STOCKHOLDERS’ EQUITY

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

STOCKHOLDERS’ EQUITY

NOTE 10 - STOCKHOLDERS’ EQUITY

Preferred Stock

The Company has authorized 25,000,000 preferred shares with a par value of $0.001 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.

Series C Convertible Preferred Stock

On March 4, 2022, the Company filed a Certificate of Designation with the Wyoming Secretary of State, which established 2,000 shares of the Company’s Series C Convertible Preferred Stock, with a Stated Value of $1,200 per share.

The Company has the right to redeem the Series C Convertible Preferred Stock in accordance with the following schedule:

● The Company shall have the right to redeem the Series C Convertible Preferred Stock upon three business days of written notice at a price equal to 120% of the Stated Value together with any accrued but unpaid dividends; and

● The Company shall pay 8% per annum dividend on the Series C Convertible Preferred Stock. Dividends shall be paid quarterly, and at the Company’s discretion, in cash or Series C Convertible Preferred Stock. Dividends shall be deemed to accrue from the date of issuance of the Series C Convertible Preferred Stock whether or not earned or declared and whether or not there are profits, surplus, or other funds of the Company legally available for the payment of dividends.

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).

Each share of the Series C Convertible Preferred Stock is convertible, at any time and from time to time from and after the issuance at the option of the Holder thereof, into that number of shares of Common Stock (subject to Beneficial Ownership Limitations) determined by dividing the Stated Value of $1,200 of such share by the Conversion Price of $0.3202.

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 $700,000 of the Company’s Series C Convertible Preferred Stock in exchange for 700 shares of Series C Convertible Preferred Stock.

On March 4, 2022, the Company issued to GHS the first tranche of 300 shares of Series C Convertible Preferred Stock, as well as commitment shares of 35 shares of Series C Convertible Preferred Stock and 941,599 warrant shares (the “GHS Warrant”). Warrant shares represent 75% of the number of shares of common stock issuable upon conversion of the Series C Convertible Preferred Stock (the “GHS Warrant Shares”). The Company has agreed to register the shares of common stock issuable pursuant to the conversion of the Series C Convertible Preferred Stock and the GHS Warrant Shares.

GHS delivered gross proceeds of $266,000 to the Company (excluded were legal fees and a transaction fee charged by Spartan Capital).

On March 9, 2022, the Company entered a Securities Purchase Agreement with Proactive Capital Partners LP (“Proactive”), whereby Proactive agreed to purchase 160 shares of Series C Preferred Stock. .

The Company agreed to issue Proactive commitment shares of 8 shares of Series C Convertible Preferred Stock and 472,205 warrant shares (the “Warrant”). Warrant shares represent 75% of the number of shares of common stock issuable upon conversion of the Series C Convertible Preferred Stock (the “Warrant Shares”). The Company has agreed to register the shares of common stock issuable pursuant to the conversion of the Series C Convertible Preferred Stock and the Warrant Shares.

On March 9, 2022, the Company issued 168 shares of Series C Convertible Preferred stock to Proactive Capital Partners LP as per the Securities Purchase Agreement. Proactive delivered gross proceeds of $290,000 to the Company (excluded were legal fees).

On April 24, 2022, the Company issued the second tranche of 200 shares of Series C Convertible Preferred Stock and 562,149 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 $184,000 to the Company (excluded were legal fees and a transaction fee charged by Spartan Capital).

On May 25, 2022, the Company issued the third tranche of 100 shares of Series C Convertible Preferred Stock and 281,074 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 $92,000 to the Company (excluded were legal fees and a transaction fee charged by Spartan Capital).

On September 24, 2022, the Company issued the fourth tranche of 100 shares of Series C Convertible Preferred Stock and 281,074 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 $92,000 to the Company (excluded were legal fees and a transaction fee charged by Spartan Capital).

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 (US$550,468 at September 30, 2023). 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 345,220 shares of common stock: 281,000 shares of common stock to GHS and 64,220 shares of common stock to Proactive. The resulting common shares were valued at $71,703, recorded as interest expense.

As a result of the above transactions, the Company received total net proceeds of $789,000, of which $721,275 has been allocated to the warrants and Series C Preferred Stock based on the warrants’ fair market values on each contract date, with the residual loss of $28,043 allocated to day-one loss on warrant liability associated with the March 2022 issuances, and excess proceeds of $95,768 allocated to the Series C Preferred Stock associated with the April, May, and September 2022 issuances.

As at September 30, 2023 and December 31, 2022, the Company had 903 shares of Series C Preferred Stock issued and outstanding.

Common Stock

The Company has authorized 3,000,000,000 common shares with a par value of $0.01 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, the Company issued the following unregistered securities:

● 147,960 shares for Executive Board Chair services valued at $75,460.

● 67,079 shares for Investor Relations services valued at $22,980.

● 7,597,244 shares for Consultancy services valued at $1,979,082.

● 587,039 shares as commitment shares under the Equity Financing Agreement with GHS.

● 206,000 shares to White Lion Capital, LLC as a result of a Termination and Release Agreement.

● 903 shares of Series C Preferred Stock and 75% warrant coverage in connection with Securities Purchase Agreements with GHS and Proactive

During the nine months ended September 30, 2023, the Company issued the following unregistered securities:

● 625,000 shares for Consultancy services valued at $100,000.

● 500,000 shares for Professional services valued at $65,000.

● 311,159 shares for dividend due of Series C Preferred Stock valued at $43,805.

● 1,455,784 shares for Investor Relations services valued at $285,338.

As at September 30, 2023, and December 31, 2022, the Company had 157,201,261 and 154,309,318 shares of common stock issued and outstanding, respectively.

The above securities were issued in reliance on the exemption from registration provided by Section 4.(a)(2) of the Securities Act of 1933, as amended, and/or in reliance on the exception from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended. 

Warrants

The Company identified conversion features embedded within warrants issued during the nine months 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 the number of shares issued upon exercise (see Note 9 - Warrant Liability).

A summary of activity during the nine-month period ended September 30, 2023, follows:

	Warrants Outstanding				Weighted Average
	Number of		Weighted Average		Remaining life
	Warrants		Exercise Price		(years)
Outstanding, December 31, 2022		2,538,101	$	0.32		4.27
Granted		-		-		-
Exercised		-		-		-
Forfeited/canceled		-		-		-
Outstanding, September 30, 2023		2,538,101	$	0.32		3.52
Exercisable Warrants, September 30, 2023		2,538,101	$	0.32		3.52

The following table summarizes information relating to outstanding and exercisable warrants as of September 30, 2023:

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
	941,599		3.43	$	0.34		941,599	$	0.34
	472,205		3.44		0.34		472,205		0.34
	562,149		3.57		0.35		562,149		0.35
	281,074		3.65		0.22		281,074		0.22
	281,074		3.74		0.22		281,074		0.22
	2,538,101		3.52	$	0.32		2,538,101	$	0.32

As at September 30, 2023, the intrinsic value of the warrants is $0, as the price of the Company’s stock was below the warrant exercise price.

2022 Equity Incentive Plan

Restricted Stock Units

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 28,400,000 shares of common stock may be issued under the 2022 Equity Incentive Plan. The 2022 Equity Incentive Plan aims 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 (“RSUs”) awarded to date.

During the year ended December 31, 2022, the Company issued, pursuant to the 2022 Equity Incentive Plan, a total of 8,400,000 RSUs to two Company executives pursuant to their employment agreements. (See Note 11 - Commitments and Contingencies) 4,200,000 shares of performance-based stock compensation were scheduled to vest on each September 1, 2023, and September 1, 2024, respectively. The Company had elected to treat the award as a single award of 8,400,000 shares that vests ratably over the vesting period.

The RSUs were valued at $2,259,600, based on the market price of the Company’s common stock on the respective grant dates of the agreements, which was $0.269 per share, and were to be recognized as compensation expense over their two-year vesting period on a straight-line basis. During the year ended December 31, 2022, the Company recorded stock-based compensation of $659,052 and had unrecognized stock compensation of $1,600,548 as of December 31, 2022.

