Financial Analysis

NOTE 10 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 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 the Company. The arbitration demand originated from another 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 or about October 5, 2020, the trial court appointed a receiver over Limecom, Inc. (Limecom) in the matter of Spectrum Intelligence Communications Agency, LLC. v. Limecom, Inc., case no. 2018-027150-CA-01 pending in the 11th Circuit for Miami-Dade County, Florida. On September 5, 2020, Secure IP Telecom, Inc. (Secure IP) filed a complaint against Limecom, Heritage Ventures Limited (Heritage), an unrelated third party and owner of Limecom, and the Company, case no. 20-11972-CA-01. Secure IP alleges that the Company received certain transfers from Limecom during the period that the Company wholly owned Limecom that may be an avoidable under Florida Statute 72 …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 8 STOCK OPTIONS On June 17, 2021 the Board of Directors of the Company approved the Cuentas Inc. 2021 Share Incentive Plan (the 2021 Plan). which was approved by the shareholders during the Annual Shareholders Meeting held on December 15, 2021. The maximum number of shares of stock reserved and available for issuance under the 2021 Plan is 242,308 shares. The purpose of the 2021 Plan is to promote the long-term success of the Company and the creation of stockholder value by encouraging service providers to focus on critical long-range corporate objectives and linking service provides directly to stockholder interest through increase stock ownership. On November 17, 2023, the Board of Directors of the Company approved the 2023 Share Incentive Plan (the 2023 Plan), which was approved by the shareholders during the Annual Shareholders Meeting held on December 20, 2023. The maximum number of shares of stock reserved and available for issuance under the 2023 Plan is 520,000 shares. The purpose of the 2023 Plan is to provide incentives which will attract, retain and motivate highly competent persons as officers, employees and non-employee directors, of, and consultants to, the Company and its subsidiaries and affiliates. The following table presents the Companys stock option activity for employees and directors of the Company for the year ended December 31, 2025 and 2024: Number of Options Weighted Average Exercise Price Outstanding at January 1, 2024 84,999 36.97 Granted 270, …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

NOTE 12 INCOME TAX 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 companys ability to fully utilize its NOLs and tax credits. The Companys 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, 2025 and December 31, 2024. 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, 2025 or December 31, 2024 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 adjustm …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

T. Recently Issued Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to provide enhanced segment disclosures. The standard will require disclosures about significant segment expenses and other segment items and identifying the Chief Operating Decision Maker and how they use the reported segment profitability measures to assess segment performance and allocate resources. These enhanced disclosures are required for all entities on an interim and annual basis, even if they have only a single reportable segment. The standard is effective for years beginning after December 15, 2023 and interim periods within annual periods beginning after December 15, 2024, and early adoption is permitted. The adoption of this ASU did not have a material impact on the Companys consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to provide enhancements to annual income tax disclosures. The standard will require more detailed information in the rate reconciliation table and for income taxes paid, among other enhancements. The standard is effective for years beginning after December 15, 2024, early adoption is permitted. The adoption of this ASU did not have a material impact on the Companys consolidated financial statements. In May 2025, the FASB issued ASU 2025-03, Bus …

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NOTE 7 RELATED PARTY TRANSACTIONS A. Transactions and balances with related parties Year ended December 31 2025 2024 Cost of sales: Cost of sales from Next Communications INC (a company controlled by Arik Maimon, Companys Chairman of the Board and CEO) (a) $ - $ 565 Total sales to related parties $ - $ 565 B. Balances with related parties and officers: As of December 31, As of December 31, 2025 2024 Current assets Accounts receivables - Next Communications INC (a company controlled by Arik Maimon Companys Chairman of the Board and CEO) $ 271 $ 271 Other accounts receivables - Arik Maimon Companys Chairman of the Board and CEO 271 - Michael De Prado former Companys CEO 242 - $ 513 $ - Current Liabilities Notes and Loans payable Arik Maimon Companys Chairman of the Board and CEO (b) 294 - Michael De Prado former Companys CEO (c) 675 - $ 969 $ - (a) On June 26, 2009 the Company and Next Communications INC (Next) entered into Bilateral Wholesale Carrier Agreement according to which the Company and Next will provide and purchase from time to time telecommunications transport services from each other and to other carriers at price determined in the agreement and as may mutually change from time to time. The Agreement shall continue on a month-to-month basis unless either Party notifies the other in writing not less than 30 days prior of its intent to terminate this Agreement. (b) See note 4.F. (c) See note 4.G. …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 11 SEGMENTS OF OPERATIONS The Company reports segment information based on the management approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of the Companys reportable operating segments. The Company manages its business primarily on a product basis. The accounting policies of the various segments are the same as those described in Note 2, Summary of Significant Accounting Policies. The Company evaluates the performance of its reportable operating segments based on net sales and gross profit. A. Revenue by product: Year ended December 31, 2025 2024 Telecommunications - 26 Wholesale telecommunication services - 569 Digital products - 81 - $ 676 B. Gross loss by product: Year ended December 31, 2024 Telecommunications - (44 ) Wholesale telecommunication services - 4 Digital products - (35 ) - (75 ) C. Long lived assets by product: Year ended December 31, 2025 2024 Telecommunications - - Wholesale telecommunication services - - Digital products - - - - For the year ended December 31, 2025 and December 31, 2024, the Companys sales to Next Communications INC were approximately 0% and 84% and to Cuentas SDI LLC approximately 0% and 12% of the Companys total revenue, respectively. All of the Companys sales were generated in the U.S in 2025 and 2024. …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 2 SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (US GAAP). A. 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 fair value of derivative warrants and fair value of stock-based compensation. B. 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. C. Functional currency The functional currency of the company and its subsidiaries is the U.S dollar. D. 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. E. Property, plant and equipment, net 1. Property and equipment are stated …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

