Bubblr Inc 10-Q for FY2022 Q3
Bubblr Inc. (BBLR)
About this 10-Q
Bubblr Inc filed this 10-Q on November 9, 2022, covering the quarter ended September 30, 2022 (FY2022 Q3).
Headline figures
Quarter ended September 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $606.44K
- compared with a net loss of $716.38K a year earlier
- Diluted EPS
- $0.00
- compared with -$0.01 a year earlier
25
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
| Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended
| Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from __________ to__________
Commission File Number:
(Exact name of registrant as specified in its charter)
| oming | ||
| (State or other jurisdiction
of incorporation or organization) |
(IRS Employer Identification No.) |
(Address of principal executive offices)
(Registrant’s telephone number)
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[X]
Indicate by check mark whether the registrant has
submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of
this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller reporting company
| ||
| Emerging growth company
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is
a shell company (as defined in Rule 12b-2 of the Exchange Act). [ ] Yes [X]
Securities registered pursuant to Section 12(b) of the Act: None
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: common shares as of November 9, 2022
TABLE OF CONTENTS
| Page | ||
| PART I – FINANCIAL INFORMATION | ||
| Item 1: | Financial Statements | 3 |
| Item 2: | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 4 |
| Item 3: | Quantitative and Qualitative Disclosures About Market Risk | 16 |
| Item 4: | Controls and Procedures | 16 |
| PART II – OTHER INFORMATION | ||
| Item 1: | Legal Proceedings | 18 |
| Item 1A: | Risk Factors | 18 |
| Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds | 18 |
| Item 3: | Defaults Upon Senior Securities | 18 |
| Item 4: | Mine Safety Disclosures | 18 |
| Item 5: | Other Information | 18 |
| Item 6: | Exhibits | 19 |
| 2 |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Our consolidated financial statements included in this Form 10-Q are as follows:
| F-1 | Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 (unaudited); | |
| F-2 | Consolidated Statements of Operations and Comprehensive Loss for the for the three and nine months ended September 30, 2022 and 2021 (unaudited); | |
| F-3 | Consolidated Statement of Stockholders’ Deficit for the nine months ended September 30, 2022 and 2021 (unaudited); | |
| F-4 | Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021 (unaudited); and | |
| F-5 | Notes to the Unaudited Consolidated Financial Statements. |
These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended September 30, 2022 are not necessarily indicative of the results that can be expected for the full year.
| 3 |
| BUBBLR, INC. |
| Consolidated Balance Sheets |
September 30, 2022 and December 31, 2021 (Unaudited) |
| September 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Advances receivable | ||||||||
| Total current assets | ||||||||
| Non-current Assets: | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Total non-current assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Dividends payable | ||||||||
| Accrued interest | ||||||||
| Convertible
note payable - net of discount of $ | ||||||||
| Loan payable, current portion | ||||||||
| Loan payable - related party | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities: | ||||||||
| Convertible note payable - net of discount
of $ | ||||||||
| Loan payable, non-current portion | ||||||||
| Loan payable – related party, non-current portion | ||||||||
| Warrant derivative liability | ||||||||
| Total non-current liabilities | ||||||||
| Total Liabilities | ||||||||
| Stockholders' Deficit | ||||||||
| Preferred Stock, $0.001 par value, shares authorized | ||||||||
| Special 2019 Series A Preferred Stock, par value, share authorized; and shares issued and outstanding at September 30 2022 and December 31, 2021 | ||||||||
| Series C Convertible Preferred Stock, par value, authorized, and shares issued and outstanding at September 30, 2022 and December 31, 2021 | ||||||||
| Common stock, par value, shares authorized; and shares issued and outstanding at September 30, 2022 and December 31, 2021 | ||||||||
| Additional paid-in capital | ||||||||
| Deferred stock compensation | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ||||||||
| Total Stockholders' Deficit | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-1 |
| BUBBLR, INC. |
| Consolidated Statements of Operations and Comprehensive Loss |
For the three and nine months ended September 30, 2022 and 2021 (Unaudited) |
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Operating Expenses | ||||||||||||||||
| General and administrative | $ | $ | $ | $ | ||||||||||||
| Professional fees | ||||||||||||||||
| Market and regulation costs | ||||||||||||||||
| Compensation | ||||||||||||||||
| Amortization and depreciation | ||||||||||||||||
| Research and development | ||||||||||||||||
| Total operating expense | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Interest income | ||||||||||||||||
| Gain on debt settlement | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gain on change in fair value of warrant derivative liability | ||||||||||||||||
| Foreign currency transaction loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss before income tax | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Provision for income tax | ||||||||||||||||
| Net loss after income tax | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other comprehensive income (loss) | ||||||||||||||||
| Foreign currency translation gain | ||||||||||||||||
| Total other comprehensive income (loss) | ||||||||||||||||
| Net comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per common share, basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average number of common shares outstanding, basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-2 |
BUBBLR, INC.
Consolidated Statement of Changes in Stockholders’ Deficit
For the nine months ended September 30, 2022 and 2021
(Unaudited)
| 2019
Series A Preferred Stock | Series
B Preferred Stock | Series
C Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | Amount | Number of Shares | Amount | Number of Shares | Amount | Number of Shares | Amount | Additional
Paid-in Capital | Deferred Stock Compensation | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Stockholders' Equity (Deficit) | ||||||||||||||||||||||||||||||||||||||||||
| Balance - December 31, 2020 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||||||||||
| Conversion of Preferred B shares conversion to common shares | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of Special 2019 Series A Preferred Stock from Treasury to related party in satisfaction of debt | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common shares for Services - Advisory Board | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common shares for Services - Consultancy | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance -March 31, 2021 | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Issuance of common shares for Services - Advisory Board | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common shares for debt conversion | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance -June 30, 2021 | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance -September 30, 2021 | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Balance - December 31, 2021 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| Issuance of common shares for Services - Executive Board | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common shares for Services - Consulting | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common shares for Equity Finance Agreement Incentive | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of Series C Preferred Shares | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividend Series C Preferred shares | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance -March 31, 2022 | $ | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Issuance of common shares for Services - Consulting | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common shares as deferred compensation | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vesting of common shares issued as deferred compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issue of Series C Preferred shares | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividend Series C Preferred Shares | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance -June 30, 2022 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Issuance of common shares for Services - Consulting | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common shares for loan waiver | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vesting of common shares issued as deferred compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividend Series C Preferred Shares | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase and cancellation of Special 2019 Series A Preferred Stock via issuance of related party note payable | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance -September 30, 2022 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-3 |
BUBBLR, INC.
Consolidated Statements of Cashflows
For the nine months ended September 30, 2022 and 2021
(Unaudited)
| September 30, | ||||||||
| 2022 | 2021 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments for: | ||||||||
| Net loss to net cash used in operating activities: | ||||||||
| Stock based compensation | ||||||||
| Vesting of deferred stock based compensation | ||||||||
| Stock based finance incentive | ||||||||
| Gain on settlement of debt | ( | ) | ||||||
| Gain on change in fair value of warrant derivative liability | ( | ) | ||||||
| Amortization of debt discount | ||||||||
| Amortization of intangible asset | ||||||||
| Depreciation | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Increase (decrease) in accounts receivable | ( | ) | ||||||
| Increase (decrease) in accrued interest | ( | ) | ||||||
| Decrease in accounts payable | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of fixed assets | ( | ) | ||||||
| Proceeds from repayment of advances receivable | ||||||||
| Purchase of intangible assets | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Payment of dividends | ( | ) | ||||||
| Proceeds from loans payable | ||||||||
| Repayment of loans payable | ( | ) | ( | ) | ||||
| Repayment of loans payable - related party | ( | ) | ( | ) | ||||
| Proceeds from loans payable - related party | ||||||||
| Net proceeds from issuance of Series C Preferred Stock and associated warrants | ||||||||
| Proceeds from issuance of convertible notes payable | ||||||||
| Net cash provided by financing activities | ||||||||
| Effects of exchange rate changes on cash | ||||||||
| Net Change in Cash | ||||||||
| Cash - Beginning of Period | ||||||||
| Cash - End of Period | $ | $ | ||||||
| Supplemental information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | $ | $ | ||||||
| Non-cash investing and financing activities | ||||||||
| Original issue discount on convertible notes | $ | $ | ||||||
| Common stock issued for conversion of debt | $ | $ | ||||||
| Special 2019 Series A Preferred Stock issued to/from Treasury to related party in increase/satisfaction of debt | $ | $ | ||||||
| Common stock issued to related party for conversion of Series B Preferred Stock | $ | $ | ||||||
| Warrant liability | $ | $ | ||||||
| Declared dividends | $ | $ | ||||||
| Repurchase and cancellation of Special 2019 Series A Preferred Stock via issuance of related party note payable | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-4 |
BUBBLR, INC.
Notes to the Unaudited Consolidated Financial Statements
Nine Months Ended September 30, 2022 and 2021
NOTE 1 - ORGANIZATION, BUSINESS AND LIQUIDITY
Organization and Operations
On March
26, 2020 Bubblr Holdings Ltd. (a UK company formed on February 18, 2016) merged into U.S. Wireless Online, Inc. (“UWRL”),
a Wyoming corporation formed on
Bubblr, Inc. is an application software company that is currently developing its disruptive Ethical Web platform This WEB.Ɛ platform will provide a holistic view of progress in the development of digital products, services and teams — designed to inform our ability to use our in-house and code and that of our partners, lead advances in development criteria, and respond quickly to shifts in trends and applications.
