UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
(Exact name of registrant as specified in its charter)
| 4899 | ||||
|
(State of other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(IRS Employer Identification Number) |
Phone: (
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Registered Agents Inc.
30 N Gould St Ste R
Sheridan, WY 82801 USA
Phone: (307) 200-2803
(Name, address, including zip code, and telephone number, including area code, of agent for service)
With copies to:
Scott Doney, Esq.
The Doney Law Firm
4955 S. Durango Dr. Ste. 165
Las Vegas, NV 89113
Phone: (702) 982-5686
Approximate date of commencement of proposed sale to the public: As soon as practicable after the registration statement is declared effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box: [X]
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one):
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller reporting company
| ||
| Emerging growth company
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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 7(a)(2)(B) of the Securities Act. [ ]
CALCULATION OF REGISTRATION FEE
|
Title of Each Class of Securities to be Registered |
Number of Shares of Common Stock to be Registered(1) |
Proposed Maximum Offering Price Per Share(2) |
Proposed Maximum Aggregate Offering |
Amount of Registration Fee |
||||||||||||
| Common stock, par value $0.001 per share | 10,500,000 | $ | $0.9285 | $ | 9,749,250 | $ | 903.76 | |||||||||
| (1) | Represents the number of shares of common stock that we will sell to White Lion Capital LLC, a Nevada limited liability company (“White Lion”) pursuant to a common stock purchase agreement, dated February 1, 2022 (the “Purchase Agreement”), including Purchase Notice Shares and Commitment Shares by and between the Company and White Lion. The securities being registered hereunder include such indeterminate number of additional securities as may be issuable to prevent dilution resulting from stock splits, stock dividends or similar transactions. |
| (2) | Estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(c) under the Securities Act of 1933 ("the Securities Act") based on the average of the high and low prices of the common stock on February 10, 2022 as reported on the OTC Markets. |
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
| PRELIMINARY PROSPECTUS | SUBJECT TO COMPLETION | DATED February 11, 2022 |
Bubblr Inc.
10,500,000 Shares of Common Stock
This prospectus relates to the resale of up to 10,500,000 shares of common stock, represented as Purchase Notice Shares and Commitment Shares issuable to White Lion Capital, LLC, the selling stockholder, pursuant to a Common Stock Purchase Agreement (the “Purchase Agreement”), dated February 1, 2022, that we entered into with White Lion. The Purchase Agreement required us to issue 103,000 Commitment Shares and permits us to issue Purchase Notices to White Lion for up to Ten Million Dollars ($10,000,000) in shares of our common stock through December 31, 2022 or until $10,000,000 of such shares have been subject of a Purchase Notice.
The selling stockholder may sell all or a portion of the shares being offered pursuant to this prospectus at fixed prices, at prevailing market prices at the time of sale, at varying prices or at negotiated prices.
White Lion Capital, LLC is an underwriter within the meaning of the Securities Act of 1933, and any broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act of 1933 in connection with such sales. In such event, any commissions received by such broker-dealers or agents, and any profit on the resale of the shares purchased by them, may be deemed to be underwriting commissions or discounts under the Securities Act of 1933.
Our common stock is quoted on the OTC Markets under the symbol “BBLR.” On February 10, 2022, the reported closing price of our common stock was $0.9285 per share. Prior to this offering, there has been a very limited market for our securities. While our common stock is quoted on the OTC Markets, there has been negligible trading volume. There is no guarantee that an active trading market will develop in our securities.
We will not receive any proceeds from the sale of shares of our common stock by the selling stockholder. However, we will receive proceeds from the sale of shares of our common stock pursuant to our exercise of the Purchase Notice right offered by White Lion Capital, LLC. We will pay for expenses of this offering, except that the selling stockholder will pay any broker discounts or commissions or equivalent expenses and expenses of its legal counsel applicable to the sale of its shares.
Mr. Morris controls our company with a 60% vote on all matters regarding shareholder approval by virtue of his ownership in our Special 2019 Series A Preferred Stock. He is able to exercise significant influence over our company, including the election of directors, the approval of significant corporate transactions, and any change of control of our company.
There are no arrangements to place the funds received in an escrow, trust, or similar arrangement and the funds will be available to us following deposit into our bank account.
