIABILITIES | 6,569 | 3,917 |
STOCKHOLDERS’ EQUITY (Note 7) | ||
Series B preferred stock, $0.001 par value, designated 10,000,000; 0 issued and outstanding as of December 31, 2020 and 10,000,000 issued and outstanding as of December 31, 2019. | 10 | |
Common stock, authorized 360,000,000 shares, $0.001 par value; 10,590,491 and 1,855,656 issued and outstanding as of December 31, 2020 and December 31, 2019, respectively | 11 | 2 |
Additional paid in capital | 28,411 | 25,249 |
Accumulated deficit | (27,491) | (19,390) |
Total Cuentas Inc. stockholders’ equity | 931 | 5,871 |
Non-controlling interest in subsidiaries | (618) | |
Total stockholders’ equity | 931 | 5,253 |
Total liabilities and stockholders’ equity | $ 7,500 | $ 9,170 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Common stock, shares authorized | 360,000,000 | 360,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares issued | 10,590,491 | 1,855,656 |
Common stock, shares outstanding | 10,590,491 | 1,855,656 |
Series B Preferred Stock | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares designated | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 10,000,000 |
Preferred stock, shares outstanding | 0 | 10,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
REVENUE | $ 558 | $ 967 |
COST OF REVENUE | 697 | 808 |
GROSS PROFIT (LOSS) | (139) | 159 |
OPERATING EXPENSES | ||
General and administrative | 5,840 | 2,305 |
Amortization of Intangible Assets | 1,800 | |
TOTAL OPERATING EXPENSES | 7,640 | 2,305 |
OPERATING LOSS | (7,779) | (2,146) |
OTHER INCOME, NET | ||
Other income, net | 98 | 2,482 |
Interest expense | (108) | (1,092) |
Gain on derivative liability | 3 | 30 |
Gain (loss) from Change in fair value of stock-based liabilities | 303 | (560) |
TOTAL OTHER INCOME, NET | 296 | 860 |
NET LOSS BEFORE CONTROLLING INTEREST | (7,483) | (1,286) |
NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (618) | (34) |
NET LOSS ATTRIBUTABLE TO CUENTAS INC. | $ (8,101) | $ (1,320) |
Basic and Diluted net loss per share | $ (1.16) | $ (1.45) |
Weighted average number of basic and diluted shares of common stock outstanding | 6,968,554 | 913,881 |
Statements of Changes in Shareh
Statements of Changes in Shareholders’ Equity - USD ($) $ in Thousands | Series B Preferred Stock | Common Stock | Common Stock Subscribed | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Deficit | Non-Controlling Interest Additional Paid-in Capital | Non-Controlling Interest Accumulated Deficit | Total Non-Controlling Interest | Total | ||
Beginning balance at Dec. 31, 2018 | $ 10 | $ 1 | $ 100 | $ 12,161 | $ (18,070) | $ (5,798) | $ 43 | $ (695) | $ (652) | $ (6,450) | ||
Beginning balance, shares at Dec. 31, 2018 | 10,000,000 | 635,577 | ||||||||||
Committed shares issued | [1] | (100) | 100 | |||||||||
Committed shares issued, shares | 13,600 | |||||||||||
Shares issued for services | [1] | 989 | 989 | 989 | ||||||||
Shares issued for services, shares | 163,932 | |||||||||||
Shares issued for conversion of convertible note | $ 1 | 11,017 | 11,018 | 11,018 | ||||||||
Shares issued for conversion of convertible note, shares | 836,325 | |||||||||||
Shares issued for cash | [2] | [1] | 539 | 539 | 539 | |||||||
Shares issued for cash, shares | [2] | 163,058 | ||||||||||
Shares issued due to the Rescission of the Limecom Acquisition | [1] | 376 | 376 | 376 | ||||||||
Shares issued due to the Rescission of the Limecom Acquisition, shares | 43,164 | |||||||||||
Forgiveness of imputed interest on related party payable | 67 | 67 | 67 | |||||||||
Net income for year | (1,320) | (1,320) | 34 | 34 | (1,286) | |||||||
Ending balance at Dec. 31, 2019 | $ 10 | $ 2 | 25,249 | (19,390) | 5,871 | 43 | (661) | (618) | 5,253 | |||
Ending balance, shares at Dec. 31, 2019 | 10,000,000 | 1,855,656 | ||||||||||
Shares of Common Stock were issued in consideration of Commitment fee | [1] | 90 | 90 | 90 | ||||||||
Shares of Common Stock were issued in consideration of Commitment fee, shares | 56,725 | |||||||||||
Conversion of Series B Preferred Stock into Common Stock | $ (10) | $ 8 | 2 | |||||||||
Conversion of Series B Preferred Stock into Common Stock, shares | (10,000,000) | 8,000,000 | ||||||||||
Shares issued for services | [1] | 420 | 420 | 420 | ||||||||
Shares issued for services, shares | 36,000 | |||||||||||
Shares issued for conversion of convertible note | $ 1 | 1,004 | 1,005 | 1,005 | ||||||||
Shares issued for conversion of convertible note, shares | 503,115 | |||||||||||
Warrants and Stock options compensation | [1] | 1,646 | 1,646 | 1,646 | ||||||||
Warrants and Stock options compensation, shares | 138,995 | |||||||||||
Net income for year | (8,101) | (8,101) | (43) | 661 | 618 | (7,483) | ||||||
Ending balance at Dec. 31, 2020 | $ 11 | $ 28,411 | $ (27,491) | $ 931 | $ 931 | |||||||
Ending balance, shares at Dec. 31, 2020 | 10,590,491 | |||||||||||
[1] | Less than $1. | |||||||||||
[2] | Issuance cost during the period were $10 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (7,483) | $ (1,286) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Stock based compensation and Shares issued for services | 1,444 | 487 |
Imputed interest | 67 | |
Available for sale securities | (2) | 78 |
Interest expense and Debt discount amortization | 58 | 1,017 |
Gain on derivative liability | (3) | (30) |
Gain (loss) on fair value measurement of stock-based liabilities | (220) | 560 |
Depreciation expense | 1 | 1 |
Amortization of intangible assets | 1,800 | |
Changes in Operating Assets and Liabilities: | ||
Accounts receivable | 18 | |
Other receivables | 82 | (24) |
Accounts payable | 843 | (217) |
Related party, net | (2,356) | |
Other accounts payables | 1,647 | 416 |
Deferred revenue | 115 | (46) |
Other liabilities | (20) | |
Net Cash Used by Operating Activities | (1,738) | (1,315) |
Cash Flows from Financing Activities: | ||
Proceeds from (Repayments of) convertible notes | 250 | 250 |
Related parties, net | (664) | |
Proceeds from short term loans | 505 | |
Proceeds from Loans from Related parties | 355 | |
Proceeds from loans from a Government Agency | 89 | |
Proceeds from issuance of shares, net of issuance cost | 750 | 1,591 |
Net Cash Provided by Financing Activities | 1,949 | 1,177 |
Net Increase (Decrease) in Cash | 211 | (138) |
Cash at Beginning of Period | 16 | 154 |
Cash at End of Period | 227 | 16 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | ||
Cash paid for income taxes | ||
Supplemental disclosure of non-cash financing activities | ||
Common stock issued for conversion of convertible note principal | 2,500 | |
Common Stock issued for conversion of convertible note issued against Other Assets | 9,000 | |
Common stock issued for settlement of stock-based liabilities and accrued salaries | 442 | 735 |
Shares of Common Stock were issued in consideration of Commitment fee | 90 | |
Common stock issued for settlement of common stock subscribed | $ 100 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Cuentas, Inc. (the "Company") together with its subsidiaries, is focused on financial technology ("FINTECH") services, delivering mobile banking, online banking, prepaid debit and digital content services to unbanked, underbanked and underserved communities. The Company derives its revenue from the sales of prepaid and wholesale calling minutes. Additionally, The Company has an agreement with Interactive Communications International, Inc. ("InComm") a leading processor of general purpose reloadable ("GPR") debit cards, to market and distribute a line of GPR cards targeted towards the Latin American market. The Company was incorporated under the laws of the State of Florida on September 21, 2005 to act as a holding company for its subsidiaries. Its subsidiaries are Meimoun and Mammon, LLC (100% owned) ("M&M"), Next Cala, Inc. (94% owned -was dissolved on July 3, 2020) ("Cala"), NxtGn, Inc. (65% owned-was dissolved on August 24, 2020) ("NxtGn") and Cuentas Mobile LLC (formerly Next Mobile 360, LLC. - 100% owned). Additionally, Next Cala, Inc. had a 60% interest in NextGlocal Inc. ("NextGlocal"), a subsidiary formed in May 2016 and which was dissolved on September 27, 2019. Tel3, a business segment of Meimoun and Mammon, LLC provides prepaid calling cards to consumers directly and operates in a complimentary space as Meimoun and Mammon, LLC. On October 23, 2017, the Company acquired 100% of the outstanding shares in Limecom, Inc., ("Limecom" and such acquisition, the "Limecom Acquisition") from Heritage Ventures Limited ("Heritage"). On January 30, 2019, the Company exercised a right to rescind the Limecom Acquisition, principally in an effort to reduce the Company's continuing debt obligations associated with the Limecom Acquisition. On December 6, 2017, the Company completed its formation of SDI NEXT DISTRUBUTION LLC ("SDI Next") in which the Company owns a 51% membership interest, previously announced August 24, 2017 in a letter of intent with Fisk Holdings, LLC ("Fisk Holdings"). Per the Operating Agreement of SDI Next, the Company and Fisk Holdings will serve as the Managing Members of SDI Next and the Company will contribute a total of $500,000, to be paid per an agreed-upon schedule over a twelve-month period. Fisk Holdings will contribute 30,000 active point of sale locations for distribution of retail telecommunications and prepaid financial products and services to include, but not be limited to: prepaid GPR cards, prepaid gift cards, prepaid money transfer, prepaid utility payments, and other prepaid products. The completed formation of an established distribution business for third-party gift cards, digital content, mobile top up, financial services and digital content, which presently includes more than 31,600 U.S. active Point of Sale locations, including store locations, convenience stores, bodegas, store fronts, etc. The parties agreed that additional product lines may be added with unanimous decision by the Managing Members of SDI Next. During 2018, it was agreed between the parties to distribute the Company's recently announced CUENTAS GPR card and mobile banking solution aimed to the unbanked, underbanked and financially underserved consumers, making them available to customers at the more than 31,600 retail locations SDI Next presently serves. SDI Next was dissolved on August 22, 2020. On December 31, 2019, the Company entered into a series of integrated transactions to license the Platforms from CIMA, through CIMA's wholly owned subsidiaries Knetik, and Auris (the "Transaction Closing") pursuant to that certain Platform License Agreement, dated December 31, 2019 by and among (i) the Company, (ii) CIMA, (iii) Knetik and (iv) Auris (the "License Agreement") and the various other agreements listed below. Under the License Agreement Cima received a one-time licensing fee in the amount of $9,000 in the form of a convertible note that may be converted, at the option of Cima, into up to 25% of the total shares of Common Stock of the Company, par value $0.001 per share (the "Common Stock") on a fully diluted basis as of December 31, 2019. On December 31, 2019, CIMA exercised its option to convert the Convertible Promissory Note into 702,992 shares of Common Stock of the Company. Upon the conversion of the Series B Preferred shares into common stock, CIMA received an additional five million shares pursuant to their anti-dilution warrant agreement. The acquired intangible assets that consisted of perpetual software license had an estimated fair value of $9,000. The Company will amortize the intangible assets on a straight-line basis over their expected useful life of 60 months. Identifiable intangible assets were recorded as follows: Asset Amount Life Intangible Assets $ 9,000 60 Total $ 9,000 60 Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed periodically for impairment. Amortization of intangible assets for each of the next five years and thereafter is expected to be as follows: Year ended December 31, 2021 $ 1,800 2022 1,800 2023 1,800 2024 1,800 Total $ 7,200 Amortization expense was $1,800 and $0 for the years ended December 31, 2020 and December 31, 2019, respectively. Amortization expense for each period is included in operating expenses. Pursuant to the License Agreement, the Company shall pay CIMA annual fees for the maintenance and support services in accordance with the following schedule: (i) for the first (1st) calendar year from the Effective Date, $300 were paid in 2020; (ii) for the second (2nd) calendar year from the Effective Date, $500 to be paid on December 31, 2020; (iii) for the third (3rd) calendar year from the Effective Date, $700 to be paid on December 31, 2021; (iv) for the fourth (4th) calendar year from the Effective Date, $1,000 to be paid on December 31, 2022; (v) for the fifth (5th) calendar year from the Effective Date, $640 to be paid on December 31, 2022; and (vi) for each calendar year thereafter, $640 to be paid on the anniversary date (see Further explanation in Note 2). REVERSE SPLIT On February 2, 2021, the Company completed a reverse stock split of its common stock. As a result of the reverse stock split, the following changes have occurred (i) every two and a half shares of common stock have been combined into one share of common stock; (ii) the number of shares of common stock underlying each common stock option or common stock warrant have been proportionately decreased on a 2.5-for-1 basis, and the exercise price of each such outstanding stock option and common warrant has been proportionately increased on a 2.5-for-1 basis. Accordingly, all option numbers, share numbers, warrant numbers, share prices, warrant prices, exercise prices and losses per share have been adjusted within these consolidated financial statements, on a retroactive basis, to reflect this 2.5-for-1 reverse stock split. COVID-19 In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a "Public Health Emergency of International Concern." On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as a "pandemic". A significant outbreak of COVID-19 and other infectious diseases could result in a widespread health crisis that could adversely affect the economies and financial markets worldwide, as well as our business and operations. The extent to which COVID-19 impacts our business and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our business and results of operations may be materially adversely affected. |
Cima Telecom Inc
Cima Telecom Inc | 12 Months Ended |
Dec. 31, 2020 | |
Cima Telecom Inc [Abstract] | |
Cima Telecom Inc | NOTE 2 – Cima Telecom Inc. On December 31, 2019, the Company entered into a series of integrated transactions to license the Platforms from CIMA, through CIMA's wholly owned subsidiaries Knetik, and Auris (the "Transaction Closing") pursuant to that certain Platform License Agreement, dated December 31, 2019 by and among (i) the Company, (ii) CIMA, (iii) Knetik and (iv) Auris (the "License Agreement") and the various other agreements listed below. License Agreement Contemporaneously with the Transaction Closing, on December 31, 2019 (the "Effective Date") the Company entered into the License Agreement. Pursuant to the License Agreement, the Company has an exclusive, non-transferable, non-sublicensable, royalty-free license to access and use the Knetik and Auris technology platforms (collectively, the "Licensed Technology") in the form provided to the Company via the Hosting Services (as defined in the License Agreement) and solely within the FINTECH space for the Company's business purposes. Under the License Agreement Cima received a one-time licensing fee in the amount of $9,000 in the form of a convertible note that may be converted, at the option of Cima, into up to 25% of the total shares of Common Stock of the Company, par value $0.001 per share (the "Common Stock") on a fully diluted basis as of December 31, 2019. On December 31, 2019, CIMA exercised its option to convert the Convertible Promissory Note into 702,992 shares of Common Stock of the Company. Pursuant to the License Agreement, the Company shall pay CIMA annual fees for the maintenance and support services in accordance with the following schedule: (i) for the first (1st) calendar year from the Effective Date, $300 to be paid on June 30, 2020; (ii) for the second (2nd) calendar year from the Effective Date, $500 to be paid on December 31, 2020; (iii) for the third (3rd) calendar year from the Effective Date, $700 to be paid on December 31, 2021; (iv) for the fourth (4th) calendar year from the Effective Date, $1,000 to be paid on December 31, 2022; (v) for the fifth (5th) calendar year from the Effective Date, $640 to be paid on December 31, 2022; and (vi) for each calendar year thereafter, $640 to be paid on the anniversary date. Voting Agreement Contemporaneously with the Transaction Closing, on December 31, 2019, the Company entered into that certain voting agreement and proxy (the "Voting Agreement"), by and among the Company, Arik Maimon, the Company's Chief Executive Officer, Michael De Prado, the Company's President, Dinar, and CIMA. Pursuant to the Voting Agreement, each of CIMA, Dinar and Mr. De Prado shall have the right to designate one director to the Company's Board of Directors and Mr. Maimon will have the right to designate two directors to the Board as promptly as practicable after the Transaction Closing. At each meeting of the Company's stockholders at which the election of directors is to be considered, each of CIMA, Dinar, Mr. Maimon and Mr. De Prado shall have the right to designate one nominee for election at such meeting. Additionally, the Company has granted CIMA board observer rights whereby CIMA shall have the right to invite one representative to attend all meetings of the Board in a non-voting observer capacity. The size of the Board and appointee rights are subject to change in the event that the Company's shares of Common Stock become listed on the Nasdaq Capital Market (or if there is any other similar transaction which ultimately involves the listing of the Company's capital stock, whether Common Stock or any other class or series of capital stock of the Company, on any exchange affiliated with or similar to Nasdaq). Furthermore, pursuant to the Voting Agreement, each of Mr. Maimon