Going Concern Matters
The accompanying
consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States
of America (“GAAP”), which contemplates the Company’s continuation as a going concern. The Company incurred a net comprehensive
loss of $
Management intends to raise additional operating funds through equity and/or debt offerings. However, there can be no assurance management will be successful in its endeavors. See Note 13 – Subsequent Events.
There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support its working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available to the Company, it may be required to curtail or cease its operations.
Due to uncertainties related to these matters, there exists a substantial doubt about the ability of the Company to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.
COVID-19
A novel strain of coronavirus (COVID-19) was first identified in December 2019, and subsequently declared a global pandemic by the World Health Organization on March 11, 2020. As a result of the outbreak, many companies have experienced disruptions in their operations and in markets served. The Company instituted some temporary precautionary measures intended to help ensure the well-being of its employees and minimize business disruption. The Company considered the impact of COVID-19 on the assumptions and estimates used and determined that there were no material adverse impacts on the Company’s results of operations and financial position as of at September 30, 2022.
Most of the restrictions imposed by governments worldwide have now been relaxed. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities at the date of issuance of these financial statements. These estimates may change, as new events occur, and additional information is obtained.
| F-5 |
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated interim financial statements have been prepared in accordance with GAAP. The Company’s fiscal year-end is December 31.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries: Bubblr Holdings Ltd., Bubblr Ltd., and Bubblr CLN Ltd. All significant inter-company balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates.
Convertible Financial Instruments
The Company bifurcates conversion options from their host instruments and accounts for them as free-standing derivative financial instruments if certain criteria are met. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not remeasured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company uses the Black Scholes Options Pricing Model to estimate the value of its derivative liabilities and remeasures them at each reporting period.
Fair Value of Financial Instruments
The Company accounts for financial instruments in accordance with ASC 820, “Fair Value Measurements and Disclosures.” ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below:
Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2 – Quoted prices in non-active markets or in active markets for similar assets or liabilities, observable inputs other than quoted prices, and inputs that are not directly observable but are corroborated by observable market data;
Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
The carrying
value of the Company’s current assets and liabilities are deemed to be their fair value due to the short-term maturity and realization.
During the nine months ended September 30, 2022, the Company acquired warrant derivative liabilities, which are Level 3 financial instruments
that are adjusted to fair market value on reporting dates. At September 30, 2022, the warrant liabilities balance was $
| F-6 |
The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation–Stock Compensation, which prescribes accounting and reporting standards for all share-based payment transactions in which employee and non-employee services are acquired. Share-based payments to employees and non-employees, including grants of stock options, are recognized as compensation expense in the financial statements based on the stock awards’ fair values on the grant date. That expense is recognized over the period required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).
Common Stock Purchase Warrants and Derivative Financial Instruments
Common stock purchase warrants and other derivative financial instruments are classified as equity if the contracts (1) require physical settlement or net-share settlement, or (2) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). Contracts which (1) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (2) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (3) that contain reset provisions that do not qualify for the scope exception are classified as liabilities. The Company assesses classification of its common stock purchase warrants and other derivatives at each reporting date to determine whether a change in classification between equity and liabilities is required.
Pursuant to ASC 260, “Earnings Per Share,” basic net income and net loss per share are computed by dividing the net income and net loss by the weighted average number of common shares outstanding. Diluted net income and net loss per share is the same as basic net income and net loss per share when their inclusion would have an anti-dilutive effect due to our continuing net losses.
For the three and nine months ended September 30, 2022 and 2021, the following outstanding stock was excluded from the computation of diluted net loss per share as the result of the computation was anti-dilutive.
| September 30, | ||||||||
| 2022 | 2021 | |||||||
| (Shares) | (Shares) | |||||||
| Series C Preferred Stock | 3,384,135 | — | ||||||
| Warrants | 2,358,101 | — | ||||||
| Convertible Notes | 2,037,834 | 1,845,836 | ||||||
| Total | 7,780,070 | 1,845,836 | ||||||
Beneficial Conversion Feature
In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt—Debt with “Conversion and Other Options” and ASC subtopic 815-40 “Hedging—Contracts in Entity’s Own Equity.” The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting; and, (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company early-adopted the new guidance on January 1, 2021. As the result of the adoption of this ASU, no beneficial conversion feature was recorded on convertible notes described in Note 7 – Convertible Notes Payable.
| F-7 |
Foreign Currency Translations
The functional currency of the Company’s international subsidiaries is generally their local currency of Great British pounds (GBP). Local currency assets and liabilities are translated at the rates of exchange on the balance sheet date, and local currency revenues and expenses are translated at weighted average rates of exchange during the period. Equity accounts are translated at historical rates. The resulting translation adjustments are recorded directly into accumulated other comprehensive income.
| September 30, | December 31, | ||||||||
| 2022 | 2021 | 2021 | |||||||
| Period-end GBP£:US$ exchange rate | |||||||||
| Three and nine-month average GBP£:US$ exchange rate | |||||||||
Aggregate transaction gains or losses, including
gains or losses related to foreign-denominated cash and cash equivalents and the re-measurement of certain inter-company balances, are
included in the statement of operations as other income and expense. Losses on foreign exchange transactions totaling $
Income Taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
As of September 30, 2022 and December 31, 2021, the Company did not have any amounts recorded pertaining to uncertain tax positions.
UK Taxes
We do not consider ourselves to be engaged in a trade or business in the UK and, as such, do not expect to be subject to UK corporate income taxation. We have subsidiaries based in the UK that are subject to the tax laws of that country. Under current law, those subsidiaries are taxed at the applicable corporate income tax rates. Should any UK subsidiaries be deemed to undertake business activities in the US, they would be subject to US corporate income tax in respect of their US activities only. Relief would then be available against the UK tax liabilities in respect of the overseas taxes arising from US activities. At present, this is not applicable as our UK subsidiaries only undertake activities in the UK. Our UK subsidiaries file separate UK income tax returns.
UK Tax Risk
Companies which are incorporated outside the UK may become subject to UK taxes in a number of circumstances, including circumstances in which (1) they are deemed resident in the UK for tax purposes by reason of their central management and control being exercised from the UK or (2) they are treated as carrying on a trade, investing or carrying on any other business activity in the UK, whether or not through a UK Permanent Establishment (“PE”).
In addition, the Finance Act 2015 introduced a new tax known as the diverted profits tax (“DPT”) which is charged at 25% of any “taxable diverted profits.” The DPT has had effect since April 1, 2015 and may apply in circumstances including: (1) where arrangements are designed to ensure that a non-UK resident company does not carry on a trade in the UK through a PE; and (2) where a tax reduction is obtained through the involvement of entities or transactions lacking economic substance. We intend to operate in such a manner that none of our companies should be subject to the UK DPT and that none of our companies (other than those companies incorporated in the UK) should: (1) be treated as resident in the UK for tax purposes; (2) carry on a trade, invest or carry on any other business activity in the UK (whether or not through a UK PE).
| F-8 |
However, this result is based on certain legal and factual determinations, and since the scope and the basis upon which the DPT will be applied by HM Revenue & Customs (“HMRC”) in the UK remains uncertain and since applicable law and regulations do not conclusively define the activities that constitute conducting a trade, investment or business activity in the UK (whether or not through a UK PE), and since we cannot exclude the possibility that there will be a change in law that adversely affects the analysis, HMRC might successfully assert a contrary position. The terms of an income tax treaty between the UK and the home country of the relevant Bubblr subsidiary, if any, could contain additional protections against UK tax.
Any arrangements between UK-resident entities of Bubblr and other entities of Bubblr are subject to the UK transfer pricing regime. Consequently, if any agreement between a UK resident entity of Bubblr and any other Bubblr entity (whether that entity is resident in or outside of the UK) is found not to be on arm’s length terms and as a result a UK tax advantage is being obtained, an adjustment will be required to compute UK taxable profits as if such an agreement were on arm’s length terms. Any transfer pricing adjustment could adversely impact the tax charge incurred by the relevant UK resident entities of Bubblr.
Recent Accounting Pronouncements
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial statements.
NOTE 3 – ACCOUNTS RECEIVABLE
As of September 30, 2022 and December 31, 2021, accounts receivable consisted of the following:
| September 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| Deposit | $ | $ | ||||||
| UK VAT Receivable | ||||||||
| Prepayments | ||||||||
| Accounts receivable | $ | $ | ||||||
Any nominal change in the deposit value is due to exchange rate fluctuation.