Investing in our shares involves a high degree of risk. BEFORE BUYING ANY SHARES, YOU SHOULD CAREFULLY READ THE DISCUSSION OF MATERIAL RISKS OF INVESTING IN OUR SHARES IN “RISK FACTORS” BEGINNING ON PAGE 5 OF THIS PROSPECTUS.
We have not authorized any dealer, salesman or other person to give any information or to make any representation other than those contained or incorporated by reference in this prospectus. You must not rely upon any information or representation not contained or incorporated by reference in this prospectus.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is February 11, 2022.
TABLE OF CONTENTS
| i |
Neither we nor the underwriter has authorized anyone to provide you with information that is different from that contained in this prospectus or in any free writing prospectus we may authorize to be delivered or made available to you. When you make a decision about whether to invest in our common stock, you should not rely upon any information other than the information in this prospectus or in any free writing prospectus that we may authorize to be delivered or made available to you. Neither the delivery of this prospectus nor the sale of our common stock means that the information contained in this prospectus or any free writing prospectus is correct after the date of this prospectus or such free writing prospectus. This prospectus is not an offer to sell or the solicitation of an offer to buy shares of common stock in any circumstances under which the offer or solicitation is unlawful.
Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity and market share, is based on information from our own management estimates and research, as well as from industry and general publications and research, surveys and studies conducted by third parties. Management estimates are derived from publicly available information, our knowledge of our industry and assumptions based on such information and knowledge, which we believe to be reasonable. Our management estimates have not been verified by any independent source, and we have not independently verified any third-party information. In addition, assumptions and estimates of our and our industry’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors.” These and other factors could cause our future performance to differ materially from our assumptions and estimates. See “Cautionary Note Regarding Forward-Looking Statements.”
This prospectus contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, especially the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of this prospectus and the financial statements and related notes appearing at the end of this prospectus before making an investment decision.
Unless the context provides otherwise, all references in this prospectus to “Bubblr Inc.” “we,” “us,” “our,” the “Company,” or similar terms, refer to Bubblr Inc. and its directly and indirectly owned subsidiaries on a consolidated basis.
Overview
Bubblr Inc. is a profoundly disruptive and genuinely innovative technology company that is proudly ethical. Our objective is to fix a broken internet economic model that currently suffers from the following failures:
| (1) | It recklessly abuses an individual's personal data; |
| (2) | It is prohibitively expensive and complex for most businesses to utilize as a marketing channel; and |
| (3) | It fails to provide sufficient revenue for content creators and online participants outside of those at the very top. |
| 1 |
Bubblr has designed and patented an alternative online search mechanism to solve these profound disconnects, resulting in a new economic platform that we believe is fundamentally sustainable and fair to users, online businesses, and all online stakeholders.
Our mission is to empower the developers of a new Internet in creating Ethical Technologies through our Intellectual Property, providing advanced digital tools that enable developers and creators to build fair-forward solutions to build a new Ethical Internet Ecosystem (EIE).
In April 2021, we received approval from the US Patent and Trademark Office for our now patented (patent # 10,977,387) alternative search mechanism to provide a new economic ecosystem that better serves all key participants online. We also have a patent on the same process granted in South Africa and New Zealand, pending patents in Canada, Australia, EU, and the United Kingdom.
Our current belief is that the patent is unique and priceless, and we are presently engaged with an independent third-party to corroborate our assertions. We have also filed various trademark applications in Europe and the UK for all our potential products. These copyright applications are all progressing as expected.
All of the consumer-based products developed are designed to deliver the presentation layer through mobile-first consumer experiences. Bubblr eschews delivery of consumer products through browsers, as they are inherently vulnerable to interference by bad actors.
We are developing our EIE by concentrating on proven value methodologies designed to exponentially increase the adoption of our IP through the following models.
| (1) | Our Venture Fund will license and provide our technology to select start-ups, teams and developers. Depending on the application, we also intend to provide early-stage funding to certain start-ups and projects that best reflect and exemplify ethical directives. This will allow us to grow a developer ecosystem and maximize reach and revenue through multiple avenues. |
| (2) | Our licensing model will provide opportunities through partnerships with select start-ups and established corporations, to further our reach and rapid development of platform applications. |
| (3) | Research & development through an Open Source Initiative designed to evolve our IP (developed under patent). This allows us to identify growth areas and expand ecosystems, platforms, and products within those areas. |
We have also 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 any developer with access to our toolkit, and will allow Bubblr to build and alter conversation search dialogues to optimize searching for information and content.
