Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 13, 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-Q | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Period Focus | Q3 | |
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 | 26,475,916 | |
Entity File Number | 333-148987 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | FL |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 343 | $ 16 |
Marketable securities | 2 | 1 |
Trade account receivables | 2 | |
Related parties | 56 | 54 |
Other current assets | 2 | 94 |
Total current assets | 405 | 165 |
Property and Equipment, net | 5 | 5 |
Intangible assets | 7,650 | 9,000 |
Total assets | 8,060 | 9,170 |
CURRENT LIABILITIES: | ||
Accounts payable | 2,044 | 1,525 |
Other accounts liabilities | 700 | 741 |
Deferred revenue | 611 | 537 |
Notes and Loan payable (note 4) | 514 | 109 |
Convertible Note | 250 | |
Related parties’ payables | 12 | 10 |
Loans from related parties | 355 | |
Derivative liability | 3 | |
Stock based liabilities | 15 | 742 |
Total current liabilities | 4,251 | 3,917 |
LONG TERM LIABILITY: | ||
EIDL Loan | 89 | |
Total long-term liabilities | 89 | |
TOTAL LIABILITIES | 4,340 | 3,917 |
STOCKHOLDERS' EQUITY | ||
Series B preferred stock, $0.001 par value, designated 10,000,000; 0 issued and outstanding as of September 30, 2020 and 10,000,000 issued and outstanding as of December 31, 2019 | 0 | 10 |
Common stock, authorized 360,000,000 shares, $0.001 par value; 26,475,916 and 4,639,139 issued and outstanding as of September 30, 2020 and December 31, 2019, respectively | 26 | 5 |
Additional paid in capital | 28,237 | 25,246 |
Accumulated deficit | (24,543) | (19,390) |
Total Cuestas Inc. stockholders' equity | 3,720 | 5,871 |
Non-controlling interest in subsidiaries | (618) | |
Total stockholders’ equity | 3,720 | 5,253 |
Total liabilities and stockholders’ equity | $ 8,060 | $ 9,170 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 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 | 26,475,916 | 4,639,139 |
Common stock, shares outstanding | 26,475,916 | 4,639,139 |
Series B Preferred Stock [Member] | ||
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 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
REVENUE | $ 134 | $ 247 | $ 385 | $ 811 |
COST OF REVENUE | 237 | 150 | 620 | 617 |
GROSS PROFIT (LOSS) | (103) | 97 | (235) | 194 |
OPERATING EXPENSES | ||||
Amortization of Intangible Assets | 450 | 1,350 | ||
General and administrative | 533 | 663 | 3,333 | 1,663 |
TOTAL OPERATING EXPENSES | 983 | 663 | 4,683 | 1,663 |
OPERATING LOSS | (1,086) | (566) | (4,918) | (1,469) |
OTHER INCOME (LOSS) | ||||
Other income (expense) | 16 | (16) | 97 | 2,523 |
Interest expense | (17) | (2) | (24) | (71) |
Gain on derivative liability | 5 | 3 | 30 | |
Gain (loss) from Change in fair value of stock-based liabilities | (52) | (113) | 307 | (133) |
TOTAL OTHER INCOME (LOSS) | (53) | (126) | 383 | 2,349 |
NET INCOME (LOSS) BEFORE CONTROLLING INTEREST | (1,139) | (692) | (4,535) | 880 |
NET LOSS ATTRIBUTILE TO NON-CONTROLLING INTEREST | (615) | (618) | (27) | |
NET INCOME (LOSS) ATTRIBUTILE TO CUENTAS INC. | $ (1,754) | $ (692) | $ (5,153) | $ 853 |
Net income (loss) per basic share | $ (0.12) | $ (0.31) | $ (0.6) | $ 0.41 |
Net income (loss) per diluted share | $ (0.12) | $ (0.31) | $ (0.6) | $ 0.34 |
Weighted average number of basic common shares outstanding | 14,125,811 | 2,221,645 | 8,535,767 | 2,098,997 |
Weighted average number of diluted common shares outstanding | 14,125,811 | 2,221,645 | 8,535,767 | 2,527,327 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash Flows from Operating Activities: | ||
Net income(loss) before non-controlling interest | $ (4,535) | $ 880 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Stock based compensation and shares issued for services | 1,285 | 300 |
Imputed interest | 67 | |
Loss on fair value of marketable securities | (1) | 69 |
Interest on loans and debt amortization expenses | (10) | (2) |
Gain on derivative fair value adjustment | (3) | (30) |
Gain from change in on fair value of stock-based liabilities | (307) | 133 |
Depreciation and amortization expense | 1,350 | 1 |
Changes in Operating Assets and Liabilities: | ||
Accounts receivable | (2) | 18 |
Other receivables | 92 | 32 |
Accounts payable | 533 | (230) |
Other Accounts payable | 152 | 277 |
Related parties, net | (2,485) | |
Deferred revenue | 74 | (98) |
Net Cash Used by Operating Activities | (1,372) | (1,068) |
Cash Flows from Financing Activities: | ||
Related party, net | (610) | |
Proceeds from short term loans | 505 | |
Proceeds from Loans from Related parties | 355 | |
Repayments of loan, convertible notes and redeemable shares | (15) | |
Proceeds from issuance of Convertible notes | ||
Proceeds from loans from a Government Agency | 89 | |
Proceeds from issuance of common stock, net of issuance expense | 750 | 1,604 |
Net Cash Provided by Financing Activities | 1,699 | 979 |
Net Increase (Decrease) in Cash | 327 | (89) |
Cash at Beginning of Period | 16 | 154 |
Cash at End of Period | 343 | 65 |
Supplemental disclosure of non-cash financing activities | ||
Common stock issued for conversion of convertible note principal | 250 | |
Common stock issued for settlement of stock-based liabilities and accrued salaries | 442 | 464 |
Liability to redeem common stock subscribed | 80 | |
Common stock issued for settlement of common stock subscribed | $ 100 |
General
General | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL | NOTE 1 – GENERAL 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. The Company’s exclusivity with CIMA’s proprietary software platform enables Cuentas to offer comprehensive financial services and additional robust functionality that is absent from other General-Purpose Reloadable Cards (“GRP”). Additionally, The Company has an agreement with Interactive Communications International, Inc. (“InComm”) a leading processor of GPR debit cards, to market and distribute a line of GPR cards targeted towards the Latin American market. The Cuentas Fintech Card stores products purchased in the Virtual Market Place where Tier-1 retailers, gaming currencies, amazon cash, and wireless telecom prepaid minutes “top ups”. Additionally, well-known brand name restaurants in the marketplace automatically discount purchases at POS when the customer pays the bill with the Cuentas Card. 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 Group 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 1,757,478 shares of Common Stock of the Company. Upon the conversion of the Series B Preferred shares into common stock, CIMA received an additional 5 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, 2020 $ 1,800 2021 1,800 2022 1,800 2023 1,800 2024 1,800 Total $ 9,000 Amortization expense was $1,350 and $0 for the periods ended September 30, 2020 and 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 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. Amendments to Articles of Incorporation or Bylaws; On August 21, 2020, in connection with the Special Meeting (as defined below), 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 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) on a one-to-one basis. Additionally, the Company amended and restated its bylaws (the “Amended and Restated Bylaws”) to improve and enhance the Company’s corporate governance guidelines, to simplify the Bylaws, and to provide the Company with the flexibility necessary to carry out its business plans. Submission of Matters to a Vote of Security Holders On August 17, 2020 a Special Meeting of the Shareholders of Cuentas was held (the “ Special Meeting First Proposal: The adoption of the Amended and Restated Articles in order to, effective as of the date the Amended and Restated Articles are filed with the Secretary of State of the State of Florida, cause all outstanding shares of Preferred B Stock to be converted into shares of Common Stock on a one-to-one basis (the “Articles Proposal”). The affirmative vote of a majority of each of the Common Stock holders and Preferred Stock holders, voting as a separate group was needed to pass the Articles Proposal. Second Proposal: The adoption of the Amended and Restated Bylaws of the Company in order to improve and enhance the Company’s corporate governance structure, to simplify the Bylaws and to provide the Company with the flexibility necessary to carry out its business plan (the “Bylaws Proposal”). The affirmative vote of a majority of the shares of Common Stock and Preferred Stock entitled to vote, voting as a single class, was required to pass the Bylaws Proposal. Economic Injury Disaster Loan On May 16, 2020, the Company executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the SBA under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business. Pursuant to that certain Loan Authorization and Agreement (the “SBA Loan Agreement”), the principal amount of the EIDL Loan is $83, with proceeds to be used for working capital purposes. Interest accrues at the rate of 3.75% per annum and will accrue only on funds actually advanced. Installment payments, including principal and interest, are due monthly beginning May 16, 2021 (twelve months from the date of the SBA Note (defined below)) in the amount of $83. The balance of principal and interest is payable thirty years from the date of the SBA Note. In connection therewith, the Company received a $10 advance, which does not have to be repaid. In connection therewith, the Company executed (i) a note for the benefit of the SBA (the “SBA Note”), which contains customary events of default and (ii) a Security Agreement, granting the SBA a security interest in all tangible and intangible personal property of Maimon and Maimon, which also contains customary events of default (the “SBA Security Agreement”). 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. GOING CONCERN The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As of September 30, 2020, the Company had approximately $343 in cash and cash equivalents, approximately $3,846 in negative working capital and an accumulated deficit of approximately $24,543. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Company’s ability to continue as a going concern is dependent upon raising capital from financing transactions and revenue from operations. Management anticipates their business will require substantial additional investments that have not yet been secured. Management is continuing in the process of fund raising in the private equity and capital markets as the Company will need to finance future activities. These financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION Unaudited Interim Financial Statements The accompanying unaudited consolidated financial statements include the accounts of the Company and its subsidiaries, prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the financial statements presented herein have not been audited by an independent registered public accounting firm but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the financial condition, results of operations and cash flows for the for nine-months ended September 30, 2020. However, these results are not necessarily indicative of results for any other interim period or for the year ended December 31, 2020. The preparation of financial statements in conformity with GAAP requires the Company to make certain estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual amounts could differ from these estimates. Certain information and footnote disclosures normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission (“SEC”). The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on March 30, 2020 (the “Annual Report”). For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Principles of Consolidation The consolidated financial statements are prepared in accordance with US GAAP. The consolidated financial statements of the Company include the Company and its wholly-owned and majority-owned subsidiaries. All inter-company balances and transactions have been eliminated. Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, certain revenues and expenses, and disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results could differ from those estimates. Estimates are used when accounting for intangible assets, going concern and stock-based compensation. Deferred Revenue Deferred revenue is comprised mainly of unearned revenue related to prepayments from retail consumers for telecommunications minutes. The following table represents the changes in deferred revenue for the nine months ended September 30, 2020: Deferred Balance at December 31, 2019 $ 537 Change in deferred revenue 74 Balance at September 30, 2020 $ 611 Revenue allocated to remaining performance obligations represent contracted revenue that has not yet been recognized (“contracted not recognized”). Contracted not recognized revenue was $611 as of September 30, 2020, of which the Company expects to recognize 100% of the revenue over the next 12 months. Derivative 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 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 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, accounts 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 820, “Fair Value Measurements and Disclosure” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements. Fair value, as defined in ASC 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 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 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), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of income. 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 September 30, 2020 Level 1 Level 2 Level 3 Total Assets: Marketable securities 2 - - 2 Total assets 2 - - 2 Liabilities: Stock based liabilities 15 - - 15 Total liabilities 15 - - 15 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 Basic Income (Loss) Per Share Basic income (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. Recent Accounting Standards announced In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The amendments apply to reporting entities that are required to make disclosures about recurring or nonrecurring fair value measurements and should improve the cost, benefit, and effectiveness of the disclosures. ASU 2018-13 categorized the changes into those disclosures that were removed, those that were modified, and those that were added. The primary disclosures that were removed related to transfers between Level 1 and Level 2 investments, along with the policy for timing of transfers between levels. In addition, disclosing the valuation processes for Level 3 fair value measurements was removed. The amendments are effective for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company notes that this guidance will impact its disclosures beginning January 1, 2020. In June 2016, FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. In November 2018, FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses”, which amends the scope and transition requirements of ASU 2016-13. Topic 326 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. Topic 326 will originally become effective for the Company beginning January 1, 2020, with early adoption permitted, on a modified retrospective approach. As a smaller reporting company, the effective date for the Company has been delayed until fiscal years beginning after December 15, 2022, in accordance with ASU 2019-10, although early adoption is still permitted. This standard is not expected to have a material impact to the Company’s consolidated financial statements after evaluation. 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. |
Stock Options
Stock Options | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK OPTIONS | NOTE 3 – STOCK OPTIONS The following table summarizes all stock option activity for the nine months ended September 30, 2020: Shares Weighted- Outstanding, December 31, 2019 212,044 $ 12.79 Granted 198,000 5.74 Forfeited 72,044 32.45 Outstanding, September 30, 2020 338,000 $ 4.47 The following table discloses information regarding outstanding and exercisable options at September 30, 2020: Outstanding Exercisable Exercise Number of Weighted Average Weighted Average Number of Weighted Average $ 5.74 198,000 $ 5.74 2.49 198,000 $ 5.74 3.00 90,000 3.00 0.95 60,000 3.00 2.09 50,000 2.09 1.49 50,000 2.09 338,000 $ 9.38 1.93 338,000 $ 4.61 On March 30, 2020, the Company issued 198,000 options to its Chief Executive Officer and President of the Company. The options carry an exercise price of $5.74 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 2.54 Dividend yield 0 % Risk-free interest rate 1.89 % Expected term (years) 3 Expected volatility 328 % |
Short Term Loans
Short Term Loans | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
SHORT TERM LOANS | NOTE 4 – SHORT TERM LOANS 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, mature on September 14, 2021. The interest is paid monthly. Payment of principle starts after 3 months with ability to extend for up to 2 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 141,812 shares of its Common Stock pursuant to the Labrys Note. Out of those, 33,000 shares of Common Stock were issued in consideration of 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. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 5 – STOCKHOLDERS’ EQUITY Common Stock The following summarizes the Common Stock activity for the three months ended September 30, 2020: Summary of common stock activity for the nine months ended September 30, 2020 Outstanding shares Balance, December 31, 2019 4,639,139 Shares issued for Common Stock 80,000 Shares issued due to conversion of Convertible Promissory Note 1,257,478 Settlement of stock-based liabilities 66,334 Shares issued to a lender 141,812 Shares issued for services 90,000 Shares issued to employees 58,334 Shares issued due to conversion of 20,000,000 Series B preferred stock, $0.001 par value shares 20,000,000 Shares issued due to conversion of Warrants 142,819 Balance, September 30, 2020 26,475,916 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 100,000 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 40,000 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 66,334 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 58,334 