Replies to post #106975 on Cuentas Inc (CUEN)

[Arthur]

Did you notice that Limecomm's Acoounts Receivable were being factored out ?
That's generally a red flag.

Note 3 – Accounts Receivable Factoring
The Company executed a factoring and security agreement with a financial institution on September 15, 2016, whereby the Company sells certain of its accounts receivable in exchange for cash. These factoring transactions qualify for sales treatment in accordance with FASB ASC 860, Transfers and Servicing . Upon purchase of the accounts receivable, the Company shall be deemed to have sold, transferred, assigned, set over and conveyed to the financial institution, without recourse except as expressly stated in the agreement, all of the Company’s right, title and interest in and to the purchased accounts receivable. Purchases have an initial gross liquidation advance rate of 90%, up to a maximum cumulative outstanding face amount of $2,000,000. The initial discount fee is 1.15%, and an additional 0.3835% of certain receivables. As of December 31, 2016, the total outstanding factored receivables amounted to approximately $790,000. The fees charged with for these factoring transactions were not material for the year ended December 31,2016.

The Company has a credit insurance policy covering all factored accounts receivable, under which the financial institution is the beneficiary on the policy if default were to occur.

On June 22, 2017, the Company replaced its existing factoring arrangement with a different financial institution. This new factoring arrangement has similar terms and is for one year, with automatic one year renewals.

https://backend.otcmarkets.com/otcapi/company/sec-filings/12339915/content/html