For example, allowing users to filter news articles they receive is limited to their chosen geographical area. The DDC capability can also be reused as an essential component of our open-source platform to provide generic conversation e-commerce capabilities. Our DDC offer is not a chatbot, but rather a generic data-driven questionnaire system that can be deployed within apps without requiring any extra coding. Moreover, it operates using mobile app components that use 'finger taps' rather than entering text using a keyboard.
Additionally, we have been building complex AI and machine learning to optimize search results regarding relevance and salience for searching for news. Again, these news-based search algorithms will also be reused within the open-source platform and development ecosystems and may be added to our overall Software Development Kit (SDK).
The systems architecture to support these systems has evolved. Our current belief is that a collection of technologies is the perfect platform to deliver our solutions in an open-source setting.
| 2 |
We have a combination of Postgres SQL (a scalable relational database that can integrate and manipulate JSON documents) and Elastic Search, which has become the NoSQL document database of choice for delivering very high volume document data sets with built-in machine learning and AI capabilities.
We have managed to integrate these two very different and unique database platforms in powerful ways that allow us to data-drive all our products in ways that other companies will find it difficult in terms of time and money to successfully emulate.
This means that most of our crucial API's never have to be altered with the apps we produce, or that our partners deliver. However, we still retain the capacity to radically enhance the behavior of our technology without having to issue new versions.
We have also integrated open-source NLP (Natural Language Processing) into our products and platforms to include NLP as an intrinsic part of our search functionality. Utilizing NLP and Named Entity Recognition (NER), we can significantly evaluate news stories' relevance and salience to improve any native product search experience.
Bubblr is currently in the process of filing a follow-on 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 will be more effective than the established search engines for three reasons: 1) there will be no advertising results returned in search query; 2) the user experience will be specifically designed for mobile devices, and 3) no personal data of users is collected. Details of the mobile search app will become available upon formal filing.
Our headquarters is located at 21 West 46th Street, New York, New York 10036. 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 Offering Circular on Form S-1 and should not be considered part of this or any other report filed with the SEC.
Equity Line with White Lion
Common Stock Purchase Agreement
On February 1, 2022, we entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with White Lion Capital LLC, a Nevada limited liability company (the “Investor”). Pursuant to the Purchase Agreement, the Company has the right, but not the obligation to cause the Investor to purchase up to $10 million of our common stock shares (the “Commitment Amount”) during the period beginning on the execution date of the Purchase Agreement and ending on the earlier of (i) the date on which the Investor has purchased a number of our common stock shares pursuant to the Purchase Agreement equal to the Commitment Amount or (ii) December 31, 2022, at the purchase price set forth in the Purchase Agreement (the “Purchase Price”).
Pursuant to the Purchase Agreement, the “Purchase Price” means 90% of the lowest daily VWAP of the Company’s common stock during the “Valuation Period,” which means the five (5) Business days prior to the closing date of a purchase under the Purchase Agreement.
The Company has agreed to issue 103,000 shares of Common Stock (the “Commitment Shares”) to the Investor in consideration for entering into the Purchase Agreement. If the Company fails to issue $3,000,000 in shares by December 31, 2022, Investor shall be entitled to another 103,000 commitment shares
The Purchase Agreement provides that the number of our common stock shares to be sold to the Investor will not exceed the number of shares that, when aggregated together with all other shares of our common stock which the Investor is deemed to beneficially own, would result in the Investor owning more than 4.99% of our outstanding common stock.
The Company may terminate the Purchase Agreement at any time in the event of a material breach of the Purchase Agreement by the Investor by sending written notice to the breaching party.
| 3 |
Registration Rights Agreement
On February 1, 2022, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Investor. Pursuant to the Registration Rights Agreement we agreed to use all reasonable efforts to register, and keep registered, for resale, up to 25,000,000 shares issued pursuant to the Purchase Agreement with the Securities and Exchange Commission and agreed to file within twenty (20) business days from the date of execution, covering the resale of the shares issued pursuant to the Purchase Agreement. The Company agreed to cover all of the expenses incurred in connection with such registration.
Pursuant to the Registration Rights Agreement, the Company and the Investor agreed to indemnify and hold harmless the other party against any damages incurred as a result of the Registration Rights Agreement.
THE OFFERING
The following summary of the offering contains basic information about the offering and the common stock and is not intended to be complete. It does not contain all the information that is important to you. For a more complete understanding of the common stock, please refer to the section of this prospectus entitled “Description of Capital Stock.”
| Common stock outstanding prior to this offering | 140,289,095 shares of common stock | |
| Common stock offered | 10,500,000 shares of common stock | |
| Common stock to be outstanding immediately after this offering | 150,789,095 shares of common stock. | |
| Offering price per share | White Lion (the selling stockholder identified in this prospectus) may sell all or a portion of the shares being offered pursuant to this prospectus at fixed prices and prevailing market prices at the time of sale, at varying prices or at negotiated prices. | |
| Use of proceeds | We will not receive any proceeds from the sale of the shares of our common stock by White Lion (the selling stockholder identified in this prospectus). However, we will receive proceeds from our initial sale of shares to White Lion, pursuant to the Purchase Agreement. The proceeds from the initial sale of shares will be used for the purpose of working capital and that the Board of Directors, in good faith deem to be in the best interest of the Company. See “Use of Proceeds” | |
| Duration of this offering | The offering shall terminate on the earlier of (i) the date when the sale of all 10,500,000 shares is completed, or (ii) December 31, 2022. | |
| Risk factors | Investing in our common stock involves a high degree of risk, and the purchasers of our common stock may lose all or part of their investment. Before deciding to invest in our securities, please carefully read the section entitled “Risk Factors” beginning on page 5 and the other information in this prospectus. | |
| OTC Markets trading symbol | Our common stock is quoted on the OTC Markets under the symbol “BBLR.” |
| 4 |
RISK FACTORS
Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors and all other information contained in this prospectus before purchasing our common stock. If any of the following risks actually occur, we may be unable to conduct our business as currently planned and our financial condition and results of operations could be seriously harmed. In addition, the trading price of our common stock could decline due to the occurrence of any of these risks, and you may lose all or part of your investment. The risks and uncertainties discussed below are not the only ones we face. Our business, results of operations, financial condition or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material. In assessing the risks and uncertainties described below, you should also consider carefully the other information contained in this prospectus before making a decision to invest in our common stock.
Risk Factors Related to the Financial Condition of the Company
Because our auditor has issued a going concern opinion regarding our company, there is an increased risk associated with an investment in our company.
We have continually operated at a loss with an accumulated deficit of $8,019,784 as of September 30, 2021. We have not generated significant revenues and are dependent upon obtaining financing to continue operations for the next twelve months. Our future is dependent upon our ability to obtain financing or upon future profitable operations. We reserve the right to seek additional funds through private placements of our common stock and/or through debt financing. Our ability to raise additional financing is unknown. We do not have any formal commitments or arrangements for the advancement or loan of funds. This offering is being conducted on a “best efforts” basis, which means that there is no guarantee that any minimum amount will be sold. For these reasons, our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern. As a result, there is an increased risk that you could lose the entire amount of your investment in our company.
Because we have a limited operating history, you may not be able to accurately evaluate our operations.
We have had limited operations to date. Therefore, we have a limited operating history upon which to evaluate the merits of investing in our company. Potential investors should be aware of the difficulties normally encountered by new companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the operations that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to the ability to generate sufficient cash flow to operate our business, and additional costs and expenses that may exceed current estimates. We expect to continue to incur significant losses into the foreseeable future. We recognize that if the effectiveness of our business plan is not forthcoming, we will not be able to continue business operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and it is doubtful that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.
We are dependent on outside financing for continuation of our operations.
Because we have generated limited revenues and currently operate at a loss, we are completely dependent on the continued availability of financing in order to continue our business operations. There can be no assurance that financing sufficient to enable us to continue our operations will be available to us in the future.
We will need additional funds to complete further development of our business plan to achieve a sustainable level where ongoing operations can be funded out of revenues. We anticipate that we must raise $5,000,000 for our operations for the next 12 months, and $20 million to fully implement our business plan to its fullest potential and achieve our growth plans. There is no assurance that any additional financing will be available or if available, on terms that will be acceptable to us.
Our failure to obtain future financing or to produce levels of revenue to meet our financial needs could result in our inability to continue as a going concern and, as a result, our investors could lose their entire investment.
| 5 |
As a growing company, we have yet to achieve a profit and may not achieve a profit in the near future, if at all.