On January 31, 2023 (the “Termination Date”), the award of 8,400,000 RSUs was forfeited by the executives upon their termination of employment. Pursuant to ASC-718-10-30-12, no compensation cost is recognized for instruments that employees forfeit for no cash or other consideration because a service or performance condition is not satisfied. Further, the value of instruments for which the requisite service is not rendered before the award is fully vested is not recognized as an expense, and any previously recognized costs are reversed upon forfeiture. As a result, the remaining unvested stock compensation of $1,600,548 was not recognized, and the prior year recognition of $659,052 in compensation was reversed on the Termination Date.

Stock Options

On April 1, 2023, the Company granted options for purchasing our Common stock to certain employees and non-employees as consideration for services rendered. The terms of the stock option grants are determined by our Board of Directors consistent with our 2022 Equity Incentive Plan, which the Board adopted on May 22, 2022. Our stock option grant general policy is options vest 40% on the Grant Date, which is 90 days after commencement of service (typically the hire date), and the remaining vest monthly over two years and has a maximum term of ten years. Two executives with long-term service over two years and nine months were 100% vested on the Grant Date.

The Company determined our option 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 the Grant Date of the options. The Black Scholes model requires nine 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, 2023, the estimated fair values of the warrant liabilities measured on a recurring basis are as follows:

	Nine Months Ended
	September 30,
	2023
Expected term		5.00 – 5.00 years
Expected average volatility		195 - 199	%
Expected dividend yield		0	%
Risk-free interest rate		3.73 – 4.49	%

The following summarizes the stock options activity for the nine months ended September 30, 2023:

	Options		Weighted-Average
	Outstanding		Exercise Price
Balance as of December 31, 2022		-	$	-
Grants		14,400,000		0.16
Exercised		-		-
Cancelled		-		-
Balance as of September 30, 2023		14,400,000	$	0.16

The following summarizes certain information about stock options vested and expected to vest as of September 30, 2023:

Options Outstanding						Options Exercisable
Number of Options		Weighted Average Remaining Contractual life (in years)		Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
	3,360,000		2.22	$	0.04		3,360,000	$	0.069
	960,000		0.63		0.01		960,000		0.018
	3,360,000		2.22		0.04		1,764,000		0.031
	4,800,000		3.17		0.05		2,160,000		0.032
	1,920,000		1.27		0.02		864,000		0.013
	14,400,000		9.51	$	0.16		9,108,000		0.16

As of September 30, 2023, and December 2022, there were $735,662 and $0, respectively, of total unrecognized compensation costs related to non-vested share-based compensation arrangements, which we expect to recognize within the next 21 months.

Equity Financing Agreements

On February 1, 2022, Bubblr, Inc. entered into a Stock Purchase Agreement (the “SPA”) and Registration Rights Agreement with White Lion Capital LLC (“WLC”). Pursuant to the SPA, the Company had the right, but not the obligation, to cause WLC to purchase up to $10 million of our common stock during the period beginning on February 1, 2022, and ending on the earlier of (i) the date on which the WLC had purchased $10 million of our common stock pursuant to the SPA, or (ii) December 31, 2022.

In consideration for entering into the SPA, on February 1, 2022, the Company issued 103,000 shares of common stock to WLC valued at $93,792.

On March 22, 2022, the Company entered into a Termination and Release Agreement with WLC to extinguish the SPA and Registration Rights Agreement in exchange for issuing 103,000 shares of common stock. The stock was issued on March 22, 2022, and was valued at $51,500.

On March 4, 2022, the Company entered into an Equity Financing Agreement (“EFA”) and Registration Rights Agreement with GHS Investments LLC (“GHS”). Under the terms of the EFA, GHS agreed to provide the Company with up to $15 million upon effectiveness of a registration statement on Form S-1 filed with the U.S. Securities and Exchange Commission.

The registration statement on Form S-1 was effective as of September 24, 2022. During the year ended December 31, 2022, and through September 30, 2023, GHS subsequently provided $0 under the EFA.

In consideration for entering the EFA, on March 4, 2022, the Company issued 587,039 shares of common stock to GHS valued at $234,522.