and Mr. De Prado appointed each of CIMA and Dinar as their proxy and attorney-in-fact, with full with full power of substitution and resubstitution, to vote or act by written consent with respect to the shares of Voting Stock (as defined in the Voting Agreement) representing each individual's pro rata percentage of the CIMA Proxy Stock and Dinar Proxy Stock (as defined in the Voting Agreement), as may be recalculated from time to time subject to the terms and conditions of the Voting Agreement, until the CIMA Warrant is exercised and until the Dinar Warrant is exercised, respectively. Note and Warrant Purchase Agreement Contemporaneously with the Transaction Closing, the Company entered into a Note and Warrant Purchase Agreement (the "Purchase Agreement") by and between the Company and CIMA, pursuant to which the Company made and sold to (i) CIMA a 3% convertible promissory note (the "Convertible Promissory Note") in the principal amount of $9,000 and (ii) (a) CIMA a warrant (the "CIMA Warrant") , to purchase from the Company an aggregate of duly authorized, validly issued, fully paid and nonassessable shares (the "Shares") of common stock of the Company, par value $0.001 per share (the "Common Stock"), equal to 25% of shares of Common Stock or any other equity issued upon the conversion of the Series B preferred stock. The Purchase Agreement contained customary representations, warranties, covenants, and conditions, including indemnification. Among other conditions to closing, the Company has agreed to take all necessary steps to amend and restate its Articles of Incorporation (the "A&R Articles") and to amend and restate its Bylaws (the "A&R Bylaws") and properly file and effect such A&R Articles and A&R Bylaws with the Secretary of State of the State of Florida and the U.S. Securities and Exchange Commission, each as necessary, no later than June 30, 2020. Convertible Promissory Note Contemporaneously with the Transaction Closing, the Company made and sold to CIMA a convertible promissory note (the "CIMA Convertible Promissory Note") in accordance with the Purchase Agreement. Pursuant to the Convertible Promissory Note, at any time on or before twelve months after the date of the CIMA Convertible Promissory Note, CIMA may elect in its sole and absolute discretion to convert all unpaid principal and accrued and unpaid interest under the CIMA Convertible Promissory Note into 25% of the issued and outstanding Common Stock of the Company calculated on a fully diluted basis as of the conversion date, assuming the conversion, exercise, and exchange of all equity and debt securities of the Company which are convertible into, or exercisable or exchangeable for, Common Stock of the Company, but not including the Warrants. On December 31, 2019, CIMA exercised its option to convert the Convertible Promissory Note into 702,992 shares of Common Stock of the Company, which constitutes 25% of the issued and outstanding shares of Common Stock of the Company calculated on a fully diluted basis as of the same date. Warrants Contemporaneously with the Transaction Closing, the Company made and sold a warrant to each of (a) CIMA (the "CIMA Warrant") and (b) Dinar (the "Dinar Warrant," and together with the CIMA Warrant, the "Warrants"), each in accordance with the Purchase Agreement. Pursuant to the Warrants, upon exercise, each of CIMA and Dinar shall be entitled to purchase from the Company, in the aggregate, an amount of duly authorized, validly issued, fully paid and nonassessable shares of Common Stock equal to 25% of total outstanding shares of the Company on a fully-diluted basis (taking into account any warrants, options, debt convertible into shares or other rights underlying shares of the Company) as of the conversion date; provided, however, that each Warrant shall increase to include 25% of any additional shares (or warrants, options, debt convertible into shares or other rights underlying shares of the Company) of the Company only to the extent such shares are issued in breach of the Voting Agreement (as defined below). Pursuant to their terms, the Warrants are exercisable, in whole and not in part during the term commencing on December 31, 2019 and ending on the earlier of (a) thirty days following the date on which the Company amends and restates its Articles of Incorporation, which is amendment and restatement is filed with and accepted by the Secretary of State of the State of Florida or (b) upon a Change of Control, as defined in the Warrants. On September 17, 2020, the Company issued 2,000,000 of its Common Stock to each of Dinar and CIMA, under the automatic exercise of the warrants. Asset Pledge Agreement Contemporaneously with the Transaction Closing, the Company entered into an Asset Pledge Agreement with CIMA (the "Pledge Agreement"). Pursuant to the Pledge Agreement, the Company unconditionally and irrevocably pledged all of its rights, title and interest in and to the Licensed Technology and any rights and assets granted pursuant to the License Agreement to CIMA as a guarantee for the full and punctual fulfillment of its obligations under certain provisions of the Voting Agreement, and the issuance of the securities under the CIMA Convertible Promissory Note and the CIMA Warrant. Side Letter Agreement Contemporaneously with the Transaction Closing, the Company entered into a side letter agreement (the "Side Letter Agreement"), dated December 31, 2019, by and among the Company, Arik Maimon, Michael De Prado, Dinar and CIMA. Pursuant to the Side Letter Agreement, for as long as the License Agreement is in effect, the Convertible Promissory Note is outstanding and unpaid, or CIMA is a shareholder of the Company and owns at least 5% of the Company's Common Stock, in addition to any other vote or approval required under the Company's Articles of Incorporation, Bylaws, or any other agreement, each as amended from time to time, the Company has agreed not to take certain actions without certain approval thresholds of the directors appointed by CIMA, Dinar, Mr. Maimon and Mr. De Prado. These negative covenants restrict, among other things, the Company's ability to incur additional debt, alter certain employment agreements currently in place, enter into any consolidation, combination, recapitalization or reorganization transactions, and issue additional capital stock. Additionally, pursuant to the Side Letter Agreement, upon conversion of the Convertible Promissory Note by CIMA, Cuentas shall have the primary right of first refusal, and each of Dinar, Mr. De Prado and Mr. Maimon have a secondary right of first refusal, to purchase any shares of Common Stock which CIMA intends to sell to the bona fide third party purchaser on the same terms and conditions as CIMA would have sold such shares of the Company's Common Stock to any third party purchaser. Further, CIMA has a co-sale right to participate in a sale of shares of the Company's Common Stock, in the event that Mr. De Prado, Mr. Maimon or any other director or officer of the Company holding greater than 1% of the Company's Common Stock (on a fully diluted basis) proposes to sell any of his, her or its shares of Common Stock. In addition, CIMA and/or Dinar have been granted certain information rights, subject to their continued ownership of the CIMA Convertible Promissory Note or of 5% or more shares of the Company's issued and outstanding Common Stock. Furthermore, pursuant to the Side Letter Agreement, upon a successful up-listing of the Company's shares on the Nasdaq Capital Markets and once the market capitalization of the Company is greater than $50 million for a period of 10 consecutive trading days, Mr. Maimon and Mr. De Prado will have a right to earn a special bonus in the amount of $500 each. Interactive Communications International, Inc. ("InComm") On July 23, 2019, the Company entered into a five year Processing Services Agreement ("PSA") with InComm, a leading payments technology company, to power and expand the Company's GPR card network. InComm distributes Gift and GPR Cards to over 210,000 U.S. retailers and has long standing partnerships with over 1,000 of the most recognized brands that are eligible for Cuentas' Discount Purchase Platform. Under the PSA, InComm will provide processing services, Data Storage Services, Account Servicing, Reporting, Output and Hot Carding services to the Company. Processing Services will consist mainly of Authorization and Transaction Processing Services whereas InComm will process authorizations for transactions made with or on a Prepaid Product, and any payments or adjustments made to a Prepaid Product. InComm will also process Company's Data and post entries in accordance with the Specifications. Data Storage Services will consist mainly of storage of the Company's Data in a format that is accessible online by Company through APIs designated by InComm, subject to additional API and data sharing terms and conditions. InComm will also provide Web/API services for Prepaid Cuentas GPR applications and transactions. In consideration for InComm's services, the company will pay an initial Program Setup & Implementation Fees in the amount of $500, of which $300 were paid during 2020, then $50 each at the beginning of the second, third, fourth and fifth anniversary of the agreement. In addition, the Company will pay a minimum monthly fee of $30 starting on the fourth month of the first year following the launch of the Cuentas GPR card, $50 during the second year following the launch of the Cuentas GPR card and $75 thereafter. The Company will as also pay 0.25% of all funds added to the Cuentas GPR cards, excluding Vanilla Direct Reload Network and an API Services fee of $0.005 per transaction. The Company may pay other fees as agreed between the Company and InComm. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Basis of Presentation | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP"). Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States ("'US GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. As applicable to the consolidated financial statements, the most significant estimates and assumptions relate to allowances for impairment of intangible assets and fair value of stock-based compensation and fair value calculations related to embedded derivative features of outstanding convertible notes payable. Principles of consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Functional currency The functional currency of the company and its subsidiaries is U.S dollar. Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. Cash and cash equivalents The Company considers all short-term investments, which are highly liquid investments with original maturities of three months or less at the date of purchase, to be cash equivalents. The Company held no cash equivalents as of December 31, 2020 or 2019. As of December 31, 2020, and 2019, the Company did not hold cash with any one financial institution in excess of the FDIC insured limit of $250. Marketable securities The Company accounts for investments in marketable securities in accordance with ASC Topic 320-10, "Investments - Debt and Equity Securities" Allowance for doubtful accounts The allowance for doubtful accounts is determined with respect to amounts the Company has determined to be doubtful of collection. In determining the allowance for doubtful accounts, the Company considers, among other things, its past experience with customers, the length of time that the balance is post due, the customer's current ability to pay and available information about the credit risk on such customers. There was an allowance for doubtful accounts of $20 as of December 31, 2020 and 2019. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. The Company provides for depreciation and amortization using the straight-line method over the estimated useful lives of the related assets, which range from three to five years. Impairment of Long-Lived Assets In accordance with ASC Topic 360, formerly SFAS No. 144, " Accounting for the Impairment or Disposal of Long-Lived Assets Derivative Liabilities and Fair Value of Financial Instruments Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC Topic 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC Topic 815. Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. Fair value of certain of the Company's financial instruments including cash, accounts receivable, account payable, accrued expenses, notes payables, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC Topic 820, "Fair Value Measurements and Disclosure" Fair value, as defined in ASC Topic 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company's credit risk. Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC Topic 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC Topic 820 also provides fair value hierarchy for inputs and resulting measurement as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values. Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), (ii) segregating those gains or losses included in earnings and (iii) a description of where those gains or losses included in earning are reported in the statement of income. The Company records a debt discount related to the issuance of convertible debts that have conversion features at adjustable rates. The debt discount for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the fair value of the conversion features. The debt discount will be accreted by recording additional non-cash gains and losses related to the change in fair values of derivative liabilities over the life of the convertible notes. A summary of the changes in derivative liabilities balance for the year ended December 31, 2020 is as follows: Fair Value of Embedded Derivative Liabilities: Balance, December 31, 2018 $ 33 Change in fair value (30 ) Balance, December 31, 2019 3 Change in fair value (3 ) Balance, December 31, 2020 $ - The value of the embedded derivative liabilities for the convertible notes payable and outstanding option awards was determined using the Black-Scholes option pricing model based on the following assumptions: December 31, Common stock price 5.7 Expected volatility 220 % Expected term 0.25 years Risk free rate 1.55 % Forfeiture rate 0 % Expected dividend yield 0 % The Company's financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy are as follows: Balance as of December 31, 2020 Level 1 Level 2 Level 3 Total Assets: Marketable securities 3 - - 3 Total assets 3 - - 3 Liabilities: Stock based liabilities 102 - - 102 Total liabilities 102 - - 102 Balance as of December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Marketable securities 1 - - 1 Total assets 1 - - 1 Liabilities: Stock based liabilities 742 - - 742 Short term derivative value 3 - - 3 Total liabilities 745 - - 745 Deferred Revenue The Company records deferred revenue for any upfront payments received in advance of the Company's performance obligations being satisfied. These contract liabilities consist principally of unearned new minutes fees. Changes in the deferred revenue balance are driven primarily by the amount of new minutes fees recognized during the period, and the degree to which these reductions to the deferred revenue balance are offset by the deferral of new minutes fees associated with minutes sold during the period. Non-Controlling Interest The Company reports the non-controlling interest in its majority owned subsidiaries in the consolidated balance sheets within the stockholders' deficit section, separately from the Company's stockholders' deficit. Non-controlling interest represents the non-controlling interest holders' proportionate share of the equity of the Company's majority-owned subsidiaries. Non-controlling interest is adjusted for the non-controlling interest holders' proportionate share of the earnings or losses and other comprehensive income (loss) and the non-controlling interest continues to be attributed its share of losses even if that attribution results in a deficit non-controlling interest balance. Revenue Recognition The Company follows paragraph 605-10-S99 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable and (iv) collectability is reasonably assured. The Company primarily generates revenues through the brokering of sales of minutes from one telecommunications carrier to another and to a lesser extent the sales of prepaid calling minutes to consumers through its Tel3 division. While the Company collects payment for such minutes in advance, revenue is recognized upon delivery to and consumption of minutes by the consumer. Minutes are forfeited buy the consumer after twelve consecutive months of non-use at which point the Company recognizes revenue from the forfeiture of prepaid minutes. Business Segments The Company operates in a two business segment in telecommunications and General Purpose Reloadable Cards. Income Taxes Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Use of net operating loss carry forwards for income tax purposes may be limited by Internal Revenue Code Section 382 if a change of ownership occurs. Net Loss Per Basic and Diluted Common Share Basic loss per share is calculated by dividing the Company's net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company's net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted average number of shares adjusted for any potentially dilutive debt or equity. At December 31, 2020, potentially dilutive securities consisted of 226,356 shares which of 135,200 options to purchase of common stock at prices ranging from $5.22 to $14.35 per share and 54,762 warrants to purchase of common stock at prices ranging from $8.12 to $20.00 per share. Additionally, the Company had a Convertible note totaling $250,000 representing an additional 36,394 common shares. The effects of these options, warrants and note been excluded as the conversion would be anti-dilutive due to the net loss incurred in the year ended December 31, 2020. At December 31, 2019, potentially dilutive securities consisted of 105,700 shares which the Company is obligated to issue and 84,818 options to purchase of common stock at prices ranging from $5.23 to $135 per share. Of these potentially dilutive securities, only 105,700 shares which the Company is obligated to issue and 56,000 options to purchase of common stock at price of $6.69 per share are included in the computation of diluted earnings per share. Additionally, the Company had a Convertible note totaling $250,000 representing an additional 33,334 common shares included in the computation of diluted earnings per share because the effect of including the remaining instruments would be anti-dilutive. The effects of these notes, common shares subscribed and common shares committed have been excluded as the conversion would be anti-dilutive due to the net loss incurred in the year ended December 31, 2019. Advertising Costs The Company's policy regarding advertising is to expense advertising when incurred. The Company incurred $88 and $25 of advertising costs during the years ended December 31, 2020 and 2019, respectively. Stock-Based Compensation The Company applies ASC Topic 718-10, "Share-Based Payment," which requires the measurement and recognition of compensation expenses for all share-based payment awards made to employees and directors (including employee stock options under the Company's stock plans) based on estimated fair values. ASC Topic 718-10 requires companies to estimate the fair value of equity-based payment awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's statement of operations. The Company recognizes compensation expenses for the value of non-employee awards based on the straight-line method over the requisite service period of each award, net of estimated forfeitures. The Company estimates the fair value of stock options granted as equity awards using a Black-Scholes options pricing model. The option-pricing model requires a number of assumptions, of which the most significant are share price, expected volatility and the expected option term (the time from the grant date until the options are exercised or expire). Expected volatility is estimated based on volatility of similar companies in the technology sector. The Company has historically not paid dividends and has no foreseeable plans to issue dividends. The risk-free interest rate is based on the yield from governmental zero-coupon bonds with an equivalent term. The expected option term is calculated for options granted to employees and directors using the "simplified" method. Grants to non-employees are based on the contractual term. Changes in the determination of each of the inputs can affect the fair value of the options granted and the results of operations of the Company. Related Parties The registrant follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 of the FASB Accounting Standards Codification, the Related parties include (a) affiliates of the registrant; (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the registrant; (e) management of the registrant; (f) other parties with which the registrant may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. Recently Issued Accounting Standards On August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40) ("ASU 2020-06"), which simplifies an issuer's accounting for convertible instruments and its application of the derivatives scope exception for contracts in its own equity. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company is currently evaluating the provisions of ASU 2020-06, but do not expect any material impact on our consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"), which simplifies the accounting for income taxes by removing certain exceptions and improves consistent application of Topic 740. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company does not anticipate any immediate impact on its consolidated financial statements upon adoption. In June 2016, the FASB issued an ASU that supersedes the existing impairment model for most financial assets to a current expected credit loss model. The new guidance requires an entity to recognize an impairment allowance equal to its current estimate of all contractual cash flows the entity does not expect to collect. The Company adopted this guidance effective January 1, 2020, with no material impact on its consolidated financial statements In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments. This guidance replaces the current incurred loss impairment methodology. Under the new guidance, on initial recognition and at each reporting period, an entity is required to recognize an allowance that reflects its current estimate of credit losses expected to be incurred over the life of the financial instrument based on historical experience, current conditions and reasonable and supportable forecasts. The guidance became effective on January 1, 2020, including interim periods within that year and requires a modified retrospective transition approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. Under the modified retrospective method of adoption, prior year reported results are not restated. The Company has performed its analysis of the impact on its financial instruments that are within the scope of this guidance and has concluded that there was no material impact to its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement" ("ASU No. 2018-13") as part of the FASB's broader disclosure framework project. ASU No. 2018-13 removes, modifies and adds certain disclosures, providing greater focus on requirements that clearly communicate the most important information to the users of the financial statements with respect to fair value measurements. The adoption of ASU No. 2018-13 as of January 1, 2020 did not have a material impact on the Company's consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this ASU simplify the accounting for income taxes, eliminates certain exceptions to the general principles in Topic 740 and clarifies certain aspects of the current guidance to improve consistent application among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021 and interim periods within annual periods beginning after December 15, 2022, though early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. This standard is not expected to have a material impact to the Company's consolidated financial statements after evaluation. In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging Contracts in Entity s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity s Own Equity. ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity's own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective for public companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently evaluating the impact that the adoption of ASU 2020-06 will have on the Company's consolidated financial statement presentation or disclosures. Other new pronouncements issued but not effective as of December 31, 2020 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. Depreciation expenses were $1 in the years ended December 31, 2020 and December 31, 2019. |
Other Accounts Liabilities
Other Accounts Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Other Accounts Liabilities [Abstract] | |
OTHER ACCOUNTS LIABILITIES | NOTE 4 – OTHER ACCOUNTS LIABILITIES December 31, December 31, Accrued expenses, interest and other liabilities $ 76 $ 201 Accrued salaries, bonuses and wages 2,119 540 Total $ 2,195 $ 741 |
Convertible Notes Payable
Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES PAYABLE | NOTE 5 – CONVERTIBLE NOTES PAYABLE On September 15, 2020, the Company issued a promissory note to Labrys Funds LP for $605 (the "Labrys Note"). The Labrys Note bears interest at a rate of 12% per annum and matures on September 14, 2021. The interest is paid monthly. Payment of principle starts after three months with ability to extend for up to two months and the loan principal become payable on maturity. The Labrys Note bears an original issue discount in the amount of $60, and the issuing expenses were $40, resulting with net proceeds of $505. The Company also issued 56,725 shares of its Common Stock pursuant to the Labrys Note. Out of those, 13,200 shares of Common Stock were issued in consideration of the commitment fee and the balance, are subject to return to the Company once the Labrys Note will be paid in full if there were no defaults. On November 12, 2020, the Company issued a convertible promissory note to a private investor in the amount of $250, which matures on November 12, 2021. Interest accrues from the date of the note on the unpaid principal amount at a rate equal to 10.00% per annum, calculated as simple interest. The holder may elect to convert all or any part of the then outstanding principal and accrued but unpaid interest due under the note into shares of Common Stock until maturation. The conversion price of the note is $6.875 per share, which may be proportionately adjusted as appropriate to reflect any stock dividend, stock split, reverse stock split or other similar event affecting the number of outstanding shares of Common Stock of the Company without the payment of consideration to the Company therefor at any time prior to conversion. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 6 – RELATED PARTY TRANSACTIONS The Company has had extensive dealings with related parties including those in which our Chief Executive Officer holds a significant ownership interest as well as an executive position during the years ended December 31, 2020 and 2019. Due to our operational losses, the Company has relied to a large extent on funding received from Next Communications, Inc., an organization in which our Chief Executive Officer and Chairman holds a controlling equity interest and holds an executive position. During the first calendar quarter of 2017, Next Communications, Inc. filed for bankruptcy protection. As a result, the related party payable is being handled by a court appointed trustee as an asset of Next Communications, Inc. and the Company may need to begin repaying the amounts due on a more fixed schedule On January 29, 2019, the United States Bankruptcy Court Southern District of Florida, Miami Division, approved a plan of reorganization for Next Communications, Inc. whereby the Company would pay $600,000 to a specific creditor in consideration for the forgiveness of the balance of the related party payable balance. On March 5, 2019, Cuentas paid $60,000 to the trust account of the specific creditor and on May 10, 2019, the Company paid $550,000 to the trust account of the specific creditor per the order and satisfied its obligation under the Approved Plan of the Reorganization for Next Communications, Inc., that was approved by the United States Bankruptcy Court Southern District of Florida, Miami Division, on January 29, 2019. On July 1, 2020 and pursuant to section 1 (e) of the Side Letter Agreement, dated December 31, 2019, it was agreed by and among Dinar Zuz, Cima, Arik Maimom and Michael De Prado that the Company will borrow up to $462 from Dinar Zuz LLC under the second Dinar Zuz Note. As of December 31, 2020, the Company borrowed $355 under the second Dinar Note. On August 25, 2020 and Pursuant to section 1 (e) of the Side Letter Agreement, dated December 31, 2019, it was agreed by and among Dinar, Cima, Arik Maimon and Michael De Prado that the Company will borrow up to $50 from Arik Maimon at an annual interest rate of 9%. On September 30, 2020, the Company fully repaid its loan to Arik Maimon. Related parties balances at December 31, 2020 and December 31, 2019 consisted of the following: Due from related parties December 31, December 31, (dollars in thousands) (b) Next Cala 360 54 54 Total Due from related parties 54 54 Related party payables, net of discounts December 31, December 31, (dollars in thousands) (a) Due to Next Communications, Inc. (current) $ 10 $ 10 (c) Principal and interest due to Dinar Zuz LLC due to Dinar Zuz LLC 355 - (d) Due to Cima Telecom Inc. 417 - Total Due from related parties $ 782 $ 10 (a) Next Cala 360, is a Florida corporation established and managed by the Company's Chief Executive Officer. (b) Next Communication, Inc. is a corporation in which the Company's Chief Executive Officer a controlling interest and serves as the Chief Executive Officer. See disclosure above regarding payments by the Company in connection with the bankruptcy of Next Communication, Inc. (c) Due to the April 6, 2020 Loan Agreement with the Company to borrow up to $462 at an annual interest rate of nine percent (9.0%) (the second "Dinar Zuz Note"). (d) Composed from annual fees in the amount of $300 for the maintenance and support services in accordance with the software maintenance agreement for the first calendar year from the Effective Date, reimbursement of legal fees in the amount of $65 and other software development services. During the twelve months period ended December 31, 2020, the Company recorded interest expense of $0 using an interest rate equal to that on the outstanding convertible notes payable as imputed interest on the related party payable due to Next Communications. During the twelve months period ended December 31, 2019, the Company recorded interest expense of $67 using an interest rate equal to that on the outstanding convertible notes payable as imputed interest on the related party payable due to Next Communications. The interest was immediately forgiven by the related party and recorded to additional paid in capital. Employment Agreements On December 27, 2019, the Compensation Committee of the Board of the Company approved the amendments to the employment agreements with each of Arik Maimon and Michael De Prado. The New Employment Agreements shall supersede the terms of the Pre-existing Employment Agreements. Pursuant to the terms of the New Employment Agreements, among other things: (1) Michael De Prado will receive the following compensation: (1) (a) a base salary of $265 per annum which will increase by a minimum $15 or 5% on the 12 month anniversary of his employment agreement; (b) Restricted Stock Units; (c) a minimum grant of 40,000 stock options per year, with the exercise price valued based on the Company's stock price at the date of exercise, pursuant to the terms and conditions of the Company's Stock Option Incentive Plan; (d) an $8,000 automobile expense allowance per year; (e) participation in the Company's employee benefits plan; (f) participation in the Company's Performance Bonus Plan, if and when in effect. (2) Arik Maimon will receive the following compensation: (a) a base salary of $295 per annum which will increase by a minimum $15or 5% on the 12 month anniversary of his employment agreement; (b) Restricted Stock Units; (c) a minimum grant of 40,000 stock options per year, with share price valued at the date of exercise, pursuant to the terms and conditions of the Company's Stock Option Incentive Plan; (d) a $10 automobile expense allowance per year; (e) participation in the Company's employee benefits plan; (f) participation in the Company's Performance Bonus Plan, if and when in effect. (3) Each of Mr. De Prado and Mr. Maimon will be employed for an initial term of five years which will automatically renew for successive one-year period unless either party terminates the New Employment Agreements with 90 days' prior notice. (4) Upon the successful up-listing of the Company's shares of common stock, par value $0.001 per share, to the Nasdaq Stock Market ("Nasdaq"), each executive would be entitled to receive a $250 bonus; (5) Mr. De Prado will be granted of 35,200 stock options and Mr. Maimon will be granted 44,000 stock options with the right to exercise the options to purchase the equivalent of a minimum of 4% and 5% of the Company's issued and outstanding shares of Common Stock as of July 1, 2019, respectively; (6) Pursuant to the terms of the New Employment Agreements, the Executives are entitled to severance in the event of certain terminations of his employment. The Executives are entitled to participate in the Company's employee benefit, pension and/or profit-sharing plans, and the Company will pay certain health and dental premiums on their behalf. (7) Each of the Executives are entitled to travel and expense reimbursement; (8) The Executives have agreed to a one-year non-competition agreement following the termination of their employment. On July 24, 2020, the Compensation Committee (the "Compensation Committee") of the Board of Directors of Cuentas Inc. (the "Company") approved the Amended and Restated employment agreements with each of Arik Maimon, the Company's Chief Executive Officer ("Maimon"), and Michael De Prado, the Company's President ("De Prado," and together with Maimon, the "Executives," each an "Executive"), the "New Employment Agreements". The New Employment Agreements shall supersede the terms of the Pre-existing Employment Agreements. Pursuant to the terms of the New Employment Agreements, among other things: (1) De Prado will receive the following compensation: (1) (a) a base salary of $265,000 per annum; (b) a Funding Bonus equal to 0.5% of the amount of the funding that exceeds the Funding Threshold; (c) a change of control bonus, if applicable; (d) participation in the Company's employee benefits plan; (2) Maimon will receive the following compensation: (a) a base salary of $295,000 per annum; (b) a Funding Bonus equal to 0.5% of the amount of the funding that exceeds the Funding Threshold; (c) a change of control bonus, if applicable; (d) participation in the Company's employee benefits plan; (3) For each Executive, the term of the Agreement shall end on the earlier of (i) the date that is four months following the Effective Date or (ii) the date that the Company appoints a new president or chief operating officer but the Company can extend the Employment Term on a month to month basis with the approval of both Dinar and CIMA until a new president or chief operating officer is appointed. Upon expiration of the Employment Term (other than a termination by the Company for "Cause"), the Executive will entitled to a special board compensation package with annual compensation equal to the Annual Base Salary (pro-rated for any partial year of service), beginning on the Expiration or Termination Date and ending 18 months later, provided that such payments will cease if the Executive resigns as a member of the Board during such period. The Board Compensation Period may be extended from year to year for an additional 12 months (for up to 36 months in total) if two of three of the then-current chief executive officer of the Company, Dinar and CIMA agree to extend the period for an additional 12 months. The Executive's right to receive the Special Board Compensation shall be subject to the Board's determination that he has complied with his obligations under this Agreement. The Executive will remain on the Board until he resigns, is not re-elected or is removed from the Board in accordance with the Company's practice for removal of directors. (4) Pursuant to the terms of the New Employment Agreements, the Executives are entitled to severance in the event of certain terminations of his employment. The Executives are entitled to participate in the Company's employee benefit, pension and/or profit-sharing plans, and the Company will pay certain health and dental premiums on their behalf. (5) Each of the Executives are entitled to travel and expense reimbursement; (6) The Executives have agreed to a one-year non-competition agreement following the termination of their employment. On November 28, 2018, the Company entered in to Employment agreement with Mr. Daniel. Pursuant to the terms of the Employment Agreement, among other things: (1) Mr. Daniel will receive a base salary of $162,500 per annum for initial five years term. The Agreement will be automatically renewed for successive one-year periods unless either party provides ninety days' prior notice of termination. Furthermore, during the term of his Employment Mr. Daniel's compensation shall no less than any other officer or employee of the Company or its subsidiary. (2) Mr. Daniel shall have the right, on the same basis as other senior executives of the Company, to participate in and to receive benefits under any of the Company's employee benefit plans, as such plans may be modified from time to time, and provided that in no event shall Mr. Daniel receive less than (4) four weeks paid vacation per annum and (6) six paid sick and (5) five paid personal days per annum. (3) Upon the successful up-listing of the Company's shares of Common Stock to Nasdaq, Mr. Daniel would be entitled to receive a $100,000 bonus. (4) Mr. Daniel have agreed to a one-year non-competition agreement following the termination of their employment. (5) If Mr. Daniel's employment with the Company terminates as a result of a Involuntary Termination, then, in addition to any other benefits described in this Agreement, Mr. Daniel shall receive all compensation bonuses and benefits earned the date of his termination of employment; In addition, Mr. Daniel will be entitled to a lump sum payment equivalent to the remaining Salary due Mr. Daniel to the end of the term of his Employment or six (6) months' Salary, whichever is the greater; Consulting Agreement On December 15, 2020, the Company entered into a consulting agreement with Juan Martin Gomez, who is currently the chief executive officer and a 25% shareholder of CIMA. Pursuant to the Consulting Agreement, Mr. Martin will have access to the Company's facilities once a week and provide consulting services to the Company, including support for marketing and corporate structuring, for a term of one year, which term may be extended upon satisfactory performance of his duties. In exchange for his consulting services, the Company will pay Mr. Martin a monthly fee of $5. |
Stock Options
Stock Options | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK OPTIONS | NOTE 7 – STOCK OPTIONS The following table summarizes all stock option activity for the year ended December 31, 2020: Shares Weighted- Outstanding, December 31, 2019 84,818 $ 31.97 Granted 79,200 14.35 Forfeited 28,818 81.12 Outstanding, December 31, 2020 135,200 $ 11.18 The following table discloses information regarding outstanding and exercisable options at December 31, 2020: Outstanding Exercisable Exercise Number of Weighted Average Weighted Average Number of Weighted Average $ 14.35 79,200 $ 14.35 4.24 79,200 $ 14.35 7.50 36,000 7.50 3.71 36,000 7.50 5.23 20,000 5.23 3.24 20,000 5.23 135,200 $ 11.18 3.68 135,200 $ 11.18 On March 30, 2020, the Company issued 79,200 options to its Chief Executive Officer and President of the Company. The options carry an exercise price of $14.35 per share. All the options were vested immediately. The Options are exercisable until March 30, 2022. The Company has estimated the fair value of such options at a value of $456 at the date of issuance using the Black-Scholes option pricing model using the following assumptions: Common stock price 6.35 Dividend yield 0 % Risk-free interest rate 1.89 % Expected term (years) 3 Expected volatility 328 % The following table summarizes all stock option activity for the year ended December 31, 2019: Shares Weighted- Outstanding, December 31, 2018 64,818 $ 40.23 Granted 20,000 5.23 Forfeited - - Outstanding, December 31, 2019 84,818 $ 31.98 The following table discloses information regarding outstanding and exercisable options at December 31, 2019: Outstanding Exercisable Exercise Number of Weighted Weighted Number of Weighted $ 135.00 10,000 $ 135.00 0.25 10,000 $ 135.00 52.50 18,818 52.50 1.49 18,818 52.50 7.50 36,000 7.50 4.71 24,000 7.50 5.23 20,000 5.23 4.24 20,000 5.23 84,818 $ 31.98 2.75 72,818 $ 36.00 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 8 – STOCKHOLDERS' EQUITY Series B Preferred Stock The Company had 10,000,000 shares of Preferred Stock designated as Series B issued and outstanding as of December 31, 2019. The holders of Series B Preferred Stock were entitled to 1,000 votes for each share of Series B Stock that is held when voting together with holders of the Common Stock. On August 21, 2020, in connection with a special meeting of shareholders of the Company, the Company filed with the Secretary of State of the State of Florida the Company's Amended and Restated Articles of Incorporation (the "Amended and Restated Articles") to, among other things, cause all outstanding shares of Series B Preferred Stock, par value $0.001 per share (the "Preferred Stock") to be converted into 4,000,000 shares of the Company's Common Stock. In connection with the conversion of these shares, the Company issued an additional 4,000,000 shares to each of CIMA and Dinar to cover certain anti-dilution rights. Common Stock Effective November 20, 2015, the Company amended its Articles of Incorporation to decrease the common shares authorized from 9,500,000,000 to 360,000,000 with a par value of $0.001. Common Stock Activity During the Year Ended December 31, 2020 The following summarizes the Common Stock activity for the year ended December 31, 2020: Summary of common stock activity for the year ended December 31, 2020 Outstanding shares Balance, December 31, 2019 1,855,656 Shares issued for Common Stock 32,000 Shares issued due to conversion of Convertible Promissory Note 503,115 Settlement of stock-based liabilities 26,534 Shares issued to a lender 56,725 Shares issued for services 36,000 Shares issued to employees 23,333 Shares issued due to conversion of 8,000,000 Series B preferred stock, $0.001 par value shares 8,000,000 Shares issued due to conversion of Warrants 57,128 Balance, December 31, 2020 10,590,491 On January 3, 2020, Dinar Zuz provided an additional amount of $300 to the Company which was be provided in a form of the Optima Convertible Note pursuant to a securities purchase agreement between the Company and Optima, dated July 30, 2019. Additionally, on January 3, 2020, the Company issued 40,000 shares of its Common Stock to Dinar Zuz LLC, as a result of a conversion of the Dinar Convertible Note in the amount of $300. On January 9, 2020, the Company issued 16,000 shares of its Common Stock pursuant to a service Agreement between the Company and a service provider, dated June 3, 2019. The fair market value of the shares at the issuance date was $240. On January 14, 2020, the Company issued 26,534 shares of its Common Stock pursuant to a settlement of stock-based liabilities. The fair market value of the shares was $459. On January 14, 2020, the Company issued 23,334 shares of Common Stock to employees. All shares were issued pursuant to the Company's Share and Options Incentive Enhancement Plan (2016). The Company has estimated the fair value of such shares at $332. On February 10, 2019, the Company issued 4,000 shares of its Common Stock pursuant to a securities purchase agreement between the Company and a private investor, dated October 25, 2018. On March 3, 2020, Dinar Zuz provided an additional amount of $450 to the Company which was be provided in a form of the Dinar Zuz Convertible Note pursuant to a securities purchase agreement between the Company and Dinar Zuz, dated July 30, 2019. The Company issued 462,991 shares of its Common Stock to Dinar Zuz LLC, as a result of a conversion of the Dinar Convertible Note in the amount of $700. On April 2, 2020, the Company issued 28,000 shares of its Common Stock pursuant to a securities purchase agreement between the Company and a private investor, dated October 25, 2018. On May 22, 2020, the Company issued 17,128 shares of its Common Stock pursuant to a cashless conversion of warrants to purchase up to 29,232 shares of its Common Stock at an exercise price equal to $8.125 per share. On August 20, 2020, the Company issued 20,000 shares of its Common Stock pursuant to a settlement of stock-based liabilities. The fair market value of the shares was $180. On August 27, 2020, the Company converted all the outstanding shares of Series B Preferred Stock, par value $0.001 per share to 4,000,000 shares of the Company's common stock, par value $0.001 per share. On September 17, 2020, the Company issued 2,000,000 of its Common Stock par value $0.001 per share to each of Dinar Zuz and Cima Telecom Inc., under a warrant dated December 31, 2019. On September 17, 2020, the Company issued 56,725 shares of its Common Stock pursuant to promissory note, dated September 15, 2020. The fair market value of the shares at the issuance date was $390. Out of those, 13,200 shares of Common Stock were issued in consideration of the commitment fee and the balance are subject to return to the Company once the promissory note will be paid in full. On September 30, 2020, the Company issued 40,000 of its Common Stock par value $0.001 per share to a private investor in consecration of cancellation of warrants to purchase up to 39,734 shares of its Common Stock at an exercise price equal to $8.125 per share. On November 12, 2020, the Company issued a convertible promissory note to a private investor in the amount of $250, which matures on November 12, 2021. Interest accrues from the date of the note on the unpaid principal amount at a rate equal to 10.00% per annum, calculated as simple interest. The holder may elect to convert all or any part of the then outstanding principal and accrued but unpaid interest due under the note into shares of Common Stock until maturation. The conversion price of the note is $6.87 per share, which may be proportionately adjusted as appropriate to reflect any stock dividend, stock split, reverse stock split or other similar event affecting the number of outstanding shares of Common Stock of the Company without the payment of consideration to the Company therefor at any time prior to conversion. The Company issued such convertible promissory note in reliance on the exemptions from registration pursuant to Section 4(a)(2) of the Securities Act. On November 20, 2020, the Company entered into an advisory agreement with an advisor, pursuant to which the advisor will provide certain management consulting services and in consideration the Company will issue to the advisor a five-year warrant to acquire up to 40,000 shares of common stock of the Company, exercisable at any time at $8.25 per share, on a cash or cashless basis. The Company issued such Warrants in reliance on the exemptions from registration pursuant to Section 4(a)(2) of the Securities Act. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 9 – COMMITMENTS AND CONTINGENCIES From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. On December 20, 2017, a complaint was filed by J. P. Carey Enterprises, Inc. ("JP Carey") alleging a claim for $473,000 related to Franjose Yglesias-Bertheau, a former Vice President of PLKD. Even though the Company made the agreed payment of $10,000 on January 2, 2017, and issued 6,001 shares of Common Stock as conversion of the $70,000 note as agreed in its settlement agreement, JP Carey alleges damages that the Company claims are without merit because JP Carey received full compensation as agreed. The Company is in the process of defending itself against these claims. The Company has not accrued losses related to this claim due to the early stages of litigation. On January 29, 2019, the Company was served with another complaint by JP Carey claiming similar issues as to the previous complaint, with the new claimed damages totaling $1,108,037.85. JP Carey and the Company filed motions for a summary judgment. On June 23, 2020, the case was transferred to the Business Court at the request of the Superior Court Judge previously assigned to the case. Judge Ellerbe from the Business Court has been assigned as the new judge. On October 1, 2020, the court granted the Company's motion for summary judgment and denied JP Carey's motion for summary judgment. On October 30, 2020, JP Carey filed a notice of appeal to the trial court's October 1 and 7, 2020 orders granting summary judgment in favor of Cuentas. The current briefing schedule calls for briefing in the appeal to be completed during the first quarter of 2021. Oral argument may be held, but no date for it has been set yet. On November 16, 2020, Cuentas filed a motion seeking payment from JP Carey of $140,970.82 in attorney fees and costs accrued as of November 13, 2020. JP Carey's response brief was due on December 21, 2020 and thereafter Cuentas may reply. The trial court has not yet set a date to hear this motion. On October 23, 2018, the Company was served by Telco Cuba Inc. for an amount in excess of $15,000 but the total amount was not specified. The Company was served on December 7, 2018, with a complaint alleging damages including unspecified damages for product, advertising and other damages in addition to $50,000 paid to the Defendants. The Company retained an attorney and has taken steps to defend itself vigorously in this case. Depositions are in process of being scheduled. On October 25, 2018, the Company was served with a complaint by former company Chief Financial Officer, Michael Naparstek, claiming breach of contract for 833,333 shares (pre-2018 reverse stock split), $25,554 of compensation and $8,823 of expenses. This case was withdrawn in Palm Beach County and on January 11, 2019, a similar complaint was filed in Miami-Dade County. During the recent mediation, the Parties reached an understanding of full settlement amount of $2,500. The Company has deposited the settlement amount to an escrow account of its counsel until a stipulation of settlement will be executed by both parties. On November 7, 2018, the Company and its now former subsidiary, Limecom, were served with a complaint by IDT Domestic Telecom, Inc. for telecommunications services provided to Limecom during 2018 in the amount of $50,000. The Company has no accrual expenses as of December 31, 2019, related to the complaint given the early nature of the process. Limecom was a subsidiary of the Company during this period but since the Limecom Acquisition was rescinded on January 30, 2019, and Limecom agreed to indemnify and hold harmless the Company from this and other debts. The Company retained an attorney and is defending itself vigorously in this case. A court ordered mandatory arbitration session took place and the arbitration findings were issued on June 19, 2020, and a request for trial de novo was filed on July 16, 2020, in order to have the matter docketed on the calendar. The court came to the determination that while not indicative of success at trial, the court denied Plaintiff's motion for summary judgment. As of this time, there is a current trial date set for March 15, 2021 On May 1, 2019, the Company received a notice of demand for arbitration from Secure IP Telecom, Inc. ("Secure IP), who allegedly had a Reciprocal Carrier Services Agreement ("RCS") exclusively with Limecom and not with Cuentas. The arbitration demand originated from another demand for arbitration that Secure IP received from VoIP Capital International ("VoIP") in March 2019, demanding $1,052,838.09 in damages allegedly caused by unpaid receivables that Limecom assigned to VoIP based on the RCS. On June 5, 2020, SecureIP filed a complaint against Limecom, Heritage Ventures Limited ("Heritage"), an unrelated third party and owner of Limecom, and the Company. The complaint primarily concerns alleged indebtedness owed SecureIP by Limecom. SecureIP also alleges that Cuentas received certain transfers of funds which it alleges may be an avoidable transfer under Florida Statute §725.105 up to $1,052,838.09. Cuentas is contemplating filing a motion to dismiss the complaint and disputes that it received the alleged $1,052,838.09 from Limecom. Moreover, to the extent Cuentas has exposure for any transfers from Limecom, both Limecom and Heritage have indemnified Cuentas for any such liability. The Company will vigorously defend its position to be removed as a named party in this action due to the fact that Cuentas rescinded the Limecom Acquisition on January 30, 2019. The Company executed a lease for office space effective November 1, 2019. The lease requires monthly rental payments of $6. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 10 – INCOME TAXES Effective December 22, 2017 a new tax bill was signed into law that reduced the federal income tax rate for corporations from 35% to 21%. The new bill reduced the blended tax rate for the Company from 39.50% to 26.50%. Under FASB ASC Topic 740, the effects of new tax legislation are recognized in the period which includes the enactment date. As a result, the deferred tax assets and liabilities existing on the enactment date must be revalued to reflect the rate at which these deferred balances will reverse. The corresponding adjustment would generally affect the Income Tax Expense (Benefit) shown on the financial statements. However, since the company has a full valuation allowance applied against all of its deferred tax asset, there is no impact to the Income Tax Expense for the year ending December 31, 2020. Internal Revenue Code Section 382 ("IRC 382") potentially limits the utilization of NOLs and tax credits when there is a greater than 50% change of ownership. The Company has not performed an analysis under IRC 382 related to changes in ownership, which could place certain limits on the company's ability to fully utilize its NOLs and tax credits. The Company's has added a note to its financial statements to disclose that there may be some limitations and that an analysis has not been performed. In the interim, the Company has placed a full valuation allowance on its NOLs and other deferred tax items. We recognized income tax benefits of $0 during the years ended December 31, 2020 and December 31, 2019. When it is more likely than not that a tax asset will not be realized through future income, the Company must allow for this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carry forward period. The Company has not taken a tax position that, if challenged, would have a material effect on the financial statements for the years ended December 31, 2020 or December 31, 2019 applicable under FASB ASC Topic 740. We did not recognize any adjustment to the liability for uncertain tax position and therefore did not record any adjustment to the beginning balance of accumulated deficit on the balance sheet. All tax returns for the Company remain open. Reconciliation between the theoretical tax expense, assuming all income is taxed at the statutory tax rate applicable to income of the Company and the actual tax expense as reported in the Statement of Operations, is as follows: Year ended 2020 2019 Loss before taxes, as reported in the consolidated statements of operations $ 7,483 $ 1,286 Federal and State statutory rate 26.5 % 26.5 % Theoretical tax benefit on the above amount at federal statutory tax rate 1,982 341 Losses and other items for which a valuation allowance was provided or benefit from loss carry forward (1,982 ) (341 ) Actual tax income (expense) - - 2020 2019 U.S. dollars in thousands Deferred tax assets: Net operating loss carry-forward $ 3,185 $ 1,830 Adjustments (315 ) (163 ) Valuation allowance (2,870 ) (1,667 ) $ - $ - A valuation allowance is provided when it is more likely than not that some portion of the deferred tax asset will not be realized. Management has determined, based on its recurring net losses, lack of a commercially viable product and limitations under current tax rules, that a full valuation allowance is appropriate. U.S. dollars in thousands Valuation allowance, December 31, 2019 $ 1,667 Increase 1,203 Valuation allowance, December 31, 2020 $ 2,870 The net federal operating loss carry forward will begin expire in 2039. This carry forward may be limited upon the consummation of a business combination under IRC Section 382. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 11 – SUBSEQUENT EVENTS On January 28, 2021, the Company issued 20,000 shares of its Common Stock to its Chief Financial Officer, 40,000 shares of its Common Stock to a member of the Board of Directors of the Company and 2,933 shares of its Common Stock to a former employee. The fair market value of the shares was $459. On January 28, 2021, the Company filed Articles of Amendment to the Articles of Incorporation of the Company with the Secretary of State of Florida, pursuant to which, effective as of February 2, 2021, the Company effected a 1-for-2.5 reverse split of its authorized and issued and outstanding shares of Common Stock. On February 2, 2021 the Company's common stock and warrants began trading on The Nasdaq Capital Market under the symbols "CUEN" and "CUENW," respectively. On February 4, 2020 the Company sold an aggregate of 2,790,697 units at a price to the public of $4.30 per unit (the "Offering"), each unit consisting of one share of the Company's common stock, par value $0.001 per share (the "Common Stock"), and a warrant exercisable for five years to purchase one share of Common Stock at an exercise price of $4.30 per share (the "Warrants"), pursuant to that certain Underwriting Agreement, dated as of February 1, 2021 (the "Underwriting Agreement"), between the Company and Maxim Group LLC (the "Representative" or "Maxim"), as representative of the sole underwriter. In addition, pursuant to the Underwriting Agreement, the Company granted Maxim a 45-day option to purchase up to 418,604 additional shares of Common Stock, and/or 418,604 additional Warrants, to cover over-allotments in connection with the Offering. The Common Stock and the Warrants were offered and sold to the public pursuant to the Company's registration statements on Form S-1 (File Nos. 333-249690 and 333-252642), filed by the Company with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Securities Act"), on October 28, 2020, as amended, and which became effective on February 1, 2021. The Company received gross proceeds of approximately $12.0 million, before deducting underwriting discounts and commissions of 8% of the gross proceeds and estimated Offering expenses, and intend to use the net proceeds from the Offering for sales and marketing; purchase of chip-based debit card stock for GPR and Starter cards; repayment of outstanding loans; research and development; and working capital and operating expenses purposes. The Underwriting Agreement contains customary representations, warranties, and covenants by the Company. It also provides for customary indemnification by each of the Company and the Underwriter for losses or damages arising out of or in connection with the offering, including for liabilities under the Securities Act, other obligations of the parties and termination provisions. In addition, pursuant to the terms of the Underwriting Agreement, certain existing stockholders and each of the Company's directors and executive officers entered into "lock-up" agreements with the Underwriter that generally prohibit the sale, transfer, or other disposition of securities of the Company for a period of 180 days following February 1, 2021. The Company has also agreed that it will not issue or announce the issuance or proposed issuance of any common stock or common stock equivalents for a period of 180 days following the closing date, other than certain exempt issuances. Pursuant to the Underwriting Agreement, the Company also agreed to issue to Maxim warrants (the "Underwriter's Warrants") to purchase up to a total of 223,256 shares of Common Stock (8% of the shares of Common Stock sold in the Offering). The Underwriter's Warrants are exercisable at $5.375 per share of Common Stock and have a term of five years. The Underwriter's Warrants are subject to a lock-up for 180 days from the commencement of sales in the Offering, including a mandatory lock-up period in accordance with FINRA Rule 5110(e), and will be non-exercisable for six months after February 1, 2021. In addition, pursuant to the Underwriting Agreement, the Company granted Maxim a right of first refusal, for a period of twelve months from the commencement of sales in the Offering, to act as sole managing underwriter and bookrunner any and all future public or private equity, equity-linked or debt (excluding commercial bank debt) offerings. The total expenses of the offering are estimated to be approximately $1.4 million, which included Maxim's expenses relating to the offering. On February 4, 2021, the Company also entered into a Warrant Agency Agreement with Olde Monmouth Stock Transfer Co., Inc. (" Warrant Agency Agreement On February 24, 2021, the employment agreement dated July 24, 2020 for Arik Maimon expired in accordance with its terms and as previously disclosed by the Company. As a result of the expiration of the employment agreement, Mr. Maimon was no longer employed as the Chief Executive Officer of the Company, but he continued to act as Chairman of the Board of Directors of the Company. On February 25, 2021, the Board appointed Mr. Maimon to act as interim Chief Executive Officer, which position will terminate upon the earlier of August 25, 2021 or the date on which his successor is duly elected and appointed by the Board of the Company. On February 24, 2021, the employment agreement dated July 24, 2020 for Michael De Prado expired in accordance with its terms and as previously disclosed by the Company. As a result of the expiration of the employment agreement, Mr. De Prado is no longer the President of the Company but has become the Vice Chairman of the Board. On February 12 2021 the Company prepaid its loan to Labrys and Labrys returned the Second Commitment shares to the Company. On March 4, 2021 and pursuant to the Underwriting Agreement, Maxim exercised its 45-day option to purchase up to 418,604 additional Warrants, to cover over-allotments in connection with the Offering. On March 5,2020 Furthermore, and pursuant to the Side Letter Agreement, the Board of Directors of the Company approved a special bonus in the amount of $500 to each of Mr. Maimon and Mr. De Prado due to the successful up-listing of the Company's shares on the Nasdaq Capital Markets. The bonus will be paid half in cash and half in Common shares of the Company On March 5, 2021 the Company prepaid its loan to Dinar Zuz. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States ("'US GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. As applicable to the consolidated financial statements, the most significant estimates and assumptions relate to allowances for impairment of intangible assets and fair value of stock-based compensation and fair value calculations related to embedded derivative features of outstanding convertible notes payable. |
Principles of consolidation | Principles of consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. |
Functional currency | Functional currency The functional currency of the company and its subsidiaries is U.S dollar. |
Reclassification of Prior Year Presentation | Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all short-term investments, which are highly liquid investments with original maturities of three months or less at the date of purchase, to be cash equivalents. The Company held no cash equivalents as of December 31, 2020 or 2019. As of December 31, 2020, and 2019, the Company did not hold cash with any one financial institution in excess of the FDIC insured limit of $250. |
Marketable securities | Marketable securities The Company accounts for investments in marketable securities in accordance with ASC Topic 320-10, "Investments - Debt and Equity Securities" |
Allowance for doubtful accounts | Allowance for doubtful accounts The allowance for doubtful accounts is determined with respect to amounts the Company has determined to be doubtful of collection. In determining the allowance for doubtful accounts, the Company considers, among other things, its past experience with customers, the length of time that the balance is post due, the customer's current ability to pay and available information about the credit risk on such customers. There was an allowance for doubtful accounts of $20 as of December 31, 2020 and 2019. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. The Company provides for depreciation and amortization using the straight-line method over the estimated useful lives of the related assets, which range from three to five years. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets In accordance with ASC Topic 360, formerly SFAS No. 144, " Accounting for the Impairment or Disposal of Long-Lived Assets |
Derivative Liabilities and Fair Value of Financial Instruments | Derivative Liabilities and Fair Value of Financial Instruments Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC Topic 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC Topic 815. Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. Fair value of certain of the Company's financial instruments including cash, accounts receivable, account payable, accrued expenses, notes payables, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC Topic 820, "Fair Value Measurements and Disclosure" Fair value, as defined in ASC Topic 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company's credit risk. Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC Topic 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC Topic 820 also provides fair value hierarchy for inputs and resulting measurement as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values. Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), (ii) segregating those gains or losses included in earnings and (iii) a description of where those gains or losses included in earning are reported in the statement of income. The Company records a debt discount related to the issuance of convertible debts that have conversion features at adjustable rates. The debt discount for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the fair value of the conversion features. The debt discount will be accreted by recording additional non-cash gains and losses related to the change in fair values of derivative liabilities over the life of the convertible notes. A summary of the changes in derivative liabilities balance for the year ended December 31, 2020 is as follows: Fair Value of Embedded Derivative Liabilities: Balance, December 31, 2018 $ 33 Change in fair value (30 ) Balance, December 31, 2019 3 Change in fair value (3 ) Balance, December 31, 2020 $ - The value of the embedded derivative liabilities for the convertible notes payable and outstanding option awards was determined using the Black-Scholes option pricing model based on the following assumptions: December 31, Common stock price 5.7 Expected volatility 220 % Expected term 0.25 years Risk free rate 1.55 % Forfeiture rate 0 % Expected dividend yield 0 % The Company's financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy are as follows: Balance as of December 31, 2020 Level 1 Level 2 Level 3 Total Assets: Marketable securities 3 - - 3 Total assets 3 - - 3 Liabilities: Stock based liabilities 102 - - 102 Total liabilities 102 - - 102 Balance as of December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Marketable securities 1 - - 1 Total assets 1 - - 1 Liabilities: Stock based liabilities 742 - - 742 Short term derivative value 3 - - 3 Total liabilities 745 - - 745 |
Deferred Revenue | Deferred Revenue The Company records deferred revenue for any upfront payments received in advance of the Company's performance obligations being satisfied. These contract liabilities consist principally of unearned new minutes fees. Changes in the deferred revenue balance are driven primarily by the amount of new minutes fees recognized during the period, and the degree to which these reductions to the deferred revenue balance are offset by the deferral of new minutes fees associated with minutes sold during the period. |
Non-Controlling Interest | Non-Controlling Interest The Company reports the non-controlling interest in its majority owned subsidiaries in the consolidated balance sheets within the stockholders' deficit section, separately from the Company's stockholders' deficit. Non-controlling interest represents the non-controlling interest holders' proportionate share of the equity of the Company's majority-owned subsidiaries. Non-controlling interest is adjusted for the non-controlling interest holders' proportionate share of the earnings or losses and other comprehensive income (loss) and the non-controlling interest continues to be attributed its share of losses even if that attribution results in a deficit non-controlling interest balance. |
Revenue Recognition | Revenue Recognition The Company follows paragraph 605-10-S99 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable and (iv) collectability is reasonably assured. The Company primarily generates revenues through the brokering of sales of minutes from one telecommunications carrier to another and to a lesser extent the sales of prepaid calling minutes to consumers through its Tel3 division. While the Company collects payment for such minutes in advance, revenue is recognized upon delivery to and consumption of minutes by the consumer. Minutes are forfeited buy the consumer after twelve consecutive months of non-use at which point the Company recognizes revenue from the forfeiture of prepaid minutes. |
Business Segments | Business Segments The Company operates in a two business segment in telecommunications and General Purpose Reloadable Cards. |
Income Taxes | Income Taxes Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Use of net operating loss carry forwards for income tax purposes may be limited by Internal Revenue Code Section 382 if a change of ownership occurs. |
Net Loss Per Basic and Diluted Common Share | Net Loss Per Basic and Diluted Common Share Basic loss per share is calculated by dividing the Company's net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company's net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted average number of shares adjusted for any potentially dilutive debt or equity. At December 31, 2020, potentially dilutive securities consisted of 226,356 shares which of 135,200 options to purchase of common stock at prices ranging from $5.22 to $14.35 per share and 54,762 warrants to purchase of common stock at prices ranging from $8.12 to $20.00 per share. Additionally, the Company had a Convertible note totaling $250,000 representing an additional 36,394 common shares. The effects of these options, warrants and note been excluded as the conversion would be anti-dilutive due to the net loss incurred in the year ended December 31, 2020. At December 31, 2019, potentially dilutive securities consisted of 105,700 shares which the Company is obligated to issue and 84,818 options to purchase of common stock at prices ranging from $5.23 to $135 per share. Of these potentially dilutive securities, only 105,700 shares which the Company is obligated to issue and 56,000 options to purchase of common stock at price of $6.69 per share are included in the computation of diluted earnings per share. Additionally, the Company had a Convertible note totaling $250,000 representing an additional 33,334 common shares included in the computation of diluted earnings per share because the effect of including the remaining instruments would be anti-dilutive. The effects of these notes, common shares subscribed and common shares committed have been excluded as the conversion would be anti-dilutive due to the net loss incurred in the year ended December 31, 2019. |