We have not yet produced any significant revenues or profits and may not in the near future, if at all. Further, many of our competitors have a significantly larger industry presence and revenue stream but have yet to achieve profitability. Our ability to continue as a going concern is dependent upon raising capital from financing transactions, increasing revenue and keeping operating expenses below our revenue levels in order to achieve positive cash flows, none of which can be assured.
Risk Factors Related to Business of the Company
Our operating results may fluctuate, which could have a negative impact on our ability to grow our client base, establish sustainable revenues and succeed overall.
Our results of operations may fluctuate as a result of a number of factors, some of which are beyond our control including but not limited to:
| § | general economic conditions in the geographies and industries where we sell our services and conduct operations; legislative policies where we sell our services and conduct operations; |
| § | the budgetary constraints of our customers; seasonality; |
| § | success of our strategic growth initiatives; |
| § | costs associated with the launching or integration of new or acquired businesses; |
| § | timing of new product introductions by us, our suppliers and our competitors; product and service mix, availability, utilization and pricing; |
| § | the mix, by state and country, of our revenues, personnel and assets; |
| § | movements in interest rates or tax rates; |
| § | changes in, and application of, accounting rules; |
| § | changes in the regulations applicable to us; |
| § | litigation matters. |
As a result of these factors, we may not succeed in our business and we could go out of business.
In the event that we are unable to successfully compete in the mobile-app platform industry, we may not be able to achieve profitable operations.
We face substantial competition in what we’re looking to disrupt. Due to our small size, it can be assumed that many of our competitors have significantly greater financial, technical, marketing and other competitive resources. Accordingly, these competitors may have already begun to establish brand-recognition with consumers. We will attempt to compete against these competitors by developing features that exceed the features offered by competitors. However, we cannot assure you that our products will outperform competing products or those competitors will not develop new products that exceed what we provide. In addition, we may face competition based on price. If our competitors lower the prices on their products, then it may not be possible for us to market our products at prices that are economically viable. Increased competition could result in:
| § | Lower than projected revenues; |
| § | Price reductions and lower profit margins; |
| § | The inability to develop and maintain our products with features and usability sought by potential customers. |
Any one of these results could adversely affect our business, financial condition and results of operations. In addition, our competitors may develop competing products that achieve greater market acceptance. It is also possible that new competitors may emerge and acquire significant market share. Our inability to achieve sales and revenue due to competition will have an adverse effect on our business, financial condition and results of operations.
| 6 |
If the market for our open-source platform does not experience significant growth or if our projects do not achieve broad acceptance, we will not be able to sustain or grow our revenues.
We hope to achieve revenues from our open-source partnerships. We cannot accurately predict, however, future growth rates or the size of the market for application in the United States, United Kingdom and other markets we engage in. Demand for our platform and IP may not occur as anticipated, or may decrease, either generally or in specific geographic markets, during particular time periods. The expansion of our mobile application in the market depends on a number of factors, such as:
| § | the cost, performance and appearance of our mobile application offered by our competitors; |
| § | public perceptions regarding our mobile application and the effectiveness and value of it; |
| § | customer satisfaction with our mobile application; and |
| § | marketing efforts and publicity regarding the needs for application and the public demand for it. |
Even if our platform gains wide market acceptance, we may not adequately address market requirements and may not be able to expand market acceptance. If our products do not achieve wide market acceptance, we may not be able to achieve our anticipated level of growth, we may not achieve revenues and results of operations would suffer.
If we are unable to gauge trends and react to changing partners preferences in a timely manner, our sales will decrease, and our business may fail.
We believe our success depends in substantial part on our ability to offer our intellectual property and our supporting platform that reflect current needs and anticipate, gauge and react to changing partner and consumer demands in a timely manner. Our business is vulnerable to changes in partner and consumer preferences. If we misjudge their needs for our platform, our ability to generate sales could be impaired resulting in the failure of our business. There are no assurances that our mobile application will be successful, and in that regard, any unsuccessful consumer reaction could also adversely affect our business.
If we are unable to successfully manage growth, our operations could be adversely affected.
Our progress is expected to require the full utilization of our management, financial and other resources, which to date has occurred with limited working capital. Our ability to manage growth effectively will depend on our ability to improve and expand operations, including our financial and management information systems, and to recruit, train and manage sales personnel. There can be no absolute assurance that management will be able to manage growth effectively.
