CUENTAS INC. : Entry into a Material Definitive Agreement, Financial Statements and Exhibits (form 8-K)

Published: 2022-01-11 17:22:13 ET CUEN

Item 1.01 Entry into a Material Definitive Agreement.

On January 5, 2022, Cuentas, Inc. ("Cuentas") signed a Binding Letter of Intent (the "LOI") with Mango Tell LLC ("Mango Tel"), SDI Black 011, LLC ("SDI Black" and, together with Mango Tel, the "Seller") and Sohel Kapadia and Saheda Kapadia (collectively the "Owners"), for the potential acquisition of 100% of the assets of Mango Tel LLC and SDI Black 011("SDI Group") in exchange for $3.2 Million..

The LOI provides that Cuentas will deposit $2 Million into an escrow account while a definitive purchase and sale agreement (the "Agreement") is drafted and negotiated. The parties agree that the LOI is binding on each of them and that they will use their best efforts and good faith to enter into the Agreement with terms and conditions consistent with this Agreement. Pursuant to the Agreement, Cuentas will acquire substantially all of the assets of SDI Black, and Mango Tel which also include the Mango Mobile MVNO, Black Wireless MVNO, Black 011 Long distance platform and operations and the SDI distribution platform and network of over 31,000 bodegas and convenience stores (the "Purchased Assets").

Following the execution of the LOI, the Company shall form a company ("Newco") into which all of the Purchased Assets shall be transferred and, following the closing of the purchase and sale, all of the interests in Newco shall be transferred to the Company.

The Sellers and the Owners have agreed to apply the purchase price paid by the Company to amounts due to the repay U.S. Small Business Administration ("SBA") loans taken by the Sellers and that Owners shall pay an additional $1,000,000 towards repayment of additional SBA loans..

Cuentas has agreed to offer employment agreements to certain Fisk/SDI key employees.

The Seller and the Owners have agreed to indemnify and hold harmless Cuentas from and against any liability for any amount owing to Seller's creditors with respect to the Purchased Assets or the business operation of Seller being transferred to Buyer pursuant to this Agreement, which liability arose prior to the transfer of the Purchased Assets and business operations from Seller to Buyer.

Cuentas agrees to indemnify and hold Seller harmless from and against any liability for any amount owing with respect to the Purchased Assets and business operations of the Seller transferred by Seller to Buyer pursuant to this Agreement, which liability arises subsequent to the transfer of the Purchased Assets and business operations from Seller to Buyer under this Agreement.

Seller has represented that 2021 gross revenues of SDI Black and Mango Tel were at least $9 million. Cuentas will have the right to cancel the LOI if 2021 gross revenues are materially less than $9 million.

Item 9.01. Financial Statements and Exhibits