Advertising Costs | Advertising Costs The Company's policy regarding advertising is to expense advertising when incurred. The Company incurred $88 and $25 of advertising costs during the years ended December 31, 2020 and 2019, respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company applies ASC Topic 718-10, "Share-Based Payment," which requires the measurement and recognition of compensation expenses for all share-based payment awards made to employees and directors (including employee stock options under the Company's stock plans) based on estimated fair values. ASC Topic 718-10 requires companies to estimate the fair value of equity-based payment awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's statement of operations. The Company recognizes compensation expenses for the value of non-employee awards based on the straight-line method over the requisite service period of each award, net of estimated forfeitures. The Company estimates the fair value of stock options granted as equity awards using a Black-Scholes options pricing model. The option-pricing model requires a number of assumptions, of which the most significant are share price, expected volatility and the expected option term (the time from the grant date until the options are exercised or expire). Expected volatility is estimated based on volatility of similar companies in the technology sector. The Company has historically not paid dividends and has no foreseeable plans to issue dividends. The risk-free interest rate is based on the yield from governmental zero-coupon bonds with an equivalent term. The expected option term is calculated for options granted to employees and directors using the "simplified" method. Grants to non-employees are based on the contractual term. Changes in the determination of each of the inputs can affect the fair value of the options granted and the results of operations of the Company. |
Related Parties | Related Parties The registrant follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 of the FASB Accounting Standards Codification, the Related parties include (a) affiliates of the registrant; (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the registrant; (e) management of the registrant; (f) other parties with which the registrant may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards On August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40) ("ASU 2020-06"), which simplifies an issuer's accounting for convertible instruments and its application of the derivatives scope exception for contracts in its own equity. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company is currently evaluating the provisions of ASU 2020-06, but do not expect any material impact on our consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"), which simplifies the accounting for income taxes by removing certain exceptions and improves consistent application of Topic 740. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company does not anticipate any immediate impact on its consolidated financial statements upon adoption. In June 2016, the FASB issued an ASU that supersedes the existing impairment model for most financial assets to a current expected credit loss model. The new guidance requires an entity to recognize an impairment allowance equal to its current estimate of all contractual cash flows the entity does not expect to collect. The Company adopted this guidance effective January 1, 2020, with no material impact on its consolidated financial statements In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments. This guidance replaces the current incurred loss impairment methodology. Under the new guidance, on initial recognition and at each reporting period, an entity is required to recognize an allowance that reflects its current estimate of credit losses expected to be incurred over the life of the financial instrument based on historical experience, current conditions and reasonable and supportable forecasts. The guidance became effective on January 1, 2020, including interim periods within that year and requires a modified retrospective transition approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. Under the modified retrospective method of adoption, prior year reported results are not restated. The Company has performed its analysis of the impact on its financial instruments that are within the scope of this guidance and has concluded that there was no material impact to its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement" ("ASU No. 2018-13") as part of the FASB's broader disclosure framework project. ASU No. 2018-13 removes, modifies and adds certain disclosures, providing greater focus on requirements that clearly communicate the most important information to the users of the financial statements with respect to fair value measurements. The adoption of ASU No. 2018-13 as of January 1, 2020 did not have a material impact on the Company's consolidated financial statements. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this ASU simplify the accounting for income taxes, eliminates certain exceptions to the general principles in Topic 740 and clarifies certain aspects of the current guidance to improve consistent application among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021 and interim periods within annual periods beginning after December 15, 2022, though early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. This standard is not expected to have a material impact to the Company's consolidated financial statements after evaluation. In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging Contracts in Entity s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity s Own Equity. ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity's own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective for public companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently evaluating the impact that the adoption of ASU 2020-06 will have on the Company's consolidated financial statement presentation or disclosures. Other new pronouncements issued but not effective as of December 31, 2020 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. Depreciation expenses were $1 in the years ended December 31, 2020 and December 31, 2019. |
Organization and Description _2
Organization and Description of Business (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of intangible assets | Asset Amount Life Intangible Assets $ 9,000 60 Total $ 9,000 60 |
Schedule of amortization of intangible assets | Year ended December 31, 2021 $ 1,800 2022 1,800 2023 1,800 2024 1,800 Total $ 7,200 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Basis of Presentation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of changes in derivative liabilities balance | Fair Value of Embedded Derivative Liabilities: Balance, December 31, 2018 $ 33 Change in fair value (30 ) Balance, December 31, 2019 3 Change in fair value (3 ) Balance, December 31, 2020 $ - |
Schedule of Black-Scholes option pricing model | December 31, Common stock price 5.7 Expected volatility 220 % Expected term 0.25 years Risk free rate 1.55 % Forfeiture rate 0 % Expected dividend yield 0 % |
Schedule of financial assets and liabilities that are measured at fair value on a recurring basis | Balance as of December 31, 2020 Level 1 Level 2 Level 3 Total Assets: Marketable securities 3 - - 3 Total assets 3 - - 3 Liabilities: Stock based liabilities 102 - - 102 Total liabilities 102 - - 102 Balance as of December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Marketable securities 1 - - 1 Total assets 1 - - 1 Liabilities: Stock based liabilities 742 - - 742 Short term derivative value 3 - - 3 Total liabilities 745 - - 745 |
Other Accounts Liabilities (Tab
Other Accounts Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Accounts Liabilities [Abstract] | |
Schedule of other accounts liabilities | December 31, December 31, Accrued expenses, interest and other liabilities $ 76 $ 201 Accrued salaries, bonuses and wages 2,119 540 Total $ 2,195 $ 741 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of related party balances | December 31, December 31, (dollars in thousands) (b) Next Cala 360 54 54 Total Due from related parties 54 54 December 31, December 31, (dollars in thousands) (a) Due to Next Communications, Inc. (current) $ 10 $ 10 (c) Principal and interest due to Dinar Zuz LLC due to Dinar Zuz LLC 355 - (d) Due to Cima Telecom Inc. 417 - Total Due from related parties $ 782 $ 10 (a) Next Cala 360, is a Florida corporation established and managed by the Company's Chief Executive Officer. (b) Next Communication, Inc. is a corporation in which the Company's Chief Executive Officer a controlling interest and serves as the Chief Executive Officer. See disclosure above regarding payments by the Company in connection with the bankruptcy of Next Communication, Inc. (c) Due to the April 6, 2020 Loan Agreement with the Company to borrow up to $462 at an annual interest rate of nine percent (9.0%) (the second "Dinar Zuz Note"). (d) Composed from annual fees in the amount of $300 for the maintenance and support services in accordance with the software maintenance agreement for the first calendar year from the Effective Date, reimbursement of legal fees in the amount of $65 and other software development services. |
Stock Options (Tables)
Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock option activity | Shares Weighted- Outstanding, December 31, 2019 84,818 $ 31.97 Granted 79,200 14.35 Forfeited 28,818 81.12 Outstanding, December 31, 2020 135,200 $ 11.18 Shares Weighted- Outstanding, December 31, 2018 64,818 $ 40.23 Granted 20,000 5.23 Forfeited - - Outstanding, December 31, 2019 84,818 $ 31.98 |
Schedule of information regarding outstanding and exercisable options | Outstanding Exercisable Exercise Number of Weighted Average Weighted Average Number of Weighted Average $ 14.35 79,200 $ 14.35 4.24 79,200 $ 14.35 7.50 36,000 7.50 3.71 36,000 7.50 5.23 20,000 5.23 3.24 20,000 5.23 135,200 $ 11.18 3.68 135,200 $ 11.18 Outstanding Exercisable Exercise Number of Weighted Weighted Number of Weighted $ 135.00 10,000 $ 135.00 0.25 10,000 $ 135.00 52.50 18,818 52.50 1.49 18,818 52.50 7.50 36,000 7.50 4.71 24,000 7.50 5.23 20,000 5.23 4.24 20,000 5.23 84,818 $ 31.98 2.75 72,818 $ 36.00 |
Schedule of estimated fair value options | Common stock price 6.35 Dividend yield 0 % Risk-free interest rate 1.89 % Expected term (years) 3 Expected volatility 328 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of common stock activity | Summary of common stock activity for the year ended December 31, 2020 Outstanding shares Balance, December 31, 2019 1,855,656 Shares issued for Common Stock 32,000 Shares issued due to conversion of Convertible Promissory Note 503,115 Settlement of stock-based liabilities 26,534 Shares issued to a lender 56,725 Shares issued for services 36,000 Shares issued to employees 23,333 Shares issued due to conversion of 8,000,000 Series B preferred stock, $0.001 par value shares 8,000,000 Shares issued due to conversion of Warrants 57,128 Balance, December 31, 2020 10,590,491 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of actual tax expense | Year ended 2020 2019 Loss before taxes, as reported in the consolidated statements of operations $ 7,483 $ 1,286 Federal and State statutory rate 26.5 % 26.5 % Theoretical tax benefit on the above amount at federal statutory tax rate 1,982 341 Losses and other items for which a valuation allowance was provided or benefit from loss carry forward (1,982 ) (341 ) Actual tax income (expense) - - |
Schedule of deferred tax assets | 2020 2019 U.S. dollars in thousands Deferred tax assets: Net operating loss carry-forward $ 3,185 $ 1,830 Adjustments (315 ) (163 ) Valuation allowance (2,870 ) (1,667 ) $ - $ - |
Schedule of valuation allowance | U.S. dollars in thousands Valuation allowance, December 31, 2019 $ 1,667 Increase 1,203 Valuation allowance, December 31, 2020 $ 2,870 |
Organization and Description _3
Organization and Description of Business (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Intangible Assets | $ 9,000 |
Total, Amount | $ 9,000 |
Total, Life (months) | 60 months |
Intangible Assets [Member] | |
Total, Life (months) | 60 months |
Organization and Description _4
Organization and Description of Business (Details 1) $ in Thousands | Dec. 31, 2020USD ($) |
Year ended December 31, | |
2021 | $ 1,800 |
2022 | 1,800 |
2023 | 1,800 |
2024 | 1,800 |
Total | $ 7,200 |
Organization and Description _5
Organization and Description of Business (Details Textual) - USD ($) $ in Thousands | Dec. 06, 2017 | Sep. 21, 2005 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 23, 2017 | May 31, 2016 |
Organization and Description of Business (Textual) | |||||||
Business acquisition, description | Fisk Holdings will contribute 30,000 active point of sale locations for distribution of retail telecommunications and prepaid financial products and services to include, but not be limited to: prepaid GPR cards, prepaid gift cards, prepaid money transfer, prepaid utility payments, and other prepaid products. The completed formation of an established distribution business for third-party gift cards, digital content, mobile top up, financial services and digital content, which presently includes more than 31,600 U.S. active Point of Sale locations, including store locations, convenience stores, bodegas, store fronts, etc. The parties agreed that additional product lines may be added with unanimous decision by the Managing Members of SDI Next. During 2018, it was agreed between the parties to distribute the Company's recently announced CUENTAS GPR card and mobile banking solution aimed to the unbanked, underbanked and financially underserved consumers, making them available to customers at the more than 31,600 retail locations SDI Next presently serves. SDI Next was dissolved on August 22, 2020. | ||||||
License agreement, description | Under the License Agreement Cima received a one-time licensing fee in the amount of $9,000 in the form of a convertible note that may be converted, at the option of Cima, into up to 25% of the total shares of Common Stock of the Company, par value $0.001 per share (the "Common Stock") on a fully diluted basis as of December 31, 2019. On December 31, 2019, CIMA exercised its option to convert the Convertible Promissory Note into 702,992 shares of Common Stock of the Company. Upon the conversion of the Series B Preferred shares into common stock, CIMA received an additional five million shares pursuant to their anti-dilution warrant agreement. | (i) for the first (1st) calendar year from the Effective Date, $300 were paid in 2020; (ii) for the second (2nd) calendar year from the Effective Date, $500 to be paid on December 31, 2020; (iii) for the third (3rd) calendar year from the Effective Date, $700 to be paid on December 31, 2021; (iv) for the fourth (4th) calendar year from the Effective Date, $1,000 to be paid on December 31, 2022; (v) for the fifth (5th) calendar year from the Effective Date, $640 to be paid on December 31, 2022; and (vi) for each calendar year thereafter, $640 to be paid on the anniversary date (see Further explanation in Note 2). | |||||
Reverse stock split, description | (i) every two and a half shares of common stock have been combined into one share of common stock; (ii) the number of shares of common stock underlying each common stock option or common stock warrant have been proportionately decreased on a 2.5-for-1 basis, and the exercise price of each such outstanding stock option and common warrant has been proportionately increased on a 2.5-for-1 basis. Accordingly, all option numbers, share numbers, warrant numbers, share prices, warrant prices, exercise prices and losses per share have been adjusted within these consolidated financial statements, on a retroactive basis, to reflect this 2.5-for-1 reverse stock split. | ||||||
Amortization expense | $ 1,800 | ||||||
Estimated fair value amount | $ 9,000 | ||||||
Expected useful life | 60 months | ||||||
Next Cala, Inc. [Member] | |||||||
Organization and Description of Business (Textual) | |||||||
Ownership percentage in subsidiaries | 94.00% | ||||||
Percentage of interests and shares received | 60.00% | ||||||
Limecom, Inc. [Member] | |||||||
Organization and Description of Business (Textual) | |||||||
Percentage of interests and shares received | 100.00% | ||||||
Fisk Holdings [Member] | |||||||
Organization and Description of Business (Textual) | |||||||
Business acquisition contributed | $ 500,000 | ||||||
Meimoun And Mammon [Member] | |||||||
Organization and Description of Business (Textual) | |||||||
Ownership percentage in subsidiaries | 100.00% | ||||||
Next Mobile 360, LLC. [Member] | |||||||
Organization and Description of Business (Textual) | |||||||
Ownership percentage in subsidiaries | 100.00% | ||||||
SDI NEXT Distribution LLC [Member] | |||||||
Organization and Description of Business (Textual) | |||||||
Ownership percentage in subsidiaries | 51.00% | ||||||
Nxtgn [Member] | |||||||
Organization and Description of Business (Textual) | |||||||
Ownership percentage in subsidiaries | 65.00% |
Cima Telecom Inc (Details)
Cima Telecom Inc (Details) - shares | Sep. 17, 2020 | Jul. 23, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Cima Telecom Inc (Textual) | ||||
License agreement, description | Under the License Agreement Cima received a 1-time licensing fee in the amount of $9,000 in the form of a convertible note that may be converted, at the option of Cima, into up to 25% of the total shares of Common Stock of the Company, par value $0.001 per share (the “Common Stock”) on a fully diluted basis as of December 31, 2019. On December 31, 2019, CIMA exercised its option to convert the Convertible Promissory Note into 702,992 shares of Common Stock of the Company. Pursuant to the License Agreement, the Company shall pay CIMA annual fees for the maintenance and support services in accordance with the following schedule: (i) for the first (1st) calendar year from the Effective Date, $300 to be paid on June 30, 2020; (ii) for the second (2nd) calendar year from the Effective Date, $500 to be paid on December 31, 2020; (iii) for the third (3rd) calendar year from the Effective Date, $700 to be paid on December 31, 2021; (iv) for the fourth (4th) calendar year from the Effective Date, $1,000 to be paid on December 31, 2022; (v) for the fifth (5th) calendar year from the Effective Date, $640 to be paid on December 31, 2022; and (vi) for each calendar year thereafter, $640 to be paid on the anniversary date. | |||
Note and warrant purchase agreement, description | (i) CIMA a 3% convertible promissory note (the "Convertible Promissory Note") in the principal amount of $9,000 and (ii) (a) CIMA a warrant (the "CIMA Warrant") , to purchase from the Company an aggregate of duly authorized, validly issued, fully paid and nonassessable shares (the "Shares") of common stock of the Company, par value $0.001 per share (the "Common Stock"), equal to 25% of shares of Common Stock or any other equity issued upon the conversion of the Series B preferred stock. | |||
Side letter agreement, description | CIMA has a co-sale right to participate in a sale of shares of the Company’s Common Stock, in the event that Mr. De Prado, Mr. Maimon or any other director or officer of the Company holding greater than 1% of the Company’s Common Stock (on a fully diluted basis) proposes to sell any of his, her or its shares of Common Stock. In addition, CIMA and/or Dinar have been granted certain information rights, subject to their continued ownership of the CIMA Convertible Promissory Note or of 5% or more shares of the Company’s issued and outstanding Common Stock. Furthermore, pursuant to the Side Letter Agreement, upon a successful up-listing of the Company’s shares on the Nasdaq Capital Markets and once the market capitalization of the Company is greater than $50 million for a period of 10 consecutive trading days, Mr. Maimon and Mr. De Prado will have a right to earn a special bonus in the amount of $500 each. | |||
Issued and outstanding common stock, percentage | 25.00% | |||
Convertible Promissory Note Member [Member] | ||||
Cima Telecom Inc (Textual) | ||||
Issuance of common stock | 702,992 | |||
Issued and outstanding common stock, percentage | 25.00% | |||
Warrant [Member] | ||||
Cima Telecom Inc (Textual) | ||||
Issuance of common stock | 2,000,000 | |||
Processing Services Agreement [Member] | ||||
Cima Telecom Inc (Textual) | ||||
Side letter agreement, description | The Company entered into a five year Processing Services Agreement ("PSA") with Incomm, a leading payments technology company, to power and expand the Company's GPR card network. Incomm distributes Gift and GPR Cards to over 210,000 U.S. retailers and has long standing partnerships with over 1,000 of the most recognized brands that are eligible for Cuentas' Discount Purchase Platform. | The company will pay an initial Program Setup & Implementation Fees in the amount of $500, of which $300 were paid during 2020, then $50 each at the beginning of the second, third, fourth and fifth anniversary of the agreement. In addition, the Company will pay a minimum monthly fee of $30 starting on the fourth month of the first year following the launch of the Cuentas GPR card, $50 during the second year following the launch of the Cuentas GPR card and $75 thereafter. The Company will as also pay 0.25% of all funds added to the Cuentas GPR cards, excluding Vanilla Direct Reload Network and an API Services fee of $0.005 per transaction. The Company may pay other fees as agreed between the Company and InComm. | ||
Side Letter Agreement [Member] | ||||
Cima Telecom Inc (Textual) | ||||
Issued and outstanding common stock, percentage | 5.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies and Basis of Presentation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value of Embedded Derivative Liabilities: | ||
Balance, Beginning | $ 3 | $ 33 |
Change in fair value | (3) | (30) |
Balance, Ending | $ 3 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies and Basis of Presentation (Details 1) | 12 Months Ended |
Dec. 31, 2019$ / shares | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Common stock price | $ 5.7 |
Expected volatility | 220.00% |
Expected term | 2 months 30 days |
Risk free rate | 1.55% |
Forfeiture rate | 0.00% |
Expected dividend yield | 0.00% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies and Basis of Presentation (Details 2) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets: | ||
Total assets | $ 3 | $ 1 |
Liabilities: | ||
Total liabilities | 102 | 745 |
Marketable securities [Member] | ||
Assets: | ||
Total assets | 3 | 1 |
Stock based liabilities [Member] | ||
Liabilities: | ||
Total liabilities | 102 | 742 |
Short Term Derivative Value [Member] | ||
Liabilities: | ||
Total liabilities | 3 | |
Level 1 [Member] | ||
Assets: | ||
Total assets | 3 | 1 |
Liabilities: | ||
Total liabilities | 102 | 745 |
Level 1 [Member] | Marketable securities [Member] | ||
Assets: | ||
Total assets | 3 | 1 |
Level 1 [Member] | Stock based liabilities [Member] | ||
Liabilities: | ||
Total liabilities | 102 | 742 |
Level 1 [Member] | Short Term Derivative Value [Member] | ||
Liabilities: | ||
Total liabilities | 3 | |
Level 2 [Member] | ||
Assets: | ||
Total assets | ||
Liabilities: | ||
Total liabilities | ||
Level 2 [Member] | Marketable securities [Member] | ||
Assets: | ||
Total assets | ||
Level 2 [Member] | Stock based liabilities [Member] | ||
Liabilities: | ||
Total liabilities | ||
Level 2 [Member] | Short Term Derivative Value [Member] | ||
Liabilities: | ||
Total liabilities | ||
Level 3 [Member] | ||
Assets: | ||
Total assets | ||
Liabilities: | ||
Total liabilities | ||
Level 3 [Member] | Marketable securities [Member] | ||
Assets: | ||
Total assets | ||
Level 3 [Member] | Stock based liabilities [Member] | ||
Liabilities: | ||
Total liabilities | ||
Level 3 [Member] | Short Term Derivative Value [Member] | ||
Liabilities: | ||
Total liabilities |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies and Basis of Presentation (Details Textual) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)Segments$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | |
Summary of Significant Accounting Policies and Basis of Presentation (Textual) | ||
FDIC insured | $ 250 | $ 250 |
Trading gains (losses) | $ 2 | $ (78) |
Number of business segments | Segments | 2 | |
Common stock shares issued | shares | 36,394 | |
Options to purchases, description | Of these potentially dilutive securities, only 105,700 shares which the Company is obligated to issue and 56,000 options to purchase of common stock at price of $6.69 per share are included in the computation of diluted earnings per share. Additionally, the Company had a Convertible note totaling $250,000 representing an additional 33,334 common shares included in the computation of diluted earnings per share because the effect of including the remaining instruments would be anti-dilutive. | |
Advertising costs | $ 88 | $ 25 |
Convertible note amount | 250,000 | 250,000 |
Depreciation expenses | $ 1 | $ 1 |
Warrant [Member] | ||
Summary of Significant Accounting Policies and Basis of Presentation (Textual) | ||
Purchase of common stock | shares | 54,762 | |
Convertible Debt [Member] | ||
Summary of Significant Accounting Policies and Basis of Presentation (Textual) | ||
Potentially dilutive securities | shares | 226,356 | 105,700 |
Purchase of common stock | shares | 135,200 | 84,818 |
Minimum [Member] | ||
Summary of Significant Accounting Policies and Basis of Presentation (Textual) | ||
Estimated useful lives of the related assets | P3Y0M0D | |
Minimum [Member] | Warrant [Member] | ||
Summary of Significant Accounting Policies and Basis of Presentation (Textual) | ||
Common stock at prices | $ / shares | $ 8.12 | |
Minimum [Member] | Convertible Debt [Member] | ||
Summary of Significant Accounting Policies and Basis of Presentation (Textual) | ||
Common stock at prices | $ / shares | $ 5.22 | $ 5.23 |
Maximum [Member] | ||
Summary of Significant Accounting Policies and Basis of Presentation (Textual) | ||
Estimated useful lives of the related assets | P5Y0M0D | |
Maximum [Member] | Warrant [Member] | ||
Summary of Significant Accounting Policies and Basis of Presentation (Textual) | ||
Common stock at prices | $ / shares | $ 20 | |
Maximum [Member] | Convertible Debt [Member] | ||
Summary of Significant Accounting Policies and Basis of Presentation (Textual) | ||
Common stock at prices | $ / shares | $ 14.35 | $ 135 |
Accounts Receivable [Member] | ||
Summary of Significant Accounting Policies and Basis of Presentation (Textual) | ||
Allowance for doubtful accounts | $ 20 | $ 20 |
Other Accounts Liabilities (Det
Other Accounts Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Other Accounts Liabilities [Abstract] | ||
Accrued expenses, interest and other liabilities | $ 76 | $ 201 |
Accrued salaries, bonuses and wages | 2,119 | 540 |
Total | $ 2,195 | $ 741 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | ||||
Nov. 12, 2020 | Sep. 15, 2020 | Dec. 31, 2020 | Sep. 17, 2020 | Dec. 31, 2019 | |
Short Term Loans (Textual) | |||||
Issuance of promissory note | $ 250 | $ 605 | |||
Interest at a rate percentage | 10.00% | 12.00% | |||
Maturity date | Nov. 12, 2021 | Sep. 14, 2021 | |||
Conversion price per share | $ 6.875 | ||||
Original issuance of discount amount | $ 60 | ||||
Issuance of expenses | 40 | ||||
Net proceeds amount | $ 505 | ||||
Common stock, issued | 56,725 | 10,590,491 | 56,725 | 1,855,656 | |
Common stock issued for consideration of commitment fees | 13,200 | 13,200 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | |
Due from related parties | |||
Next Cala 360 | [1] | $ 54 | $ 54 |
Total Due from related parties | 54 | 54 | |
Related party payables, net of discounts | |||
Due to Next Communications, Inc. (current) | [2] | 10 | 10 |
Principal and interest due to Dinar Zuz LLC due to Dinar Zuz LLC | [3] | 355 | |
Due to Cima Telecom Inc. | [4] | 417 | |
Total Due from related parties | $ 782 | $ 10 | |
[1] | Next Communication, Inc. is a corporation in which the Company's Chief Executive Officer a controlling interest and serves as the Chief Executive Officer. See disclosure above regarding payments by the Company in connection with the bankruptcy of Next Communication, Inc. | ||
[2] | Next Cala 360, is a Florida corporation established and managed by the Company's Chief Executive Officer. | ||
[3] | Due to the April 6, 2020, Loan Agreement with the Company to borrow up to $462 at an annual interest rate of nine percent (9.0%) (the second "Dinar Zuz Note"). | ||
[4] | Composed from annual fees in the amount of $300 for the maintenance and support services in accordance with the software maintenance agreement for the first calendar year from the Effective Date, reimbursement of legal fees in the amount of $65 and other software development services. |
Related Party Transactions (D_2
Related Party Transactions (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | Dec. 15, 2020 | Jul. 24, 2020 | Dec. 27, 2019 | Jan. 29, 2019 | Nov. 28, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Aug. 25, 2020 | Jul. 02, 2020 | Apr. 06, 2020 |
Related Party Transactions (Textual) | ||||||||||
Interest expense | $ 67 | |||||||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||||||
Related party transactions, description | The United States Bankruptcy Court Southern District of Florida, Miami Division, approved a plan of reorganization for Next Communications, Inc. whereby the Company would pay $600,000 to a specific creditor in consideration for the forgiveness of the balance of the related party payable balance. On March 5, 2019, Cuentas paid $60,000 to the trust account of the specific creditor and on May 10, 2019, the Company paid $550,000 to the trust account of the specific creditor per the order and satisfied its obligation under the Approved Plan of the Reorganization for Next Communications, Inc., that was approved by the United States Bankruptcy Court Southern District of Florida, Miami Division, on January 29, 2019. | |||||||||
Convertible Notes Payable [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Interest expense | $ 0 | |||||||||
Dinar Zuz LLC [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Loan amount | $ 355 | $ 462 | $ 462 | |||||||
Annual interest rate percentage | 9.00% | |||||||||
Arik Maimon [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Loan amount | $ 50 | |||||||||
Annual interest rate percentage | 9.00% | |||||||||
Arik Maimon [Member] | Employment Agreements [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Employment agreements term, description | (a) a base salary of $295,000 per annum; (b) a Funding Bonus equal to 0.5% of the amount of the funding that exceeds the Funding Threshold; (c) a change of control bonus, if applicable; (d) participation in the Company’s employee benefits plan; | (a) a base salary of $295 per annum which will increase by a minimum $15or 5% on the 12 month anniversary of his employment agreement; (b) Restricted Stock Units; (c) a minimum grant of 40,000 stock options per year, with share price valued at the date of exercise, pursuant to the terms and conditions of the Company’s Stock Option Incentive Plan; (d) a $10 automobile expense allowance per year; (e) participation in the Company’s employee benefits plan; (f) participation in the Company’s Performance Bonus Plan, if and when in effect. | ||||||||
Granted stock | 44,000 | |||||||||
Bonus received | $ 250 | |||||||||
Common stock, par value | $ 0.001 | |||||||||
Arik Maimon [Member] | Employment Agreements [Member] | Minimum [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Exercise options to purchase percentage | 5.00% | |||||||||
Cima Telecom Inc. [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Annual fees amount | 300 | |||||||||
Reimbursement of legal fees amount | 65 | |||||||||
Michael De Prado [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Salary | $ 162,500 | |||||||||
Initial years term | 5 years | |||||||||
Employment bonus amount | $ 100,000 | |||||||||
Michael De Prado [Member] | Employment Agreements [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Employment agreements term, description | (a) a base salary of $265,000 per annum; (b) a Funding Bonus equal to 0.5% of the amount of the funding that exceeds the Funding Threshold; (c) a change of control bonus, if applicable; (d) participation in the Company’s employee benefits plan; | (a) a base salary of $265 per annum which will increase by a minimum $15 or 5% on the 12 month anniversary of his employment agreement; (b) Restricted Stock Units; (c) a minimum grant of 40,000 stock options per year, with the exercise price valued based on the Company’s stock price at the date of exercise, pursuant to the terms and conditions of the Company’s Stock Option Incentive Plan; (d) an $8,000 automobile expense allowance per year; (e) participation in the Company’s employee benefits plan; (f) participation in the Company’s Performance Bonus Plan, if and when in effect. | ||||||||
Granted stock | 35,200 | |||||||||
Bonus received | $ 250 | |||||||||
Common stock, par value | $ 0.001 | |||||||||
Employment agreements initial term, description | Each of Mr. De Prado and Mr. Maimon will be employed for an initial term of five years which will automatically renew for successive one-year period unless either party terminates the New Employment Agreements with 90 days’ prior notice. | |||||||||
Michael De Prado [Member] | Employment Agreements [Member] | Minimum [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Exercise options to purchase percentage | 4.00% | |||||||||
Juan Martin Gomez [Member] | Consulting Agreement [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Employment agreements term, description | The Company entered into a consulting agreement with Juan Martin Gomez, who is currently the chief executive officer and a 25% shareholder of CIMA. Pursuant to the Consulting Agreement, Mr. Martin will have access to the Company's facilities once a week and provide consulting services to the Company, including support for marketing and corporate structuring, for a term of one year, which term may be extended upon satisfactory performance of his duties. In exchange for his consulting services, the Company will pay Mr. Martin a monthly fee of $5. | |||||||||
AKG Consulting, Inc. [Member] | ||||||||||
Related Party Transactions (Textual) | ||||||||||
Purchases from related parties | $ 66 | $ 6 |
Stock Options (Details)
Stock Options (Details) - Employee Stock Option [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding, Beginning | 84,818 | 64,818 |
Granted | 79,200 | 20,000 |
Forfeited | 28,818 | |
Outstanding, Ending | 135,200 | 84,818 |
Weighted - Average Exercise Price Per Share Outstanding, Beginning | $ 31.97 | $ 40.23 |
Weighted - Average Exercise Price Per Share, Granted | 14.35 | 5.23 |
Weighted - Average Exercise Price Per Share, Forfeited | 81.12 | |
Weighted - Average Exercise Price Per Share Outstanding, Ending | $ 11.18 | $ 31.97 |
Stock Options (Details 1)
Stock Options (Details 1) - Stock Option [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Outstanding, Number of Option Shares | 135,200 | 84,818 | 64,818 |
Outstanding, Weighted Average Exercise Price | $ 11.18 | $ 31.97 | $ 40.23 |
Outstanding, Weighted Average Remaining Life (Years) | 3 years 8 months 5 days | 2 years 9 months | |
Exercisable, Number of Option Shares | 123,200 | 72,818 | |
Exercisable, Weighted Average Exercise Price | $ 11.18 | $ 36 | |
14.35 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise Prices | $ 14.35 | ||
Outstanding, Number of Option Shares | 79,200 | ||