NOTE 4 – ADVANCES RECEIVABLE
As of September 30, 2022 and December 31, 2021, cash advances consisted of the following:
| September 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| Advance principal receivable -G | $ | $ | ||||||
| Advance principal receivable -J | ||||||||
| Repayment received | ( | ) | ||||||
| Interest due | ||||||||
| Total advances receivable | $ | $ | ||||||
The advance labelled Advance principal receivable-G
carries an interest rate of
Any difference on the Advance principal is due to currency translation.
| F-9 |
NOTE 5 - PROPERTY AND EQUIPMENT
As of September 30, 2022 and December 31, 2021, property and equipment consisted of the following:
| Motor Vehicles | Computer Equipment | Office Equipment | Total | |||||||||||||
| Cost | ||||||||||||||||
| At December 31, 2021 | $ | $ | $ | $ | ||||||||||||
| Additions | ||||||||||||||||
| Effects of currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| At September 30, 2022 | $ | $ | $ | $ | ||||||||||||
| Less accumulated depreciation | ||||||||||||||||
| At December 31, 2021 | $ | $ | $ | $ | ||||||||||||
| Depreciation expense | ||||||||||||||||
| Effects of currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| At September 30, 2022 | $ | $ | $ | $ | ||||||||||||
| Net book value | ||||||||||||||||
| At September 30, 2022 | $ | $ | $ | $ | ||||||||||||
| At December 31, 2021 | $ | $ | $ | $ | ||||||||||||
During the nine months ended September 30, 2022 and
2021, the Company recorded purchases of $
NOTE 6 - INTANGIBLE ASSETS
Patents
A Patent on the Internet-Search Mechanism (“IBSM”) has been granted in the United States, South Africa, Canada, and New Zealand. A Notice of Approval has also been issued for Australia. The patent is currently pending in the European Union and the United Kingdom.
Patents are reported at cost, less accumulated
amortization and accumulated impairment loss. Costs includes expenditure that is directly attributable to the acquisition of the asset.
Once a patent is providing economic benefit to the Company, amortization is provided on a straight-line basis on all patents over their
expected useful lives of
Intellectual Property
Intellectual Property capitalizes costs of
the Company’s qualifying internal research and developments. Intellectual property is amortized over its useful life of
Trademarks
The Company has several trademarks throughout the United States, Europe, and the United Kingdom.
| F-10 |
The Company capitalizes trademark costs where the likelihood of acceptance is expected. Each trademark has been determined to have an infinite useful life and is assessed each reporting period for impairment. If there has been a reduction in the value of the trademark or if the trademark is not successfully registered, the asset will be impaired and charged to expense in the period of impairment.
As of September 30, 2022 and December 31, 2021, trademarks consisted of the following:
| September 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| Trademarks: | ||||||||
| NewzMineTM | $ | $ | ||||||
| Citizens Journalist™ | ||||||||
| Effects of currency translation | ( | ) | ||||||
| $ | $ | |||||||
As of September 30, 2022 and December 31, 2021, intangible assets consisted of the following:
| Cost | Patents | Trademarks | Intellectual Property | Capitalized Acquisition Costs | Total | |||||||||||||||
| At December 31, 2021 | $ | $ | $ | $ | $ | |||||||||||||||
| Additions | ||||||||||||||||||||
| Effects of currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| At September 30, 2022 | $ | $ | $ | $ | $ | |||||||||||||||
| Less accumulated amortization | ||||||||||||||||||||
| At December 31, 2021 | $ | $ | $ | $ | $ | |||||||||||||||
| Amortization expense | ||||||||||||||||||||
| Effects of currency translation | ( | ) | ( | ) | ||||||||||||||||
| At September 30, 2022 | $ | $ | $ | $ | $ | |||||||||||||||
| Net book value | ||||||||||||||||||||
| At September 30, 2022 | $ | $ | $ | $ | $ | |||||||||||||||
| At December 31, 2021 | $ | $ | $ | $ | $ | |||||||||||||||
During the nine months ended September 30, 2022 and
2021, the Company purchased $
| Nine months ended September 30, | Patents | Intellectual Property | Capitalized Acquisition Costs | Total | |||||||||||||
| 3 months remaining 2022 | $ | $ | $ | $ | |||||||||||||
| 2023 | |||||||||||||||||
| 2024 | |||||||||||||||||
| 2025 | |||||||||||||||||
| 2026 | |||||||||||||||||
| Thereafter | |||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||
| F-11 |
NOTE 7 - CONVERTIBLE NOTES PAYABLE
In
January 2021 the Company commenced an offering for a convertible promissory note. The offering closed June 30, 2021. Funds raised during
the six months ended June 30, 2021 was $
Interest accrual and debt discount amortization commenced July 1, 2021 upon the closing of the convertible promissory note offering.
In November 2021 the Company commenced an offering
for a convertible promissory note. The offering closed November 30, 2021. Funds raised as of November 30, 2021 totaled $
Interest accrual commenced December 1, 2021 upon the closing of the convertible promissory note offering.
In September 2022 the note holders of the convertible promissory note issued June 30, 2021 and November 30, 2021 passed, by a majority to an amendment of Section 6 of the Notes.
Section 6 of each of the Notes is hereby amended and restated in its entirety as follows:
| F-12 |
At September 30, 2022 and December 31, 2021, convertible notes consisted of the following
| September 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| Promissory notes - issued in fiscal year 2021 | $ | $ | ||||||
| Total convertible notes payable | ||||||||
| Less: unamortized debt discount | ( | ) | ( | ) | ||||
| Less: current portion of convertible notes | ||||||||
| Long-term convertible notes | $ | $ | ||||||
During
the nine months ended September 30, 2022 and 2021, the Company recorded $
NOTE 8 – LOAN PAYABLE
On February 4, 2022 the Company issued a promissory
note for the principal sum of $
The Company has purchased a vehicle under a capital
finance arrangement. The term of this loan is
At September 30, 2022, future minimum payments under the loan, are as follows:
| Total | ||||
| 2022 (three months remaining in 2022) | $ | |||
| 2023 | ||||
| 2024 | ||||
| Thereafter | ||||
| Less: Imputed interest | ( | ) | ||
| Loan payable | ||||
| Loan payable – current | ||||
| Loan payable - non-current | $ | |||
| F-13 |
NOTE 9 - RELATED PARTY TRANSACTIONS
Loans from Related Parties
The Company has a loan from our founder, Stephen
Morris, with a balance of $
On September 6, 2022, the Company entered into a second amendment (the “Amendment”) with Bubblr Limited and Mr. Morris to add £52,088 ($60,000) to the principal of the loan in exchange for Mr. Morris cancelling his Special 2019 Series A Preferred Stock, which has super voting rights.
On September 7, 2022, our wholly owned subsidiary, Bubblr Limited, entered into a new loan agreement (the “Loan Agreement”) with Mr. Morris for £434,060. The Loan Agreement is unsecured, carries no interest, is non-convertible and is due upon maturity, which is 3 years after the date of the agreement. As of September 30, 2022 £413,889 ($478,488) had been received. The balance of £20,200 ($22,561) was received October 1, 2022.
The Company received $
| Nine Months Ended September 30, | Year Ended December 31, | |||||||
| 2022 | 2021 | |||||||
| Beginning balance | $ | $ | ||||||
| Effects of currency translation | ( | ) | ( | ) | ||||
| Loan Payable | ||||||||
| Conversions from (into) preferred stock | ( | ) | ||||||
| Balance – current | $ | 411,789 | $ | 428,177 | ||||
| Add: additions – non-current | $ | 478,488 | $ | — | ||||
| Effects of currency translation | (16,133 | ) | — | |||||
| Balance – non-current | $ | 462,355 | $ | — | ||||
| Ending balance | $ | $ | ||||||
At December 31, 2020, the Company had loans from two minority shareholders totalling . During the fourth quarter of 2021, the Company received an additional loan from one of these minority shareholders totalling . The loan is non-interest bearing and due for repayment on February 28, 2022. Agreement was reached to extend repayment of the loan to April 30, 2022, with no penalties. All outstanding amounts were paid by this date. On February 15, 2022 the Company received a loan from a minority shareholder for . The loan bears interest at a rate of 20% and is due for repayment before February 15, 2023. During the nine months ended September 30, 2022 and 2021, the Company received proceeds on these loans of and , respectively, made repayments of and , respectively, accrued interest of and , respectively. Activity on this loan to arrive at the September 30, 2022 and December 31, 2021 balances is as follows:
| Nine Months Ended September 30, | Year Ended December 31, | |||||||
| 2022 | 2021 | |||||||
| Beginning balance | $ | $ | ||||||
| Effects of currency translation | ( | ) | ||||||
| Loan Payable | ||||||||
| Add: additions | ||||||||
| Less: repayments | ( | ) | ( | ) | ||||
| Ending balance | $ | $ | ||||||
| F-14 |
NOTE 10 - WARRANT LIABILITY
The Company analyzed the warrants issued in connection with the Series C Convertible Preferred Stock (see Note 11) for derivative accounting consideration under ASC 815, Derivatives and Hedging, and determined that the instrument should be classified as a liability due to reset provisions and variability in exercise price resulting in there being no fixed value or explicit limit to the number of shares to be delivered upon exercise.
ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.
The Company determined our warrant liabilities to be a Level 3 fair value measurement during the year based on management’s estimate of the expected future cash flows required to settle the liabilities and used the Black Scholes pricing model to calculate the fair value as of September 30, 2022. The Black Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each warrant is estimated using the Black Scholes valuation model.
For the period ended September 30, 2022, the estimated fair values of the warrant liabilities measured on a recurring basis are as follows:
| Nine Months Ended | |||
| September 30, | |||
| 2022 | |||
| Expected term | - years | ||
| Expected average volatility | - | ||
| Expected dividend yield | |||
| Risk-free interest rate | – | ||
The following table summarizes the changes in the warrant liabilities during the period ended September 30, 2022:
| Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||
| Warrant liability as of December 31, 2021 | $ | |||
| Addition of new warrant liabilities | ||||
| Day-one loss | ||||
| Change in fair value of warrant liability | ( | ) | ||
| Warrant liability as of March 31, 2022 | $ | |||
| Addition of new warrant liabilities | ||||
| Day-one gain | ( | ) | ||
| Change in fair value of warrant Liability | ( | ) | ||
| Warrant liability as of June 30, 2022 | $ | |||
| Change in fair value of warrant Liability | ( | ) | ||
| Warrant liability as of September 30, 2022 | $ | |||
| F-15 |
NOTE 11 - STOCKHOLDERS’ EQUITY
Preferred Stock
The Company has authorized preferred shares with a par value of per share. The Board of Directors is authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes.
Special 2019 Series A Preferred Stock
The Company has designated one () share of Series A Preferred Stock, par value .
On September 6, 2022, the Company repurchased and cancelled the Special 2019 Series A Preferred Stock held by Mr. Morris via the issuance of related party note payable (Note 9 Related Party Transactions).
As of September 30, 2022 and December 31, 2021, the Company had and share, respectively, of 2019 Series A Preferred stock issued and outstanding.
Series B Preferred Stock
At September 30, 2022 and December 31, 2021, the Company had designated and shares of Series B Preferred Stock, par value . On March 31, 2021 the Company amended and restates its Articles of Incorporation and in doing so, retired the Series B Preferred Stock.
Prior to the retirement of the Series B Preferred Stock, the following designations were in effect:
During 2021, the Company converted the shares of Series B Preferred to shares of common stock valued at $
As of September 30, 2022 and December 31, 2021, the Company had shares of Series B preferred stock issued and outstanding.
| F-16 |
Series C Convertible Preferred Stock
On March 4,
2022, the Company filed a Certificate of Designation with the Wyoming Secretary of State, which established shares of the Company’s Series C Convertible Preferred Stock, Stated Value $
As of September 30, 2022 the Company recorded the following transaction in respect of the dividend due on its Series C Convertible Preferred Stock
| Dividend liability as of December 31, 2021 | $ | |||
| Dividend declared | ||||
| Dividend liability as of March 31, 2022 | $ | |||
| Dividend paid | ( | ) | ||
| Dividend declared | ||||
| Dividend liability as of June 30, 2022 | $ | |||
| Dividend paid | ( | ) | ||
| Dividend declared | ||||
| Dividend liability as of September 30, 2022 | $ |
The Company has the right to redeem the Series C Convertible Preferred Stock, in accordance with the following schedule:
| • | ||
| • | ||
| • | The
Company shall pay a dividend of |
The Series C Convertible Preferred Stock will vote together with the common stock on an as-converted basis subject to the Beneficial Ownership Limitations (as set forth in the Certificate of Designation).
On March 4,
2022, the Company entered into a Securities Purchase Agreement (the “GHS Securities Purchase Agreement”) with GHS Investments,
LLC (“GHS”), whereby GHS agreed to purchase, in tranches, up to $
On March 4,
2022, the Company issued to GHS the first tranche of shares of Series C Convertible Preferred Stock, as well as commitment shares of shares of Series C Convertible Preferred Stock and warrant shares (the “GHS Warrant”). Warrant shares represent
| F-17 |
GHS delivered gross proceeds
of $
On March 9, 2022, the Company entered a Securities Purchase Agreement with Proactive Capital Partners LP (“Proactive”), whereby Proactive agreed to purchase shares of Series C Preferred Stock.
The Company
agreed to issue Proactive commitment shares of shares of Series C Convertible Preferred Stock and warrant shares (the “Warrant”). Warrant shares represent
On
March 9, 2022, the Company issued shares of Series C Convertible Preferred stock to Proactive Capital Partners LP as per the
Securities Purchase Agreement. Proactive delivered gross proceeds of $
On April 24, 2022 the Company
issued the second tranche of shares of Series C Convertible Preferred Stock and warrant shares as per its Securities Purchase Agreement (the “GHS Securities Purchase
Agreement”) with GHS Investments, LLC (“GHS”), of March 4, 2022. GHS delivered gross proceeds of $
On May 25, 2022 the Company
issued the third tranche of shares of Series C Convertible Preferred Stock and warrant shares as per its Securities Purchase Agreement (the “GHS Securities Purchase
Agreement”) with GHS Investments, LLC (“GHS”), of March 4, 2022. GHS delivered gross proceeds of $
On June 24, 2022 the Company
issued the fourth tranche of shares of Series C Convertible Preferred Stock and warrant shares as per its Securities Purchase Agreement (the “GHS Securities Purchase
Agreement”) with GHS Investments, LLC (“GHS”), of March 4, 2022. GHS delivered gross proceeds of $
On September 7, 2022, our wholly owned subsidiary, Bubblr Limited, entered into a new loan agreement (the “Loan Agreement”) with Mr. Morris for £434,060 ($500,000). In order to enter into the new loan, GHS Investments, LLC agreed to waive a prohibition on borrowing over $200,000 found in our Certificate of Designation for the Series C Preferred Stock, in exchange for our company issuing 281,000 shares of common stock to GHS and 64,220 shares of common stock to Proactive.
As a result of the above transactions, the Company
received total net proceeds of $
Common Stock
The Company has authorized common shares with a par value of per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.
During the nine months ended September 30, 2022 and 2021, the Company issued common shares as follows:
Nine months ended September, 2021
| • | shares for
Advisory Board services valued at $ |
| • | shares for
Investor Relations services valued at $ |
| • | shares for conversion of B preferred shares in satisfaction of related party debt of |
| • |
| F-18 |
Nine months ended September 30, 2022
| • | shares for the 2022 Incentive Scheme award (see Note 11- Equity Incentive Plan) deferred compensation valued at . | |
| • | shares for
Executive Board Chair services valued at $ | |
| • | shares for
Investor Relations and Consulting services valued at $ | |
| • | shares as commitment shares under the Equity Financing Agreement valued at | |
| • | shares as
compensation for loan waiver under Series C Preferred Stock share purchase agreement valued
at $ |
As at September 30, 2022 and December 31, 2021, the Company had and shares, respectively, of common stock issued and outstanding.
Warrants
The Company identified conversion features embedded within warrants issued during the period ended September 30, 2022. The Company has determined that the conversion feature of the Warrants represents an embedded derivative since the conversion price includes a reset provision which could cause adjustments in redemption value and number of shares issued upon exercise (see Note 10 Warrant Liability).
A summary of activity during the period ended September 30, 2022 follows:
| Warrants Outstanding | Weighted Average | ||||||||||||
| Number of | Weighted Average | Remaining life | |||||||||||
| Warrants | Exercise Price | (years) | |||||||||||
| Outstanding, December 31, 2021 | $ | ||||||||||||
| Granted | |||||||||||||
| Exercised | |||||||||||||
| Forfeited/canceled | |||||||||||||
| Outstanding, September 30, 2022 | $ | ||||||||||||
| Exercisable Warrants, September 30, 2022 | $ | ||||||||||||
The following table summarizes information relating to outstanding and exercisable warrants as of September 30, 2022:
| Warrants Outstanding | Warrants Exercisable | |||||||||||||||||
| Number of Warrants | Weighted
Average Remaining Contractual life (in years) | Weighted Average Exercise Price | Number of Shares | Weighted Average Exercise Price | ||||||||||||||
| $ | $ | |||||||||||||||||
| $ | $ | |||||||||||||||||
As at September 30, 2022 the intrinsic value of the warrants is ().
| F-19 |
Equity Incentive Plan
On May 25, 2022, our board of directors and majority shareholders approved the adoption of the Bubblr, Inc. 2022 Equity Incentive Plan (the “2022 Equity Incentive Plan”) and, unless earlier terminated, will continue until May 25, 2032. A total of shares of common stock may be issued under the 2022 Equity Incentive Plan. The purpose of the 2022 Equity Incentive Plan is to foster and promote our long-term financial success and increase stockholder value by motivating performance through incentive compensation. The 2022 Equity Incentive Plan is intended to encourage participants to acquire and maintain ownership interests in our company and to attract and retain the services of talented individuals upon whose judgment and special efforts the successful conduct of our business is largely dependent.
If the employee is terminated for cause, the employee will forfeit the Restricted Stock Units awarded to date.
During the nine months ended September 30, 2022, the Company issued pursuant to the 2022 Equity Incentive Plan, a total of shares
of common stock to two Company executives as restricted stock units pursuant to their employment agreements. See Note 12 –
Commitments and Contingencies.
The shares were valued at ,
based on the market price of the common stock on the respective dates of the agreements, which was per
share, and amortized over their two-year vesting period on a straight-line basis. During the nine months ended September 30, 2022, the
Company recorded stock-based compensation of $
shares of performance-based stock compensation are scheduled to vest on each of June 1, 2023 and June 1, 2024, respectively. The Company has elected to treat the award as a single award of shares that vests ratably over the vesting period.