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 10,000 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 1,157,478 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 70,000 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 42,819 shares of its Common Stock pursuant to a cashless conversion of warrants to purchase up to 73,080 shares of its Common Stock at an exercise price equal to $3.25 per share. On August 20, 2020, the Company issued 50,000 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 10,000,000 shares of the Company’s common stock, par value $0.001 per share. On September 17, 2020, the Company issued 5,000,000 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 141,812 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, 33,000 shares of Common Stock were issued in consideration of 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 100,000 of its Common Stock par value $0.001 per share to a private investor in consecration of cancellation of warrants to purchase up to 99,334 shares of its Common Stock at an exercise price equal to $3.25 per share. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 6 – RELATED PARTY TRANSACTIONS 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 September 30, 2020, the Company borrowed $355,000 under the second Dinar Note. On July 24, 2020, the Compensation Committee of the Board of Directors of 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 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 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 (4) 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 eighteen (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 officers 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 their 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 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 nine percent (9.0%). On September 30, 2020, the Company fully repaid its loan to Arik Maimon. Related party balances at September 30, 2020 and December 31, 2019 consisted of the following: Due from related parties September 30, December 31, (dollars in thousands) (a) Next Cala 360 56 54 Total Due from related parties 56 54 Related party payables, net of discounts September 30, December 31, (dollars in thousands) (c) Due to Dinar Zuz LLC $ 355 $ - (d) Due to Cima Telecom Inc. 413 - (b) Due to Next Communications, Inc. (current) 12 10 Total Due from related parties $ 780 $ 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 180 days 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 (1st) calendar year from the Effective Date, reimbursement of legal fees in the amount of $65 and other software development services. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 7 – COMMITMENTS AND CONTINGENCIES On February 12, 2018, the Company was served with a complaint from Viber Media, Inc. (“Viber”) for reimbursement of attorney’s fees and costs totalling $528 arising from a past litigation with Viber. The Company is vigorously defending their rights in this case as the Company believe this demand is premature as litigation is ongoing. On June 15, 2020, the claims against the Company and its subsidiary were dismissed. On July 6, 2017, the Company received notice an existing legal claim against Accent InterMedia (“AIM”) had been amended to include claims against the Company. The claims brought against the Company include failure to comply with certain judgments for collection of funds by the plaintiff while having a controlling interest in AIM via its ownership of Transaction Processing Products (“TPP”). On April 17, 2019, the Company entered into a settlement agreement (the “SVS Settlement Agreement”) with Comdata, Inc. d/b/a Stored Value Solutions (“SVS”) whereby the Company will pay a total of $37 over 7 months, starting July 1, 2019. Only in the event that the Company defaults by failing to make timely payments, SVS may file in Kentucky for the judgment of $70. On February 13, 2020, the Company completed the payments in accordance with the SVS Settlement Agreement and the case was dismissed. On December 20, 2017, a Complaint was filed by J. P. Carey Enterprises, Inc., alleging a claim for $473 related to the Franjose Yglesias-Bertheau filed lawsuit against PLKD listed above. Even though the Company made the agreed payment of $10 on January 2, 2017 and issued 12,002 shares as conversion of the $70 note as agreed in the settlement agreement, the Plaintiff alleges damages which the Company claims are without merit because they received full compensation as agreed. The Company is in the process of defending itself against these claims. On January 29, 2019, the Company was served with a complaint by J.P. Carey Enterprises, Inc., (“JP Carey”) which was filed in Fulton County, Georgia claiming similar issues as to the previous complaint, with the new claimed damages totaling $1,108. JP Carey and the Company filed a motion for a summary judgement. 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 June 29, 2020, the Business Court held a status conference to review the status of the case, the pending motions, and to set a case schedule. At the status conference, the Court indicated that it would review the pending cross-motions for summary judgment and the Company’s motion to strike JP Carey’s late-disclosed expert and contact the parties about setting an oral hearing on both motions at a later date. On October 1, 2020 the Superior Court judge entered a judgment in favor of Cuentas and denied JP Carey’s motion for summary judgment. On September 28, 2018, the Company was notified of a complaint filed against it by a former supplier. The Company has not yet received formal service of the complaint and is awaiting such service at which time it can fully assess the complaint. The Company has not accrued any losses as of September 30, 2020 related to the complaint given the early nature of the process. On November 7, 2018, the Company was served with a complaint by IDT Domestic Telecom, Inc. vs the Company and its subsidiary Limecom, Inc. for telecommunications services provided to the Subsidiary during 2018 in the amount of $50. The Company has no accrual as of September 30, 2020 related to the complaint given the early nature of the process. The Company intends to file a motion to dismiss the Company as a defendant since the Company has no contractual relationship with the plaintiff. 