Outstanding, Weighted Average Exercise Price | $ 14.35 | ||
Outstanding, Weighted Average Remaining Life (Years) | 4 years 2 months 27 days | ||
Exercisable, Number of Option Shares | 79,200 | ||
Exercisable, Weighted Average Exercise Price | $ 14.35 | ||
7.50 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise Prices | $ 7.50 | $ 7.50 | |
Outstanding, Number of Option Shares | 36,000 | 36,000 | |
Outstanding, Weighted Average Exercise Price | $ 7.50 | $ 7.50 | |
Outstanding, Weighted Average Remaining Life (Years) | 3 years 8 months 16 days | 4 years 8 months 16 days | |
Exercisable, Number of Option Shares | 36,000 | 24,000 | |
Exercisable, Weighted Average Exercise Price | $ 7.50 | $ 7.50 | |
5.23 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise Prices | $ 5.23 | $ 5.23 | |
Outstanding, Number of Option Shares | 20,000 | 20,000 | |
Outstanding, Weighted Average Exercise Price | $ 5.23 | $ 5.23 | |
Outstanding, Weighted Average Remaining Life (Years) | 3 years 2 months 27 days | 4 years 2 months 27 days | |
Exercisable, Number of Option Shares | 20,000 | 20,000 | |
Exercisable, Weighted Average Exercise Price | $ 5.23 | $ 5.23 | |
135.00 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise Prices | $ 135 | ||
Outstanding, Number of Option Shares | 10,000 | ||
Outstanding, Weighted Average Exercise Price | $ 135 | ||
Outstanding, Weighted Average Remaining Life (Years) | 2 months 30 days | ||
Exercisable, Number of Option Shares | 10,000 | ||
Exercisable, Weighted Average Exercise Price | $ 135 | ||
52.50 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise Prices | $ 52.50 | ||
Outstanding, Number of Option Shares | 18,818 | ||
Outstanding, Weighted Average Exercise Price | $ 52.50 | ||
Outstanding, Weighted Average Remaining Life (Years) | 1 year 5 months 27 days | ||
Exercisable, Number of Option Shares | 18,818 | ||
Exercisable, Weighted Average Exercise Price | $ 52.50 |
Stock Options (Details 2)
Stock Options (Details 2) | 12 Months Ended |
Dec. 31, 2020shares | |
Share-based Payment Arrangement [Abstract] | |
Common stock price | 6.35 |
Dividend yield | 0.00% |
Risk-free interest rate | 1.89% |
Expected term (years) | 3 years |
Expected volatility | 328.00% |
Stock Options (Details Textual)
Stock Options (Details Textual) - Employee Stock Option [Member] $ / shares in Units, $ in Thousands | 1 Months Ended |
Mar. 31, 2020USD ($)$ / sharesshares | |
Chief Executive Officer [Member] | |
Stock Options (Textual) | |
Options issued | shares | 79,200 |
Options Excercise price | $ / shares | $ 14.35 |
Fair value of options | $ | $ 456 |
President [Member] | |
Stock Options (Textual) | |
Options issued | shares | 79,200 |
Options Excercise price | $ / shares | $ 14.35 |
Fair value of options | $ | $ 456 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 12 Months Ended |
Dec. 31, 2020shares | |
Balance, December 31, 2019 | 1,855,656 |
Balance, December 31, 2020 | 10,590,491 |
Common Stock [Member] | |
Balance, December 31, 2019 | 1,855,656 |
Shares issued for Common Stock | 32,000 |
Shares issued due to conversion of Convertible Promissory Note | 503,115 |
Settlement of stock-based liabilities | 26,534 |
Shares issued to a lender | 56,725 |
Shares issued for services | 36,000 |
Shares issued to employees | 23,333 |
Shares issued due to conversion of 8,000,000 Series B preferred stock, $0.001 par value shares | 8,000,000 |
Shares issued due to conversion of Warrants | 57,128 |
Balance, December 31, 2020 | 10,590,491 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | Mar. 03, 2020 | Jan. 14, 2020 | Jan. 09, 2020 | Jan. 03, 2020 | Nov. 20, 2020 | Nov. 12, 2020 | Sep. 30, 2020 | Sep. 17, 2020 | Aug. 20, 2020 | May 22, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Sep. 15, 2020 | Aug. 27, 2020 | Aug. 21, 2020 | Apr. 02, 2020 | Feb. 10, 2019 |
Stockholders' Equity (Textual) | |||||||||||||||||
Common stock shares, issued | 56,725 | 1,855,656 | 10,590,491 | 56,725 | |||||||||||||
Fair market value | $ 390 | ||||||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||||||||||||
Common stock issued for consideration of commitment fees | 13,200 | 13,200 | |||||||||||||||
Common stock, shares authorized | 360,000,000 | 360,000,000 | |||||||||||||||
November 20, 2015 [Member] | |||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||
Common stock, par value | $ 0.001 | ||||||||||||||||
November 20, 2015 [Member] | Minimum [Member] | |||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||
Common stock, shares authorized | 9,500,000,000 | ||||||||||||||||
November 20, 2015 [Member] | Maximum [Member] | |||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||
Common stock, shares authorized | 360,000,000 | ||||||||||||||||
Advisory Agreement [Member] | |||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||
Advisory agreement, description | The Company entered into an advisory agreement with an advisor, pursuant to which the advisor will provide certain management consulting services and in consideration the Company will issue to the advisor a five-year warrant to acquire up to 40,000 shares of common stock of the Company, exercisable at any time at $8.25 per share, on a cash or cashless basis. The Company issued such Warrants in reliance on the exemptions from registration pursuant to Section 4(a)(2) of the Securities Act. | ||||||||||||||||
Private Investor [Member] | |||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||
Common stock shares, issued | 40,000 | ||||||||||||||||
Common stock, par value | $ 0.001 | ||||||||||||||||
warrants to purchase | 39,734 | ||||||||||||||||
Common Stock at an exercise price | $ 8.125 | ||||||||||||||||
Convertible promissory note, description | The Company issued a convertible promissory note to a private investor in the amount of $250, which matures on November 12, 2021. Interest accrues from the date of the note on the unpaid principal amount at a rate equal to 10.00% per annum, calculated as simple interest. The holder may elect to convert all or any part of the then outstanding principal and accrued but unpaid interest due under the note into shares of Common Stock until maturation. The conversion price of the note is $6.87 per share, which may be proportionately adjusted as appropriate to reflect any stock dividend, stock split, reverse stock split or other similar event affecting the number of outstanding shares of Common Stock of the Company without the payment of consideration to the Company therefor at any time prior to conversion. The Company issued such convertible promissory note in reliance on the exemptions from registration pursuant to Section 4(a)(2) of the Securities Act. | ||||||||||||||||
Common Stock [Member] | |||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||
Common stock shares, issued | 26,534 | 17,128 | |||||||||||||||
Fair market value | $ 459 | ||||||||||||||||
Common stock, par value | $ 0.001 | ||||||||||||||||
warrants to purchase | 29,232 | ||||||||||||||||
Common Stock at an exercise price | $ 8.125 | ||||||||||||||||
Common Stock [Member] | Employees [Member] | |||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||
Common stock shares, issued | 23,334 | ||||||||||||||||
Fair market value | $ 332 | ||||||||||||||||
Service Agreement [Member] | |||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||
Common stock shares, issued | 16,000 | 20,000 | 28,000 | 4,000 | |||||||||||||
Fair market value | $ 240 | $ 180 | |||||||||||||||
Dinar Zuz LLC [Member] | |||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||
Additional Amount | $ 300 | ||||||||||||||||
Common stock shares, issued | 40,000 | ||||||||||||||||
Conversion amount | $ 300 | ||||||||||||||||
Securities purchase agreement, description | Dinar Zuz provided an additional amount of $450 to the Company which was be provided in a form of the Dinar Zuz Convertible Note pursuant to a securities purchase agreement between the Company and Dinar Zuz, dated July 30, 2019. The Company issued 462,991 shares of its Common Stock to Dinar Zuz LLC, as a result of a conversion of the Dinar Convertible Note in the amount of $700. | ||||||||||||||||
Dinar Zuz and Cima Telecom Inc [Member] | |||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||
Common stock shares, issued | 2,000,000 | ||||||||||||||||
Common stock, par value | $ 0.001 | ||||||||||||||||
Series B Preferred Stock [Member] | |||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||
Preferred stock, shares designated | 10,000,000 | 10,000,000 | |||||||||||||||
Convertible preferred stock converted to common stock | 4,000,000 | ||||||||||||||||
Issuance of additional conversion shares | 4,000,000 | ||||||||||||||||
Preferred stock, voting rights, description | The holders of Series B Preferred Stock were entitled to 1,000 votes for each share of Series B Stock that is held when voting together with holders of the Common Stock. | ||||||||||||||||
Common stock, par value | $ 0.001 | ||||||||||||||||
Common stock converted outstanding shares | 4,000,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Nov. 01, 2019 | May 01, 2019 | Dec. 07, 2018 | Nov. 16, 2020 | Jan. 29, 2019 | Nov. 07, 2018 | Oct. 25, 2018 | Oct. 23, 2018 | Dec. 20, 2017 | Dec. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies (Textual) | |||||||||||
Legal settlement alleging claim, description | Even though the Company made the agreed payment of $10,000 on January 2, 2017, and issued 6,001 shares of Common Stock as conversion of the $70,000 note as agreed in its settlement agreement. | ||||||||||
Monthly rental payments of lease | $ 6 | ||||||||||
Claim for related party | $ 473 | ||||||||||
Service provider claiming breach of contract | $ 420 | $ 989 | |||||||||
Commitments and contingencies, description | The arbitration demand originated from another demand for arbitration that Secure IP received from VoIP Capital International (“VoIP”) in March 2019, demanding $1,052,838.09 in damages allegedly caused by unpaid receivables that Limecom assigned to VoIP based on the RCS. On June 5, 2020, SecureIP filed a complaint against Limecom, Heritage Ventures Limited (“Heritage”), an unrelated third party and owner of Limecom, and the Company. The complaint primarily concerns alleged indebtedness owed SecureIP by Limecom. SecureIP also alleges that Cuentas received certain transfers of funds which it alleges may be an avoidable transfer under Florida Statute §725.105 up to $1,052,838.09. Cuentas is contemplating filing a motion to dismiss the complaint and disputes that it received the alleged $1,052,838.09 from Limecom. Moreover, to the extent Cuentas has exposure for any transfers from Limecom, both Limecom and Heritage have indemnified Cuentas for any such liability. The Company will vigorously defend its position to be removed as a named party in this action due to the fact that Cuentas rescinded the Limecom Acquisition on January 30, 2019. | The Company was served with another complaint by JP Carey claiming similar issues as to the previous complaint, with the new claimed damages totaling $1,108,037.85. JP Carey and the Company filed motions for a summary judgment. | |||||||||
IDT Domestic Telecom, Inc [Member] | |||||||||||
Commitments and Contingencies (Textual) | |||||||||||
Claim for related party | $ 50 | ||||||||||
JP Carey [Member] | |||||||||||
Commitments and Contingencies (Textual) | |||||||||||
Payment from related party | $ 141 | ||||||||||
Telco Cuba Inc. [Member] | |||||||||||
Commitments and Contingencies (Textual) | |||||||||||
Advertising and other damages | $ 50 | ||||||||||
Service provider amount | $ 15 | ||||||||||
Michael Naparstek [Member] | |||||||||||
Commitments and Contingencies (Textual) | |||||||||||
Service provider claiming breach of contract for shares | 833,333 | ||||||||||
Commitments and contingencies, description | The Company was served with a complaint by former company Chief Financial Officer, Michael Naparstek, claiming breach of contract for 833,333 shares (pre-2018 reverse stock split), $25,554 of compensation and $8,823 of expenses. This case was withdrawn in Palm Beach County and on January 11, 2019, a similar complaint was filed in Miami-Dade County. During the recent mediation, the Parties reached an understanding of full settlement amount of $2,500. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Loss before taxes, as reported in the consolidated statements of operations | $ 7,483 | $ 1,286 |
Federal and State statutory rate | 26.50% | 26.50% |
Theoretical tax benefit on the above amount at federal statutory tax rate | $ 1,982 | $ 341 |
Losses and other items for which a valuation allowance was provided or benefit from loss carry forward | (1,982) | (341) |
Actual tax income (expense) |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Net operating loss carry-forward | $ 3,185 | $ 1,830 |
Adjustments | (315) | (163) |
Valuation allowance | (2,870) | (1,667) |
Net deferred tax asset |
Income Taxes (Details 2)
Income Taxes (Details 2) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Income Tax Disclosure [Abstract] | |
Valuation allowance, December 31, 2019 | $ 1,667 |
Increase | 1,203 |
Valuation allowance, December 31, 2020 | $ 2,870 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Dec. 22, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes (Textual) | |||
Corporate tax rate, description | New tax bill was signed into law that reduced the federal income tax rate for corporations from 35% to 21%. The new bill reduced the blended tax rate for the Company from 39.50% to 26.50%. | ||
Income tax benefits | $ 0 | $ 0 | |
Net federal operating loss carry forward expiration date | Dec. 31, 2039 | ||
Tax credits, percentage | 50.00% |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) $ in Thousands | Mar. 05, 2021 | Mar. 04, 2021 | Feb. 02, 2021 | Jan. 28, 2021 |
Subsequent Events (Textual) | ||||
Fair market value | $ 459 | |||
Reverse split | As of February 2, 2021, the Company effected a 1-for-2.5 reverse split of its authorized and issued and outstanding shares of Common Stock. | |||
Subsequent events, description | The Company’s common stock and warrants began trading on The Nasdaq Capital Market under the symbols “CUEN” and “CUENW,” respectively. On February 4, 2020 the Company sold an aggregate of 2,790,697 units at a price to the public of $4.30 per unit (the “Offering”), each unit consisting of one share of the Company’s common stock, par value $0.001 per share (the “Common Stock”), and a warrant exercisable for five years to purchase one share of Common Stock at an exercise price of $4.30 per share (the “Warrants”), pursuant to that certain Underwriting Agreement, dated as of February 1, 2021 (the “Underwriting Agreement”), between the Company and Maxim Group LLC (the “Representative” or “Maxim”), as representative of the sole underwriter. In addition, pursuant to the Underwriting Agreement, the Company granted Maxim a 45-day option to purchase up to 418,604 additional shares of Common Stock, and/or 418,604 additional Warrants, to cover over-allotments in connection with the Offering. The Common Stock and the Warrants were offered and sold to the public pursuant to the Company’s registration statements on Form S-1 (File Nos. 333-249690 and 333-252642), filed by the Company with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), on October 28, 2020, as amended, and which became effective on February 1, 2021. The Company received gross proceeds of approximately $12.0 million, before deducting underwriting discounts and commissions of 8% of the gross proceeds and estimated Offering expenses, and intend to use the net proceeds from the Offering for sales and marketing; purchase of chip-based debit card stock for GPR and Starter cards; repayment of outstanding loans; research and development; and working capital and operating expenses purposes. The Underwriting Agreement contains customary representations, warranties, and covenants by the Company. It also provides for customary indemnification by each of the Company and the Underwriter for losses or damages arising out of or in connection with the offering, including for liabilities under the Securities Act, other obligations of the parties and termination provisions. In addition, pursuant to the terms of the Underwriting Agreement, certain existing stockholders and each of the Company’s directors and executive officers entered into “lock-up” agreements with the Underwriter that generally prohibit the sale, transfer, or other disposition of securities of the Company for a period of 180 days following February 1, 2021. The Company has also agreed that it will not issue or announce the issuance or proposed issuance of any common stock or common stock equivalents for a period of 180 days following the closing date, other than certain exempt issuances. Pursuant to the Underwriting Agreement, the Company also agreed to issue to Maxim warrants (the “Underwriter’s Warrants”) to purchase up to a total of 223,256 shares of Common Stock (8% of the shares of Common Stock sold in the Offering). The Underwriter’s Warrants are exercisable at $5.375 per share of Common Stock and have a term of five years. The Underwriter’s Warrants are subject to a lock-up for 180 days from the commencement of sales in the Offering, including a mandatory lock-up period in accordance with FINRA Rule 5110(e), and will be non-exercisable for six months after February 1, 2021. In addition, pursuant to the Underwriting Agreement, the Company granted Maxim a right of first refusal, for a period of twelve months from the commencement of sales in the Offering, to act as sole managing underwriter and bookrunner any and all future public or private equity, equity-linked or debt (excluding commercial bank debt) offerings. | |||
Offering expenses | $ 1,400 | |||
Maxim [Member] | ||||
Subsequent Events (Textual) | ||||
Additional Warrants issued | 418,604 | |||
Chief Financial Officer [Member] | ||||
Subsequent Events (Textual) | ||||
Issued shares of common stock | 20,000 | |||
Board of Directors [Member] | ||||
Subsequent Events (Textual) | ||||
Issued shares of common stock | 40,000 | |||
Special bonus amount | $ 500 | |||
Former Employee [Member] | ||||
Subsequent Events (Textual) | ||||
Issued shares of common stock | 2,933 |