The following table shows the deferred stock compensation activity during the nine months ended September 30, 2022:
| Deferred stock compensation at December 31, 2021 | $ | |||
| Awards issued | ||||
| Vesting of stock compensation | ( | ) | ||
| Deferred stock compensation at June 30, 2022 | $ |
| Awards issued | ||||
| Vesting of stock compensation | ( | ) | ||
| Deferred stock compensation at September 30, 2022 | $ |
NOTE 12 - COMMITMENTS AND CONTINGENCIES
During the nine months ended September 30, 2022 and
2021, the Company paid $
During
the nine months ended September 30, 2022 and 2021, the Company paid $
On May 31, 2022, our board of directors approved amended and restated employment agreements in favor of our Chief Executive Officer, Rik Willard, and our Chief Commercial Officer, Steven Saunders.
| F-20 |
On March 25, 2022, the Company entered into a service
agreement with PCG Advisory, Inc. The term is
NOTE 13 - SUBSEQUENT EVENTS
The Company has evaluated subsequent events through the date of issuance of these consolidated financial statements and noted the following significant events requiring disclosure.
On October 20, 2022, shares of common
stock valued at $
| F-21 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
Business Overview
Bubblr, Inc is a company founded on the principles of digital evolution, rapid innovation and the emerging importance of ethical and equitable Internet applications. We call this emergent global movement The Ethical Web (or, WEB.Ɛ).
The 5 pillars of WEB.Ɛ are:
| • | An internet that decentralizes profits. | |
| • | An internet that consecrates citizens’ rights to privacy. | |
| • | An internet that levels the playing field for businesses | |
| • | An internet that combats social and cultural division | |
| • | An internet that is not corrupted by advertising |
Mission
Our goal is to fix a broken internet model that currently suffers from the following failures:
| 1. | Systematic abuse of an individual’s personal data; | |
| 2. | Prohibitively expensive and complex businesses marketing channels for SMEs; and | |
| 3. | A lack of financial incentives to develop and sustain new Internet economic models. |
Bubblr brings a holistic approach to the above problems in a fundamentally unique way. Building on its patented alternative online search mechanism and engaging with the global digital developer community, we plan to build a new economic platform that we believe will be sustainable and assist developers in creating applications that are intrinsically fair to users, businesses, and all online stakeholders. Our mission is twofold:
| 1) | Empower the developers of a new Internet in creating Ethical Technologies both through in-house Intellectual Property, providing advanced digital tools that enable developers and creators to build fair-forward solutions to build a new Ethical Internet Ecosystem (the “Ethical Web” or WEB.Ɛ), and |
| 2) | Acquire/Commercialize/Invest in WEB.Ɛ products and services developed on our global platform and/or with corporate partners. |
Open-Code Ecosystem
Understanding that the WEB.Ɛ concept is larger than any one entity, requiring various layers of technologies across multiple business sectors, we are building an Open-Code Platform (OSP) to engage and incentivize the world’s developers and engineers in our mission for a more equitable Internet, at the DNA level.
With our own intellectual property at its core, we will construct our OCP with economic incentives for the developer community in mind, incorporating a number of related digital tools that support the ethical development of new mobile applications that adhere to and reflect the highest standards of WEB.Ɛ.
We believe that our software as a service (SAAS) Open-Code Platform will allow the open-source community, companies and not-for-profits to be able to build their own mobile applications using templates downloadable from a central code repository. We intend to focus on Low-Code and No-Code applications as much as possible to attract a larger pool of developers. As partners register onto our platform, they are provisioned with online dashboards that allow them to fully utilize the SAAS platform and will have their own sandbox provisioned to test their apps.
| 4 |
Mobile-First
All of the consumer-based products subsequently developed by our registered partners are designed to deliver the presentation layer through mobile-first consumer experiences.
While we are a mobile-first company, we understand the need for flexibility in order to maximize market penetration. To this end we plan to develop relationships with the new wave of security-first browsers such as Brave, TOR and others.
Monetization and Market-Making
We are developing our platform by concentrating on proven value methodologies designed to exponentially increase the adoption of our IP through the following four-tiered process:
| 1. | Research, Development and Commercialization. We are creating an Open-Code Initiative designed to evolve our IP (developed under patent) as well as that of our partners and future potential acquisitions. This will allow us to identify growth areas and expand ecosystems, platforms, and products within those areas, positioning us for commercialization opportunities across a wide range of business sectors. | |
| 2. | Licensing and SAAS. We will provide revenue opportunities through partnerships with select start-ups and established corporations to further our reach and rapid development of platform applications. The SAAS platform will allow low volume, free community access. However, platform usage is metered, and those partners who start using the platform for larger volume will be obliged to pay an appropriate license fee. | |
| 3. | Venture Funding. We will license or otherwise provide our technology to select start-ups, teams and developers, and fund early-stage startups that develop promising applications arising from the platform. This will allow us to grow a multi-sector ecosystem and maximize reach and revenues through multiple streams. |
Advanced Tools and Future Services
We have developed a data-driven conversations (DDC) capability that is in the process of being implemented into our platform and app technologies. This generic application can be used by developers with access to our toolkit and will allow Bubblr to build and alter conversation search dialogues to optimize searching for information and content.
Additionally, are building complex AI and machine learning to optimize search results regarding relevance and salience for searching for critical information. Our plans include adding these algorithms to the Open-Code platform and development ecosystems and to our overall Software Development Kit (SDK).
The systems architecture to support these innovations continues to evolve and our plan is designed to evolve with it. Our belief is that a collection of technologies, geared to incentivize developed and create multiple revenue streams for Bubblr, is the perfect strategy to create exponential value for the Company and significantly enhance our shareholders’ interests.
Our headquarters is located at 21 West 46th Street, New York, NY10036. Our phone number is (647) 646 2263. General information about us can be found at www.bubblr.com. The information contained on or connected to our website is not incorporated by reference into this quarterly report on Form 10-Q and should not be considered part of this or any other report filed with the SEC.
Intellectual Property
We have created a new search mechanism ‘AN INTERNET-BASED SEARCH MECHANISM’, which has been granted a patent in South Africa (2016/06947), New Zealand (725014), the United States of America (‘Utility Patent No. US 10977387, Canada (2962520), the patent Australia (2015248619) has now been granted and we have patents pending on the same processes in the European Union (15723990.6) and the United Kingdom (PCT/GB2015/051130), creating an alternative economic ecosystem to tackle the current broken model and better serve all main participant groups.
Bubblr is currently in the process of filing a sister patent to our approved INTERNET SEARCH MECHANISM. This patent will define an alternative mobile search system purely for information rather than goods and service, which our original patent covers. This new search mechanism is designed to radically change the way search is conducted for information and will bear little resemblance to the established search model. Details of the mobile search application will be become available upon formal filing.
| 5 |
Competition
The space for online marketplaces and ad networks is rapidly evolving. The Advertising Technology (Ad-tech) industry includes all kinds of tools, software platforms (Google, Facebook), agencies, data-brokers, etc. It facilitates targeted advertisements that have become exponentially more invasive over the past decade due to massive amounts of personal data collection. It's a complex and opaque ecosystem that tracks, profiles, discriminates (both personal and business) and manipulates for profit. It's a multi-billion-dollar industry that is now facing litigation, investigations, and new regulations to curb its practices.
We face intense competition from companies with much larger capital resources than us, and, as a result, we could struggle to attract users and gain market share. Many of our existing or future competitors have greater financial resources and greater brand name recognition than we do and, as a result, may be better positioned to adapt to changes in the industry or the economy as a whole. We will strive to advance our technology in each of these sectors ahead of our competitors to gain market share. We also face intense competition in attracting and retaining qualified employees. Our ability to continue to compete effectively will depend upon our ability to attract new employees, retain and motivate our existing employees and to compensate employees competitively. We face significant competition in several aspects of our business, and such competition might increase, particularly in the market for networks and online marketplaces. A key advantage against better resourced competitors is provisioning our technology and related acquisitions as an Open Source SAAS platform. This pushes all of the consumer and merchant marketing responsibility to the registered partners.
Our competitors may announce new products, services or enhancements that better address changing industry standards or the needs of users, such as mobile access or different market focus. Any such increased competition could cause pricing pressure, loss of business or decreased user activity, any of which could adversely affect our business and operating results.
We believe that we have competitive strengths and protection via our IP which is defensible under the umbrella protection of our granted patents.
Results of Operation for Three and nine Months Ended September 30, 2022 and 2021
Revenues
We did not achieve revenues from our current operations for the three or nine months ended September 30, 2022 or 2021. We will not achieve revenues unless we are able to market, support and deliver our product and service offerings. There can be no assurances that we will achieve revenues despite our efforts.