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. On May 1, 2019, the Company received a Notice of Demand for Arbitration (the “Demand”) from Secure IP Telecom, Inc. (“Secure IP), who allegedly had a Reciprocal Carrier Services Agreement (RCS) exclusively with Limecom and not with Cuentas. The Demand originated from a Demand for Arbitration that Secure IP received from VoIP Capital International (“VoIP”) in March 2019, demanding $1,053 in damages allegedly caused by unpaid receivables that Limecom assigned to VoIP based on the RCS. On June 5, 2020, Secure IP Telecom, Inc. (“SecureIP”) filed a complaint against Limecom, Inc., (“Limecom”), Heritage Ventures Limited (“Heritage”), an unrelated third party and owner of Limecom, and the Compasny. 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 $1,053. Cuentas is contemplating filing a motion to dismiss the complaint and disputes that it received the alleged $1,053 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. On January 24, 2020, the Company received a Corrected Notice of Hearing regarding Qualtel SA de CV, a Mexican Company vs Next Communications, Inc. for a “Plaintiff’s Motion for Order to Show Cause and/or for Contempt as to Non-Party, Cuentas, Inc.” The Company retained a counsel and will vigorously defend its position. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 8 – SUBSEQUENT EVENTS On October 28, 2020 the Company has filed a registration statement (File No. 333-249690) with the Securities Exchange Commission for the offering, and the Company intends to file a further prospectus with respect to the offering. Maxim Group LLC will act as the lead underwriter for the offering. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Unaudited Interim Financial Statements | Unaudited Interim Financial Statements The accompanying unaudited consolidated financial statements include the accounts of the Company and its subsidiaries, prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the financial statements presented herein have not been audited by an independent registered public accounting firm but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the financial condition, results of operations and cash flows for the for nine-months ended September 30, 2020. However, these results are not necessarily indicative of results for any other interim period or for the year ended December 31, 2020. The preparation of financial statements in conformity with GAAP requires the Company to make certain estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual amounts could differ from these estimates. Certain information and footnote disclosures normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission (“SEC”). The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on March 30, 2020 (the “Annual Report”). For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements are prepared in accordance with US GAAP. The consolidated financial statements of the Company include the Company and its wholly-owned and majority-owned subsidiaries. All inter-company balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, certain revenues and expenses, and disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results could differ from those estimates. Estimates are used when accounting for intangible assets, going concern and stock-based compensation. |
Deferred Revenue | Deferred Revenue Deferred revenue is comprised mainly of unearned revenue related to prepayments from retail consumers for telecommunications minutes. The following table represents the changes in deferred revenue for the nine months ended September 30, 2020: Deferred Balance at December 31, 2019 $ 537 Change in deferred revenue 74 Balance at September 30, 2020 $ 611 Revenue allocated to remaining performance obligations represent contracted revenue that has not yet been recognized (“contracted not recognized”). Contracted not recognized revenue was $611 as of September 30, 2020, of which the Company expects to recognize 100% of the revenue over the next 12 months. |
Derivative and Fair Value of Financial Instruments | Derivative 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 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 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, accounts 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 820, “Fair Value Measurements and Disclosure” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements. Fair value, as defined in ASC 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 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 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), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of income. 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 September 30, 2020 Level 1 Level 2 Level 3 Total Assets: Marketable securities 2 - - 2 Total assets 2 - - 2 Liabilities: Stock based liabilities 15 - - 15 Total liabilities 15 - - 15 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 |
Basic Income (Loss) Per Share | Basic Income (Loss) Per Share Basic income (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. |