NOTE 9 STOCKHOLDERS EQUITY A. In November 2025, the Company entered into a Subscription Agreement with an accredited investor for the issuance and sale of 238,095 shares of the Companys common stock at a purchase price of $0.42 per share. The Company received gross proceeds of $100 on November 19, 2025. These shares were issued. B. On December 30, 2025, the Company entered into a Securities Purchase Agreement (the SPA) with an investor for the purchase of units consisting of the Companys common stock and warrants for a total consideration of $100. As of December 31, 2025, the Company had received the full cash consideration of $100. The shares and warrants associated with this investment were issued and delivered in January 2026. C. On October 30, 2025, the Company issued 697,723 shares to Mr. Arik Maimon see note 4.F. On the same day, the Company issued 366,666 shares to AM Law LLC., see note 4.E. D. On November 19, 2025, the Company issued 355,236 shares of common stock to to certain directors, officers, and other eligible parties in exchange for the settlement of outstanding liabilities owed by the Company to such parties. On November 19, 2025, the Companys Board of Directors approved the conversion of outstanding debt and accrued liabilities owed to certain directors and officers of the Company into shares of common stock. A total of approximately $149 in debt was converted at a conversion price of $0.42 per share, resulting in the issuance of 355,236 shares of the Compan …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 14 SUBSEQUENT EVENT S On January 29, 2026, the Company entered into an Amended and Restated Warrant Agency Agreement (the A/R Warrant Agency Agreement) to that certain Warrant Agency Agreement, dated as of February 1, 2021 between the Company and Olde Monmouth Stock Transfer Co., Inc., as Warrant Agent (the Original Warrant Agreement), pursuant to which the expiration date of the Companys outstanding publicly traded warrants (the Warrants) to purchase shares of the Companys common stock, par value $0.001 per share (the Common Stock), was extended from February 4, 2026 to June 30, 2026 (the Extended Expiration Date). At and after the Extended Expiration Date, the Warrants may no longer be exercised. The A/R Warrant Agreement also allows the Board of Directors of the Company in its discretion to voluntarily reduce the exercise price of the Warrants and proportionately increase the number of shares of Common Stock purchasable upon exercise of the Warrants at the reduced exercise price. Other than as set forth above, the terms of the Warrants set forth in the A/R Warrant Agreement remain unmodified and in full force and effect. The Warrants were issued as part of an underwritten offering of the Companys units in February 2021. Each unit consisted of one share of Common Stock and one Warrant. The exercise price of the Warrants was initially $4.30 per share, but increased to $55.90 as a result of a one for thirteen reverse stock split completed on March 24, 2023. The Company h …

SubsequentEventsTextBlock · excerpt; the full note is in the filing

NOTE 4 STOCK OPTIONS The following table presents the Companys stock option activity for employees and directors of the Company for the three months ended March 31, 2026: Number of Options Weighted Average Exercise Price Outstanding at December 31, 2025 313,227 $ 5.19 Granted - - Exercised - - Forfeited or expired - - Outstanding at March 31, 2026 313,227 $ 5.19 Number of options exercisable at March 31, 2026 313,227 $ 5.19 The aggregate intrinsic value of the awards outstanding as of March 31, 2026 is $0. These amounts represent the total intrinsic value, based on the Companys stock price of $0.25 as of March 31, 2026, less the weighted exercise price. This represents the potential amount received by the option holders had all option holders exercised their options as of that date. The stock options outstanding as of March 31, 2026 have been separated into exercise prices, as follows: Exercise price Stock options outstanding Weighted average remaining contractual life years Stock options exercisable 36.4 42,307 5.66 75,767 0.32 270,920 7.90 270,920 313,227 323,227 …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Recently Adopted Accounting Standards During the three months ended March 31, 2026, the Company was not required to adopt any recently issued accounting standards.

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NOTE 5 RELATED PARTIES Balances with related parties and officers: As of March 31, As of December 31, 2026 2025 Next Communications INC (a company controlled by Arik Maimon Companys Chairman of the Board and CEO) 271 271 Other accounts receivables Arik Maimon Companys Chairman of the Board and CEO 230 271 Michael De Prado former Companys CEO 242 242 472 513 Other accounts receivables Notes payable Arik Maimon Companys Chairman of the Board and CEO 294 294 Michael De Prado former Companys CEO 675 675 969 969 …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 6 SEGMENTS OF OPERATIONS The Company reports segment information based on the management approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of the Companys reportable operating segments. The Company manages its business primarily on a product basis. The accounting policies of the various segments are the same as those described in Note 2, Summary of Significant Accounting Policies. The Company evaluates the performance of its reportable operating segments based on net sales and gross profit. …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION Basis of presentation 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 three-months ended March 31, 2026. However, these results are not necessarily indicative of results for any other interim period or for the year ended December 31, 2026. 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 info …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing