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Item 1.01
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Entry into a Material Definitive Agreement.
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On July 21, 2021,
Cuentas Inc. (“Cuentas”) and WaveMAX Corporation (“WaveMax”) entered into
a Definitive Joint-Venture Agreement (the “Agreement”). Pursuant to the Agreement, Cuentas and WaveMax are to form a joint
venture (“JVLLC”) which would install WiFi6 shared network (“WSN”) systems in 1,000 retail locations in
the New York metropolitan tristate area using access points and small cells to provide users with access
to the WSN (the “JV Project”). The WSN will allow the JVLLC to generate location-based advertising configured by advertisers
using WaveMAX’s advertising dashboard technology directly to users over the WSN, or permit users to pay a service fee for ad-free
access to the WSN.
The ownership and management of the JVLLC shall be as
follows: 50% to Cuentas, 25% to WaveMAX and 25% to Consultoria y Asesoria de Redes, S.A. de C.V. (“Execon”). Execon currently
manages approximately 20,000 WiFi endpoints with WaveMax in Mexico.
Each of Cuentas and WaveMAX agrees to fund $120,000
(for a total of $240,000) initially upon execution of the Agreement. In addition, each of Cuentas and WaveMAX has agreed to fund an additional
$127,500 over the succeeding five months, in each case, subject to approval of each party’s board of directors and $500,000 from
revenue in the first year of operation. The expenses of the JV Project shall include acquiring the Access Points hardware, the installation
and configuration of the Access Points hardware for use with the broadband internet service at each Retail Location, entering into the
necessary agreements with the Retail Locations, instore marketing and promotion of the WSN program, and expenses relating to commercialization
of the digital advertising program.
The Board of Directors of the
JVLLC shall initially be comprised of four persons, two designated by Cuentas, one designated by WaveMAX, and one designated by Execon.
The officers of the JVLLC shall be the persons from time to time designated by mutual agreement of Cuentas and WaveMAX, with the initial
officers to be determined.
The 1,000 high traffic, prime location convenience stores
and “bodegas” (small community markets) will be signed up in conjunction with Cuentas’ distribution network that sells
prepaid debit card, e-store, e-wallet and digital services.
A fee of 2% (two percent) of the Net Revenue of the
JVLLC will be paid by the JVLLC on a monthly basis as a commission to Innovateur Management SAPI de CV
WaveMax and Innovateur Management, SAPI de CV will be
included in the Cuentas Share Incentive plan subject to approval by the Cuentas BOD and approval by Cuentas shareholders and Side Letter
Participants at the next scheduled Annual Shareholders meeting.
WaveMAX grants the JVLLC exclusive rights to use and
deploy the WaveMAX Technology, including any and all patents owned or to be owned by WaveMAX and any and all related enhancements or applications
of the WaveMAX Technology and any and all prior and subsequent improvements and/or new technology developed by WaveMAX solely in Cuentas
BODEGAS network throughout the United States.
The parties have agreed to expand the JVLLC to other
areas of the US once the current deployment is in progress or has been completed.
The foregoing summary is qualified in all respects
by the full version of the Definitive Joint-Venture agreement, dated July 21, 2021 a copy of which is attached hereto as Exhibit 10.1,
On July 22, 2021, the Company issued a press
release regarding the signing of the Agreement, a copy of which is attached hereto as Exhibit 99.1.