Operating Expenses
Our operations for the three months ended September 30, 2022 and 2021 are outlined below:
| Three Months Ended September 30, | ||||||||||||||||||
| 2022 | 2021 | Change | % | |||||||||||||||
| General and administrative | $ | 12,736 | $ | 16,564 | $ | (3,828 | ) | (23)% | ||||||||||
| Professional Fees | $ | 160,794 | $ | 123,265 | $ | 37,529 | 30% | |||||||||||
| Market and regulation costs | $ | 63,300 | $ | 39,142 | $ | 24,158 | 62% | |||||||||||
| Compensation | $ | 159,864 | $ | 187,090 | $ | (27,226 | ) | (15)% | ||||||||||
| Amortization and depreciation | $ | 60,234 | $ | 95,172 | $ | (34,938 | ) | (37)% | ||||||||||
| Research and development | $ | 53,132 | $ | 188,834 | $ | (135,702 | ) | (72)% | ||||||||||
| Total | $ | 510,060 | $ | 650,067 | $ | (140,007 | ) | (22)% | ||||||||||
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General and administrative
General and administrative expenses consist mainly of costs associated with non-specific costs of running the business. These include but are not limited to the costs of office provision, computer software not associated with research and development, travel, and telecoms.
The decrease in the costs from 2021 to 2022 have been mainly due to the decreased costs associated with reduction in rental of premises, general software, and insurance costs.
Professional fees
Professional fees consist of costs in relation to legal, accounting, and marketing matters as well as the costs of consultants for our executive and advisory boards.
The increase in consultancy costs from 2021 to 2022 is mainly due to increased costs of our executive board including the recognition of earned stock-based awards under the 2022 incentive plan, and legal fees associated with increased reporting requirements with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Company’s transition to a more senior exchange.
Market and regulation expenses
Market and regulation costs are cost incurred specifically in relation to fees and expenses for investor relations, our transfer agent, compliance consultancy and/or market public relations firm.
The increase in costs from 2021 to 2022 is the result of increase in investor relations and market application fee costs as the Company pursues in stated objective of increasing market awareness and progressing to a more senior exchange.
Compensation
Compensation costs are costs incurred by the Company in relation to its employees and includes salaries, health insurance, pension costs and any taxes due on employment.
Savings were made in salaries and employment costs from 2021 and 2022 as the Company reduced its UK employees and engaged specialist consultants on an “as needed” basis.
Amortization and depreciation
The significant portion of the costs recorded by the Company in regards amortization and depreciation are from the amortization of patents and intellectual property. The majority of patents and intellectual property are held in the UK subsidiary, Bubblr Ltd.
Reduction in costs from 2021 to 2022 are due the adverse effects of foreign currency fluctuation on the value of the Great British Pound which has fallen significantly against the United States Dollar in the 3 months to September 30, 2022
Research and Development
Cost incurred in relation to development of the Company’s platform includes mainly costs associated with development staff and specialist software for product development and deployments.
The reduction in costs from 2021 to 2022 resulted from the Company reducing the number of software development contractors.
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Results of Operation for the Nine Months Ended September 30, 2022 and 2021
Revenues
We did not achieve revenues from our current operations for the nine months ended September 30, 2022 or 2021. We will not achieve revenues unless we are able to market, support and deliver our product and service offerings. There can be no assurances that we will achieve revenues despite our efforts.
Operating Expenses
Our operations for the nine months ended September 30, 2022 and 2021 are outlined below:
| Nine Months Ended September 30, | ||||||||||||||||||
| 2022 | 2021 | Change | % | |||||||||||||||
| General and administrative | $ | 40,164 | $ | 107,246 | (67,082 | ) | (63)% | |||||||||||
| Professional Fees | $ | 2,449,350 | $ | 1,795,560 | $ | 653,790 | 36% | |||||||||||
| Market and regulation costs | $ | 145,488 | $ | 72,164 | $ | 73,324 | 102% | |||||||||||
| Compensation | $ | 473,355 | $ | 532,413 | (59,058 | ) | (11)% | |||||||||||
| Amortization and depreciation | $ | 268,688 | $ | 285,867 | (17,179 | ) | (6)% | |||||||||||
| Research and development | $ | 167,087 | $ | 452,222 | (285,135 | ) | (63)% | |||||||||||
| Total | $ | 3,544,132 | $ | 3,245,472 | $ | 298,660 | 9% | |||||||||||
General and administrative
General and administrative expenses consist mainly of costs associated with non-specific costs of running the business. These include, but are not limited to the costs of office provision, computer software not associated with research and development, travel and telecoms.
The decrease in the costs have been mainly due to the decreased costs associated with general advertising spending undertaken in 2021 that was not repeated in 2022.
Professional fees
Professional fees consist of cost in relation to legal, accounting, and marketing matters as well as the costs of consultants for our executive and advisory boards.
The increase in consultancy costs from 2021 to 2022 mainly due to increased costs of our executive board including the recognition of earned stock-based awards under the 2022 incentive plan, and legal fees associated with increased reporting requirements with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Company’s transition to a more senior exchange.
Market and regulation expenses
Market and regulation costs are cost incurred specifically in relation to fees and expenses for investor relations, our transfer agent, compliance consultancy and/or market public relations firm.
The increase in costs from 2021 to 2022 is the result of increase in investor relations and market application fee costs as the Company pursues in stated objective of increasing market awareness and progressing to a more senior exchange.
| 8 |
Compensation
Compensation costs are costs incurred by the company in relation to its employees and includes salaries, health insurance, pension costs and any taxes due on employment.
Savings were made in salaries and employment costs from 2021 and 2022 as the Company reduced its UK employees and engaged specialist consultants on an “as needed” basis.
Amortization and depreciation
The significant portion of the costs recorded by the Company in regards amortization and depreciation are from the amortization of patents and intellectual property. The majority of patents and intellectual property are held in the UK subsidiary, Bubblr Ltd.
Reduction in costs from 2021 to 2022 are due to the additional amortization applied to intellectual property added in Q4 2021 and patents costs of securing the “Internet-Search Mechanism” patent in multiple territories added during the year, being offset by the adverse effects of foreign currency fluctuation on the value of the Great British Pound which has fallen significantly against the United States Dollar in the 12 months to September 30, 2022.
Research and Development
Cost incurred in relation to development of the Company’s platform includes mainly costs associated with development staff and specialist software for product development and deployments.
The reduction in costs from 2021 to 2022 resulted from the Company reducing the number of software development contractors as we focused on corporate and financing issues.
Other Income (Expenses)
Our other income for the three months ended September 30, 2022 and 2021 are outlined below:
| Three Months Ended September 30, | |||||||||||||||||||
| 2022 | 2021 | Change | % | ||||||||||||||||
| Interest income | $ | 389 | $ | 457 | $ | (68 | ) | (15)% | |||||||||||
| Interest expense | $ | (102,088 | ) | $ | (28,630 | ) | $ | (73,458 | ) | 257% | |||||||||
| Gain on change in fair value of warrant derivative liability | $ | 133,096 | $ | — | $ | 133,096 | — | ||||||||||||
| Foreign currency transaction loss | $ | (127,776 | ) | $ | (38,138 | ) | $ | (89,638 | ) | 235% | |||||||||
| Total | $ | (96,379 | ) | $ | (66,311 | ) | $ | (30,068 | ) | 45% | |||||||||
Interest Income
The Company earns interest income on its cash reserves and on advances receivable . The gain on interest from the advance was offset in part by the decrease in interest income from the Company’s cash, which decreased during the year.
Interest Expense
Interest expense consists mainly of interest the Company has to pay on its borrowings and on a vehicle financing held by the Company. In November 2019 the Company entered into a financing arrangement with Alphera Financial Services with which the Company purchased a vehicle. The term of this loan is 5 years and annual interest rate is 6.90%.
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The increase in costs from 2021 to 2022 has been due to the Company’s arrangements regarding finance principally through costs associated with the loan waiver required in conjunction with the Company’s Series C preferred shares and commitment shares of common stock in conjunction with the Equity Financing agreements charged to interest expense, amortization and interest due on the Convertible notes issued.
Funds raised during the year ended December 31, 2021 under these convertible notes totaled $2,287,780, less an original issuance discount of $104,572, which is being amortized over the length of the note to maturity of 18 months.
In 2020, the Company received two loans from minority shareholders totaling $297,006. The loan of $245,234 was non-interest bearing and due for repayment on January 31, 2021. The loan of $51,772 carried an original interest rate of 20% and was due for repayment on December 31, 2020. In 2021 the Company received a loan from a minority shareholder totaling $81,162. The loan was non-interest bearing and due for repayment on February 28, 2022, which was extended to April 30, 2022 and repaid in full by April 30, 2022.
Gain on change in fair value of warrant derivative liability
The Company analyzed the warrants issued in connection with the Series C Convertible Preferred Stock (see Note 11) for derivative accounting consideration under ASC 815, Derivatives and Hedging. ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.
The Company did not issue any warrants in 2021.
Our other income for the nine months ended September 30, 2022 and 2021 are outlined below:
| Nine Months Ended September 30, | ||||||||||||||||||
| 2022 | 2021 | Change | % | |||||||||||||||
| Interest income | $ | 1,243 | $ | 1,083 | $ | 160 | 15% | |||||||||||
| Gain on settlement of debt | $ | — | $ | 5,000 | $ | (5,000 | ) | — | ||||||||||
| Interest expense | $ | (547,352 | ) | $ | (36,434 | ) | $ | (510,918 | ) | 1,402% | ||||||||
| Gain on change in fair value of warrant derivative liability | $ | 384,383 | $ | — | $ | 384,383 | — | |||||||||||
| Foreign currency transaction loss | $ | (289,790 | ) | $ | (51,952 | ) | $ | (237,838 | ) | 458% | ||||||||
| Total | $ | (451,516 | ) | $ | (82,303 | ) | $ | (371,234 | ) | 449% | ||||||||
Interest Income
The Company earns interest income on its cash reserves and on advances receivable . The gain on interest from the advance was offset in part by the decrease in interest income from the Company’s cash, which decreased during the year.
As of September 30, 2022 and 2021, interest income was received on the following sources:
| Nine Months Ended September 30, | ||||||||||||||||||
| 2022 | 2021 | Change | % | |||||||||||||||
| Advances receivable | $ | 1,231 | $ | 981 | $ | 250 | 25% | |||||||||||
| Cash | $ | 12 | $ | 102 | $ | (90 | ) | (88)% | ||||||||||
| Total | $ | 1,243 | $ | 1,083 | $ | 160 | 15% | |||||||||||
| 10 |
As of September 30, 2022 and December 31, 2021, advances receivable consisted of the following:
| September 30, | December 31, | ||||||
| 2022 | 2021 | ||||||
| Advance principal receivable -G | $ | 44,189 | $ | 54,529 | |||
| Advance principal receivable -J | 17,874 | 21,643 | |||||
| Repayment received | (1,231 | ) | — | ||||
| Interest due | 5,443 | 4,079 | |||||
| Total advances receivable | $ | 66,275 | $ | 80,251 | |||
The advance labelled Advance principal receivable-G carries an interest rate of 3%. The advance principal labelled Advance receivable -J is non-interest bearing. The Company has the expectation that both outstanding advances will be repaid to the Company within the next 12 months. Repayment of $1,231 and $0 was received from G in the nine months to September 30, 2022 and 2021
Any difference on the Advance principal is due to currency translation
Interest Expense
Interest expense consists mainly of interest the Company has to pay on its borrowings and on a vehicle financing held by the Company. In November 2019 the Company entered into a financing arrangement with Alphera Financial Services with which the Company purchased a vehicle. The term of this loan is 5 years and annual interest rate is 6.90%.
The principal amounts outstanding for the Company’s borrowings as of September 30, 2022 and December 31, 2021 are as follows:
| September 30, | December 31, | |||||||||||||||||
| 2022 | 2021 | Change | % | |||||||||||||||
| Vehicle Financing | $ | 22,961 | $ | 35,918 | $ | (12,957 | ) | (36)% | ||||||||||
| Convertible Notes, net | $ | 2,287,780 | $ | 2,287,780 | $ | — | - | |||||||||||
| Loans Payable - Related Party | $ | 890,901 | $ | 509,339 | $ | 381,562 | 75% | |||||||||||
| Total | $ | 3,201,642 | $ | 2,833,037 | $ | 368,605 | 13% | |||||||||||
The increase in interest expense during the nine months ended September 30, 2022 as compared to 2021 is due to the Company’s borrowings principally through proceeds from convertible notes issued in 2021. Funds raised via the issuance of convertible notes as of September 30, 2022 was $2,287,780 of which $2,112,150 was issued in June 2021, is less an original issuance discount of $104,572 which is amortized over the length of the note to maturity of 18 months and $175,630 issued in November 30, 2021. The Company received a loan from a minority shareholder of $19,709 in February 2022 that bears interest at a rate of 20% per annum and is due for repayment before February 15, 2023. We borrowed $478,488 from our founder in September 2022. The loan is due for repayment in 3 years and is non-interest bearing. The remaining loan of $460,765 is non-interest bearing and is due for repayment on demand where the maturity date is the earlier of (i) the completion of an offering by Bubblr, Inc., in the amount of no less than $7,500,000 in a public offering, or (ii) 23 May 2024.
Gain on change in fair value of warrant derivative liability
The Company analyzed the warrants issued in connection with the Series C Convertible Preferred Stock for derivative accounting consideration under ASC 815, Derivatives and Hedging. ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.
| 11 |
For the nine months ended September 30, 2022, the estimated fair values of the warrant liabilities measured on a recurring basis are as follows:
| Nine Months Ended | |||
| September 30, 2022 | |||
| Expected term | 2.21 - 2.50 years | ||
| Expected average volatility | 178 - 220% | ||
| Expected dividend yield | 8.3%3 | ||
| Risk-free interest rate | 1.50 – 4.22% | ||
The following table summarizes the changes in the warrant liabilities during the period ended September 30, 2022:
| Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||
| Warrant liability as of December 31, 2021 | $ | — | ||
| Addition of new warrant liabilities | 421,000 | |||
| Day-one loss | 28,043 | |||
| Change in fair value of warrant liability | (4,152 | ) | ||
| Warrant liability as of March 31, 2022 | $ | 444,891 | ||
| Addition of new warrant liabilities | 368,000 | |||
| Day-one gain | (95,768 | ) | ||
| Change in fair value of warrant Liability | (275,178 | ) | ||
| Warrant liability as of June 30, 2022 | $ | 441,945 | ||
| Change in fair value of warrant Liability | (133,096 | ) | ||
| Warrant liability as of September 30, 2022 | $ | 308,849 | ||
The market price of the common stock has decreased from the initial award of warrants in the period ending March 31, 2022. If the warrants were exercised at September 30, 2022 at their respective exercise price determined at issue, the Company would realize a gain due to the difference between the cash received on conversion and the issue cost to the Company of $0.1895 per share, the fair value market price of the common stock at September 30, 2022.
Net Loss
We finished the nine months ended September 30, 2022 with a net loss after income tax of $3,995,648 as compared to a net loss after income tax of $3,327,775 for the nine months ended September 30, 2021.
Liquidity and Capital Resources
Working Capital
The following table provides selected financial data about our company as of September 30, 2022 and December 31, 2021, respectively.
| September 30, | December 31, | ||||||||||||||
| 2022 | 2021 | Change | % | ||||||||||||
| Current Assets | $ | 229,459 | $ | 161,184 | $ | 68,275 | 42% | ||||||||
| Current Liabilities | $ | 2,894,927 | $ | 744,820 | $ | 2,150,107 | 289% | ||||||||
| Working Capital Deficit | $ | (2,665,468 | ) | $ | (583,636 | ) | $ | (2,081,832 | ) | 357% | |||||
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We require cash to fund our operating expenses and working capital requirements, including outlays for capital expenditures. As of September 30, 2022, we had $154,780 in the bank, trade accounts receivable of $8,404 and advances receivable of $66,275 as compared to cash of $62,967, trade accounts receivable of $17,966, and advances receivable of $80,251 as of December 31, 2021.
During the last two years, and through the date of this Report, we have faced an increasingly challenging liquidity situation that has limited our ability to execute our operating plan. We will need to obtain capital to continue operations. There is no assurance that we will be able to secure such funding on acceptable terms. During the nine months ended September 30, 2022, we reported a loss from operations of $3,995,648.
As of September 30, 2022, we had assets of cash in the amount of $154,780 and other current assets in the amount of $74,679. As of September 30, 2022, we had current liabilities of $ 2,894,927. Our accumulated deficit as of September 30, 2022 was $12,423,303.
As of December 31, 2021, we had assets of cash in the amount of $62,967 and other current assets in the amount of $98,217. As of December 31, 2021, we had current liabilities of $744,820. Our accumulated deficit as of December 31, 2021 was $8,385,496.
As no revenues are generated from our current operations, we will require additional capital to continue to operate our business, and to further expand our business. Sources of additional capital through various financing transactions or arrangements with third parties may include equity or debt financing, bank loans or revolving credit facilities. We may not be successful in locating suitable financing transactions in the time period required or at all, and we may not obtain the capital we require by other means. Unless we can attract additional investment, our operating as a going concern is in doubt.
We are now obligated to file annual, quarterly and current reports with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and the rules subsequently implemented by the SEC and the Public Company Accounting Oversight Board (“PCAOB”) have imposed various requirements on public companies, including requiring changes in corporate governance practices. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities of ours more time-consuming and costly. In order to meet the needs to comply with the requirements of the Exchange Act, we will need investment of capital.
Management has determined that additional capital will be required in the form of an initial public offering. There is no assurance that management will be able to raise capital on terms acceptable to us, or at all.
If we are unable to obtain sufficient amounts of additional capital, we may have to cease filing the required reports and cease operations completely. If we obtain additional funds by selling any of our equity securities or by issuing common stock to pay current or future obligations, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution, or the equity securities may have rights preferences or privileges senior to the common stock.
As of September 30, 2022 and December 31, 2021, we had total current assets of $229,459 and $161,184, respectively, and total current liabilities of $2,894,927 and $744,820, respectively, resulting in a working capital deficit of $2,665,468 and $583,636, respectively.
Cash Flow
| Nine months ended 30 September, | |||||||||||
| 2022 | 2021 | Change | |||||||||
| Cash used in Operating Activities | $ | (1,363,863 | ) | $ | (1,506,563 | ) | $ | 142,700 | |||
| Cash used in Investing Activities | $ | (18,282 | ) | $ | (72,349 | ) | $ | 54,067 | |||
| Cash provided by Financing Activities | $ | 1,181,636 | $ | 1,696,413 | $ | (514,777) | |||||
| Cash on Hand | $ | 154,780 | $ | 257,549 | $ | (102,769) | |||||
| 13 |
Operating Activities
During the nine months ended September 30, 2022, we used $1,363,863 by operating activities, compared to $1,506,564 during the nine months ended September 30, 2021. The reduction of cash used in operating activities was primarily due to an increase in net loss, which was offset by stock issued for services and finance incentives.