Recent Accounting Standards announced | Recent Accounting Standards announced In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The amendments apply to reporting entities that are required to make disclosures about recurring or nonrecurring fair value measurements and should improve the cost, benefit, and effectiveness of the disclosures. ASU 2018-13 categorized the changes into those disclosures that were removed, those that were modified, and those that were added. The primary disclosures that were removed related to transfers between Level 1 and Level 2 investments, along with the policy for timing of transfers between levels. In addition, disclosing the valuation processes for Level 3 fair value measurements was removed. The amendments are effective for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company notes that this guidance will impact its disclosures beginning January 1, 2020. In June 2016, FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. In November 2018, FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses”, which amends the scope and transition requirements of ASU 2016-13. Topic 326 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. Topic 326 will originally become effective for the Company beginning January 1, 2020, with early adoption permitted, on a modified retrospective approach. As a smaller reporting company, the effective date for the Company has been delayed until fiscal years beginning after December 15, 2022, in accordance with ASU 2019-10, although early adoption is still permitted. This standard is not expected to have a material impact to the Company’s consolidated financial statements after evaluation. 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. |
General (Tables)
General (Tables) | 9 Months Ended |
Sep. 30, 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, 2020 $ 1,800 2021 1,800 2022 1,800 2023 1,800 2024 1,800 Total $ 9,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of changes in deferred revenue | Deferred Balance at December 31, 2019 $ 537 Change in deferred revenue 74 Balance at September 30, 2020 $ 611 |
Schedule of financial assets and liabilities are measured at fair value on a recurring basis | Balance as of September 30, 2020 Level 1 Level 2 Level 3 Total Assets: Marketable securities 2 - - 2 Total assets 2 - - 2 Liabilities: Stock based liabilities 15 - - 15 Total liabilities 15 - - 15 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 |
Stock Options (Tables)
Stock Options (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock option activity | Shares Weighted- Outstanding, December 31, 2019 212,044 $ 12.79 Granted 198,000 5.74 Forfeited 72,044 32.45 Outstanding, September 30, 2020 338,000 $ 4.47 |
Schedule of information regarding outstanding and exercisable options | Outstanding Exercisable Exercise Number of Weighted Average Weighted Average Number of Weighted Average $ 5.74 198,000 $ 5.74 2.49 198,000 $ 5.74 3.00 90,000 3.00 0.95 60,000 3.00 2.09 50,000 2.09 1.49 50,000 2.09 338,000 $ 9.38 1.93 338,000 $ 4.61 |
Schedule of estimated fair value options | Common stock price 2.54 Dividend yield 0 % Risk-free interest rate 1.89 % Expected term (years) 3 Expected volatility 328 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of common stock activity | Summary of common stock activity for the nine months ended September 30, 2020 Outstanding shares Balance, December 31, 2019 4,639,139 Shares issued for Common Stock 80,000 Shares issued due to conversion of Convertible Promissory Note 1,257,478 Settlement of stock-based liabilities 66,334 Shares issued to a lender 141,812 Shares issued for services 90,000 Shares issued to employees 58,334 Shares issued due to conversion of 20,000,000 Series B preferred stock, $0.001 par value shares 20,000,000 Shares issued due to conversion of Warrants 142,819 Balance, September 30, 2020 26,475,916 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of of related party balance | Due from related parties September 30, December 31, (dollars in thousands) (a) Next Cala 360 56 54 Total Due from related parties 56 54 Related party payables, net of discounts September 30, December 31, (dollars in thousands) (c) Due to Dinar Zuz LLC $ 355 $ - (d) Due to Cima Telecom Inc. 413 - (b) Due to Next Communications, Inc. (current) 12 10 Total Due from related parties $ 780 $ 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 180 days 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 (1st) calendar year from the Effective Date, reimbursement of legal fees in the amount of $65 and other software development services. |
General (Details)
General (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Intangible Assets | $ 9,000 |
Total, Amount | $ 9,000 |
Total, Life (months) | 60 months |
Intangible Assets [Member] | |
Total, Life (months) | 60 months |
General (Details 1)
General (Details 1) $ in Thousands | Sep. 30, 2020USD ($) |
Year ended December 31, | |
2020 | $ 1,800 |
2021 | 1,800 |
2022 | 1,800 |
2023 | 1,800 |
2024 | 1,800 |
Total | $ 9,000 |
General (Details Textual)
General (Details Textual) - USD ($) $ in Thousands | May 16, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 |
General (Textual) | |||||
License agreement, description | Under the License Agreement Cima Group 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 1,757,478 shares of Common Stock of the Company. Upon the conversion of the Series B Preferred shares into common stock, CIMA received an additional 5 million shares pursuant to their anti-dilution warrant agreement. | (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. | |||
Estimated fair value amount | $ 9,000 | ||||
Expected useful life | 60 months | ||||
Depreciation and amortization expense | $ 1,350 | $ 1 | |||
Cash and cash equivalents | $ 16 | 343 | $ 65 | $ 154 | |
Negative working capital | 3,846 | ||||
Accumulated deficit | $ (19,390) | (24,543) | |||
Other liability | 500 | ||||
Principal amount of EIDL Loan | $ 83 | ||||
Accured interest rate | 3.75% | ||||
SBA note amount | $ 83 | ||||
Principal and interest payable | $ 10 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies and Basis of Presentation (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Accounting Policies [Abstract] | |
Balance at December 31, 2019 | $ 537 |
Change in deferred revenue | 74 |
Balance at September 30, 2020 | $ 611 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies and Basis of Presentation (Details 1) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets, Fair Value Disclosure [Abstract] | ||
Total assets | $ 2 | $ 1 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Total liabilities | 15 | 745 |
Fair Value, Inputs, Level 1 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets | 2 | 1 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Total liabilities | 15 | 745 |
Fair Value, Inputs, Level 2 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Total liabilities | ||
Fair Value, Inputs, Level 3 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Total liabilities | ||
Marketable Securities [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets | 2 | 1 |
Marketable Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets | 2 | 1 |
Marketable Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets | ||
Marketable Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets | ||
Stock Based Liabilities [Member] | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Total liabilities | 15 | 742 |
Stock Based Liabilities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Total liabilities | 15 | 742 |
Stock Based Liabilities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Total liabilities | ||
Stock Based Liabilities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Total liabilities | ||
Short Term Derivative Value [Member] | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Total liabilities | 3 | |
Short Term Derivative Value [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Total liabilities | 3 | |
Short Term Derivative Value [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Total liabilities | ||
Short Term Derivative Value [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Total liabilities |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies and Basis of Presentation (Details Textual) | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Significant Accounting Policies and Basis of Presentation (Textual) | |
Revenue allocated to remaining performance obligations, description | Revenue allocated to remaining performance obligations represent contracted revenue that has not yet been recognized (“contracted not recognized”). Contracted not recognized revenue was $611 as of September 30, 2020, of which the Company expects to recognize 100% of the revenue over the next 12 months. |
Stock Options (Details)
Stock Options (Details) - Employee Stock Option [Member] | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding, Beginning | shares | 212,044 |
Granted | shares | 198,000 |
Forfeited | shares | 72,044 |
Outstanding, Ending | shares | 338,000 |
Weighted - Average Exercise Price Per Share Outstanding, Beginning | $ / shares | $ 12.79 |
Weighted - Average Exercise Price Per Share, Granted | $ / shares | 5.74 |
Weighted - Average Exercise Price Per Share, Forfeited | $ / shares | 32.45 |
Weighted - Average Exercise Price Per Share Outstanding, Ending | $ / shares | $ 4.47 |
Stock Options (Details 1)
Stock Options (Details 1) - Stock Option [Member] - $ / shares | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding, Number of Option Shares | 338,000 | 212,044 |
Outstanding, Weighted Average Exercise Price | $ 4.47 | $ 12.79 |
Outstanding, Weighted Average Remaining Life (Years) | 1 year 11 months 4 days | |
Exercisable, Number of Option Shares | 338,000 | |
Exercisable, Weighted Average Exercise Price | $ 4.61 | |
5.74 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise Prices | $ 5.74 | |
Outstanding, Number of Option Shares | 198,000 | |
Outstanding, Weighted Average Exercise Price | $ 5.74 | |
Outstanding, Weighted Average Remaining Life (Years) | 2 years 5 months 27 days | |
Exercisable, Number of Option Shares | 198,000 | |
Exercisable, Weighted Average Exercise Price | $ 5.74 | |
3.00 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise Prices | $ 3 | |
Outstanding, Number of Option Shares | 90,000 | |
Outstanding, Weighted Average Exercise Price | $ 3 | |
Outstanding, Weighted Average Remaining Life (Years) | 11 months 12 days | |
Exercisable, Number of Option Shares | 60,000 | |
Exercisable, Weighted Average Exercise Price | $ 3 | |
2.09 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise Prices | $ 2.09 | |
Outstanding, Number of Option Shares | 50,000 | |
Outstanding, Weighted Average Exercise Price | $ 2.09 | |
Outstanding, Weighted Average Remaining Life (Years) | 1 year 5 months 27 days | |
Exercisable, Number of Option Shares | 50,000 | |
Exercisable, Weighted Average Exercise Price | $ 2.09 |
Stock Options (Details 2)
Stock Options (Details 2) | 9 Months Ended |
Sep. 30, 2020shares | |
Share-based Payment Arrangement [Abstract] | |
Common stock price | 2.54 |
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) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Stock Options (Textual) | |
Options issued | shares | 198,000 |
Options Excercise price | $ / shares | $ 5.74 |
Fair value of options | $ | $ 456 |
Short Term Loans (Details)
Short Term Loans (Details) - USD ($) $ in Thousands | 1 Months Ended | |||
Sep. 15, 2020 | Sep. 30, 2020 | Sep. 17, 2020 | Dec. 31, 2019 | |
Short Term Loans (Textual) | ||||
Issuance of promissory note | $ 605 | |||
Interest at a rate percentage | 12.00% | |||
Maturity date | Sep. 14, 2021 | |||
Original issuance of discount amount | $ 60 | |||
Issuinance of expenses | $ 40 | |||
Common Stock, issued | 141,812 | 26,475,916 | 141,812 | 4,639,139 |
Common stock issued for consideration of commitment fees | 33,000 | 33,000 | ||
Net proceeds amount | $ 505 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 9 Months Ended |
Sep. 30, 2020shares | |
Equity [Abstract] | |
Balance, December 31, 2019 | 4,639,139 |
Shares issued for Common Stock | 80,000 |
Shares issued due to conversion of Convertible Promissory Note | 1,257,478 |
Settlement of stock-based liabilities | 66,334 |
Shares issued to a lender | 141,812 |
Shares issued for services | 90,000 |
Shares issued to employees | 58,334 |
Shares issued due to conversion of 20,000,000 Series B preferred stock, $0.001 par value shares | 20,000,000 |
Shares issued due to conversion of Warrants | 142,819 |
Balance, September 30, 2020 | 26,475,916 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | Mar. 03, 2020 | Jan. 14, 2020 | Jan. 09, 2020 | Jan. 03, 2020 | Sep. 17, 2020 | Aug. 20, 2020 | May 22, 2020 | Sep. 30, 2020 | Sep. 15, 2020 | Aug. 27, 2020 | Apr. 02, 2020 | Dec. 31, 2019 | Feb. 10, 2019 |
Stockholders' Equity (Textual) | |||||||||||||
Common stock shares, issued | 141,812 | 26,475,916 | 141,812 | 4,639,139 | |||||||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||||||||
Common stock issued for consideration of commitment fees | 33,000 | 33,000 | |||||||||||
Fair market value | $ 390 | ||||||||||||
Private Investor [Member] | |||||||||||||
Stockholders' Equity (Textual) | |||||||||||||
Common stock shares, issued | 100,000 | ||||||||||||
Common stock, par value | $ 0.001 | ||||||||||||
warrants to purchase | 99,334 | ||||||||||||
Common Stock at an exercise price | $ 3.25 | ||||||||||||
Series B Preferred Stock [Member] | |||||||||||||
Stockholders' Equity (Textual) | |||||||||||||
Common stock, par value | $ 0.001 | ||||||||||||
Common Stock [Member] | |||||||||||||
Stockholders' Equity (Textual) | |||||||||||||
Common stock shares, issued | 66,334 | 42,819 | |||||||||||
Common stock, par value | $ 0.001 | ||||||||||||
Common stock converted outstanding shares | 10,000,000 | ||||||||||||
Fair market value | $ 459 | ||||||||||||
warrants to purchase | 73,080 | ||||||||||||
Common Stock at an exercise price | $ 3.25 | ||||||||||||
Common Stock [Member] | Employees [Member] | |||||||||||||
Stockholders' Equity (Textual) | |||||||||||||
Common stock shares, issued | 58,334 | ||||||||||||
Fair market value | $ 332 | ||||||||||||
Securities Purchase Agreement [Member] | |||||||||||||
Stockholders' Equity (Textual) | |||||||||||||
Common stock shares, issued | 40,000 | 50,000 | 70,000 | 10,000 | |||||||||
Fair market value | $ 240 | $ 180 | |||||||||||
Dinar Zuz LLC [Member] | |||||||||||||
Stockholders' Equity (Textual) | |||||||||||||
Common stock shares, issued | 100,000 | ||||||||||||
Additional Amount | $ 300 | ||||||||||||
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 1,157,478 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 | 5,000,000 | ||||||||||||
Common stock, par value | $ 0.001 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | |
Due from related parties | |||
Next Cala 360 | [1] | $ 56 | $ 54 |
Total Due from related parties | 56 | 54 | |
Related party payables, net of discounts | |||
Due to Dinar Zuz LLC | [2] | 355 | |
Due to Cima Telecom Inc. | [3] | 413 | |
Due to Next Communications, Inc. (current) | [4] | 12 | 10 |
Total Due from related parties | $ 780 | $ 10 | |
[1] | Next Cala 360, is a Florida corporation established and managed by the Company's Chief Executive Officer. | ||
[2] | Due to the April 6, 2020 180 days 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"). | ||
[3] | 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 (1st) calendar year from the Effective Date, reimbursement of legal fees in the amount of $65 and other software development services. | ||
[4] | Next Communication, Inc. is a corporation in which the Company's Chief Executive Officer a controlling interest and serves as the Chief Executive Officer. See disclosure above regarding payments by the Company in connection with the bankruptcy of Next Communication, Inc. |
Related Party Transactions (D_2
Related Party Transactions (Details Textual) - USD ($) $ in Thousands | Apr. 06, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Related Party Transactions (Textual) | |||
Related Party Transactions, description | On July 24, 2020, the Compensation Committee of the Board of Directors of 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 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 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 (4) 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 eighteen (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 officers 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 their 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. | ||
Loan amount | $ 355 | ||
Dinar Zuz LLC [Member] | |||
Related Party Transactions (Textual) | |||
Loan amount | $ 462 | $ 462 | |
Annual interest rate percentage | 9.00% | ||
Annual fees amount | $ 300 | ||
Reimbursement of legal fees amount | $ 65 | ||
Arik Maimon [Member] | |||
Related Party Transactions (Textual) | |||
Loan amount | $ 50 | ||
Annual interest rate percentage | 9.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | May 01, 2019 | Feb. 12, 2018 | Apr. 17, 2019 | Jan. 29, 2019 | Nov. 07, 2018 | Dec. 20, 2017 |
Commitments and Contingencies (Textual) | ||||||
Legal settlement alleging claim, description | Even though the Company made the agreed payment of $10 on January 2, 2017 and issued 12,002 shares as conversion of the $70 note as agreed in the settlement agreement. | |||||
Reimbursement of attorneys fees and costs | $ 528 | |||||
Claim for related party | $ 473 | |||||
Settlement agreement description | The Company entered into a settlement agreement (the “SVS Settlement Agreement”) with Comdata, Inc. d/b/a Stored Value Solutions (“SVS”) whereby the Company will pay a total of $37 over 7 months, starting July 1, 2019. Only in the event that the Company defaults by failing to make timely payments, SVS may file in Kentucky for the judgment of $70. On February 13, 2020, the Company completed the payments in accordance with the SVS Settlement Agreement and the case was dismissed. | |||||
Commitments and contingencies description | The Demand originated from a Demand for Arbitration that Secure IP received from VoIP Capital International (“VoIP”) in March 2019, demanding $1,053 in damages allegedly caused by unpaid receivables that Limecom assigned to VoIP based on the RCS. On June 5, 2020, Secure IP Telecom, Inc. (“SecureIP”) filed a complaint against Limecom, Inc., (“Limecom”), Heritage Ventures Limited (“Heritage”), an unrelated third party and owner of Limecom, and the Compasny. 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 $1,053. Cuentas is contemplating filing a motion to dismiss the complaint and disputes that it received the alleged $1,053 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 a complaint by J.P. Carey Enterprises, Inc., (“JP Carey”) which was filed in Fulton County, Georgia claiming similar issues as to the previous complaint, with the new claimed damages totaling $1,108. | ||||
IDT Domestic Telecom, Inc [Member] | ||||||
Commitments and Contingencies (Textual) | ||||||
Claim for related party | $ 50 |