Investing Activities
During the nine months ended September 30, 2022, we used funds in investing activities of $18,282 to acquire additional intangible assets. During the nine months ended September 30, 2021, we used funds in investing activities of $72,349 to acquire property and equipment, as well as additional intangible assets.
Financing Activities
During the nine months ended September 30, 2022 we raised $1,302,197 as follows: $789,000 through the issuance of Series C Convertible Preferred Stock and associated warrants, $15,000 from loan payable, and $498,197 from loans from related parties. These proceeds were offset through payment of $20,026 dividends due related to our Series C Convertible Preferred Stock, repayment of $7,595 for vehicle financing, $15,000 from loan payable and repayment of $77,940 for loans received from a related party. For the nine months ended September 30, 2022, we had total cash outflows from financing activities of $120,561, resulting in net cash provided by financing activities of $1,181,636. By comparison, in the nine months ended September 30, 2021, we raised $2,007,578 from convertible notes offset by repayment of $8,097 for vehicle financing and $303,068 for loans received from a related party. For the nine months ended September 30, 2021, we had total cash outflows from financing activities of $311,165, resulting in net cash provided by financing activities of $1,696,413.
We also plan to seek additional financing in a private or public equity offering to secure funding for operations. There can be no assurance that we will be successful in raising additional funding. If we are not able to secure additional funding, the implementation of our business plan will be impaired. There can be no assurance that such additional financing will be available to us on acceptable terms or at all.
Critical Accounting Policies and Significant Judgments and Estimates
This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. While our significant accounting policies are described in more detail in the notes to our financial statements included elsewhere in this prospectus, we believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.
We believe our most critical accounting policies and estimates relate to the following:
| • | Foreign Currency Translations | |
| • | Intangible Assets | |
| • | Long-lived Assets | |
| • | Income Taxes | |
| • | Stock-based Compensation | |
| • | Common Stock Purchase Warrants and Derivative Financial Instruments | |
| • | Convertible Financial Instruments | |
| • | Fair Value of Financial Instruments |
| 14 |
Foreign Currency Translations
The functional currency of the Company’s international subsidiaries is generally their local currency of Great British pounds (GBP). Local currency assets and liabilities are translated at the rates of exchange on the balance sheet date, and local currency revenues and expenses are translated at weighted average rates of exchange during the period. Equity accounts are translated at historical rates. The resulting translation adjustments are recorded directly into accumulated other comprehensive income.
Intangible Assets
The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed on a straight-line basis over the estimated periods benefited. Patents, technology and other intangibles with contractual terms are generally amortized over their respective legal or contractual lives. When certain events or changes in operating conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted.
Long-Lived Assets
Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value.
Income Taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
Convertible Financial Instruments
The Company bifurcates conversion options from their host instruments and accounts for them as free-standing derivative financial instruments if certain criteria are met. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not remeasured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument is deemed to be conventional, as that term is described under applicable U.S. GAAP.
Fair Value of Financial Instruments
The Company accounts for financial instruments in accordance with ASC 820, “Fair Value Measurements and Disclosures.” ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
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Stock Based Compensation
The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation–Stock Compensation, which prescribes accounting and reporting standards for all share-based payment transactions in which employee and non-employee services are acquired. Share-based payments to employees and non-employees, including grants of stock options, are recognized as compensation expense in the financial statements based on the stock awards’ fair values on the grant date. That expense is recognized over the period required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).
Common Stock Purchase Warrants and Derivative Financial Instruments
Common stock purchase warrants and other derivative financial instruments are classified as equity if the contracts (1) require physical settlement or net-share settlement, or (2) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). Contracts which (1) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (2) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (3) that contain reset provisions that do not qualify for the scope exception are classified as liabilities. The Company assesses classification of its common stock purchase warrants and other derivatives at each reporting date to determine whether a change in classification between equity and liabilities is required.
Recent Accounting Pronouncements
For discussion of recently issued and adopted accounting pronouncements, please see Note 2 to the unaudited consolidated financial statements for the nine months ended September 30, 2022 and 2021 included herein.
Off Balance Sheet Arrangements
As of September 30, 2022, there were no off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information regarding this Item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in our reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and our chief financial officer, as appropriate, to allow timely decisions regarding required disclosures. However, our chief executive officer and our chief financial officer have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under Exchange Act) as of the end of the period by this Form 10-Q and have concluded that we have material weaknesses and significant deficiencies in our internal control over financial reporting as described below. Accordingly, our disclosure controls and procedures were not sufficient to accomplish their objectives at the reasonable assurance level as of September 30, 2022.
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Management’s Report of Internal Control over Financial Reporting
Our chief executive officer and our interim chief financial officer are responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rule 13a-15(f) under the Exchange Act. An evaluation was performed of the effectiveness of our internal control over financial reporting. The evaluation was based on the framework in 2013 Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Based on our evaluation under the criteria set forth in 2013 Internal Control — Integrated Framework, our management concluded that, as of September 30, 2022 our internal control over financial reporting was not effective because of the identification of material weaknesses described as follows:
| • | We did not have controls designed to validate the completeness and accuracy of underlying data used in the determination of accounting transactions. Accordingly, we believe we have a material weakness because there is a reasonable possibility that a material misstatement to the interim or annual consolidated financial statements would not be prevented or detected on a timely basis. | |
|
• | We have limited written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act which is applicable to us. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness. |
| • | We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness. | |
| • | We have an inadequate number of personnel with requisite expertise in the key functional areas of finance and accounting. | |
| • | We do not have a functioning audit committee or outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures. |
Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting
Our Management is committed to improving its internal controls when we have adequate resources to do so, we will add a full-time chief financial officer and appoint outside directors and establish an audit committee. Due to the nature of these material weaknesses, it is reasonably possible that misstatements which could be material to the annual or interim consolidated financial statements could occur that would not be prevented or detected during our financial close and reporting process.
Our company plans to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending December 31, 2022: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the three months ended September 30, 2022 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are averse to us or have a material interest adverse to us.
Item 1A: Risk Factors
See risk factors included in our Registration Statement on Form S-1 (File No. 333-267373) initially filed on September 9, 2022 and the amendments thereto.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The information set forth below relates to our issuances of securities without registration under the Securities Act of 1933.
In the nine months ended September 30, 2022, the Company issued the following unregistered securities, pursuant to exemption from registration pursuant to Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder:
| • | 8,400,000 shares for the 2022 Incentive Scheme award deferred compensation valued at $2,259,600. |
| • | 147,960 shares for Executive Board Chair services valued at $75,460. The issuance was exempt under Section 4(a)(2) of the Securities Act. |
| • | 7,760,847 shares for Investor Relations and Consulting services valued at $2,023,061. The issuance was exempt under Section 4(a)(2) of the Securities Act. |
| • | 793,039 shares as commitment shares under the Equity Financing Agreement valued at $379,814. The issuance was exempt under Section 4(a)(2) of the Securities Act. |
| • | 345,220 shares as compensation for loan waiver under Series C Preferred Stock share purchase agreement valued at $71,703. The issuance was exempt under Section 4(a)(2) of the Securities Act. |
| • | 903 shares of Series C Preferred Stock and 75% warrant coverage in connection with Securities Purchase Agreements with GHS and Proactive |
Subsequent to the reporting period, the Company issued 36,939 shares of Common Stock valued at $7,000 in connection with Investor Relation Services.
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
None.
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Item 6. Exhibits
| Exhibit Number | Description of Exhibit | |
| 31.1** | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2** | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1** | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101** | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 formatted in Extensible Business Reporting Language (XBRL). | |
| **Provided herewith |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Bubblr, Inc. | ||
| Date: | November 9, 2022 | |
| By: | /s/ Rik Willard | |
| Rik Willard | ||
| Title: | Chief Executive Officer (principal executive officer) | |
| By: | /s/ Virginia Mackin | |
| Virginia Mackin | ||
| Title: | Interim Chief Financial Officer (principal financial officer and principal accounting officer) |
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| CERTIFICATIONS |
I, Rik Willard, certify that;
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 of Bubblr, Inc. (the “registrant”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 9, 2022
/s/ Rik Willard
By: Rik Willard
Title: Chief Executive Officer
| CERTIFICATIONS |
I, Virginia Mackin, certify that;
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 of Bubblr, Inc. (the “registrant”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 9, 2022
/s/ Virginia Mackin
By: Virginia Mackin
Title: Interim Chief Financial Officer
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND
CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Bubblr, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2022 filed with the Securities and Exchange Commission (the “Report”), I, Rik Willard, Chief Executive Office, and I, Virginia Mackin, Interim Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and the consolidated result of operations of the Company for the periods presented. |
| By: | /s/ Rik Willard |
| Name: | Rik Willard |
| Title: | Chief Executive Officer |
| Date: | November 9, 2022 |
| By: | /s/ Virigina Mackin |
| Name: | Virginia Mackin |
| Title: | Interim Chief Financial Officer |
| Date: | November 9, 2022 |
This certification has been furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.