If we do not properly manage the growth of our business, we may experience significant strains on our management and operations and disruptions in our business. Various risks arise when companies and industries grow quickly. If our business or industry grows too quickly, our ability to meet customer demand in a timely and efficient manner could be challenged. We may also experience development delays as we seek to meet increased demand for our products. Our failure to properly manage the growth that we or our industry might experience could negatively impact our ability to execute on our operating plan and, accordingly, could have an adverse impact on our business, our cash flow and results of operations, and our reputation with our current or potential customers.
We may fail to successfully integrate our acquisitions or otherwise be unable to benefit from pursuing acquisitions.
We believe there are meaningful opportunities to grow through acquisitions and joint ventures across all product categories and we expect to continue a strategy of selectively identifying and acquiring businesses with complementary products. We may be unable to identify, negotiate, and complete suitable acquisition opportunities on reasonable terms. There can be no assurance that any business acquired by us will be successfully integrated with our operations or prove to be profitable to us. We may incur future liabilities related to acquisitions. Should any of the following problems, or others, occur as a result of our acquisition strategy, the impact could be material:
| § | difficulties integrating personnel from acquired entities and other corporate cultures into our business; |
| § | difficulties integrating information systems; |
| § | the potential loss of key employees of acquired companies; |
| § | the assumption of liabilities and exposure to undisclosed or unknown liabilities of acquired companies; or |
| § | the diversion of management attention from existing operations |
| 7 |
Our commercial success depends significantly on our ability to develop and commercialize our open-source platform without infringing the intellectual property rights of third parties.
Our commercial success will depend, in part, on operating our business without infringing the trademarks or proprietary rights of third parties. Third parties that believe we are infringing on their rights could bring actions against us claiming damages and seeking to enjoin the development, marketing and distribution of our products. If we become involved in any litigation, it could consume a substantial portion of our resources, regardless of the outcome of the litigation. If any of these actions are successful, we could be required to pay damages and/or to obtain a license to continue to develop or market our products, in which case we may be required to pay substantial royalties. However, any such license may not be available on terms acceptable to us or at all. Ultimately, we could be prevented from commercializing a product or forced to cease some aspect of our business operations as a result of patent infringement claims, which would harm our business.
A decline in general economic condition could lead to reduced consumer/business adoption and could negatively impact our business operation and financial condition, which could have a material adverse effect on our business, financial condition and results of operations.
Our operating and financial performance may be adversely affected by a variety of factors that influence the general economy. Consumer search habits are affected by, among other things, prevailing economic conditions, levels of unemployment, salaries and wage rates, prevailing interest rates, income tax rates and policies, consumer confidence and consumer perception of economic conditions. In addition, consumer purchasing patterns may be influenced by consumers’ disposable income. In the event of an economic slowdown, consumer search habits could be adversely affected and we could experience lower net sales than expected on a quarterly or annual basis which could have a material adverse effect on our business, financial condition and results of operations.
The success of our business depends on our ability to maintain and enhance our reputation and brand.
We believe that our reputation in the online marketplace is of significant importance to the success of our business. A well-recognized brand is critical to increasing our customer base and, in turn, increasing our revenue. Since the industry is highly competitive, our ability to remain competitive depends to a large extent on our ability to maintain and enhance our reputation and brand, which could be difficult and expensive. To maintain and enhance our reputation and brand, we need to successfully manage many aspects of our business, such as cost-effective marketing campaigns to increase brand recognition and awareness in a highly competitive market. We will continue to conduct various marketing and brand promotion activities. We cannot assure you, however, that these activities will be successful and achieve the brand promotion goals we expect. If we fail to maintain and enhance our reputation and brand, or if we incur excessive expenses in our efforts to do so, our business, financial conditions and results of operations could be adversely affected.
Reliance on information technology means a significant disruption could affect our communications and operations.
We increasingly rely on information technology systems for our internal communications, controls, reporting and relations with customers and suppliers and information technology is becoming a significantly important tool for our sales staff. Our marketing and distribution strategy are dependent upon our ability to closely monitor consumer and market trends on a highly specified level, for which we are reliant on our highly sophisticated data tracking systems, which are susceptible to disruption or failure. In addition, our reliance on information technology exposes us to cyber-security risks, which could have a material adverse effect on our ability to compete. Security and privacy breaches may expose us to liability and cause us to lose customers or may disrupt our relationships and ongoing transactions with other entities with whom we contract throughout our supply chain. The failure of our information systems to function as intended, or the penetration by outside parties’ intent on disrupting business processes, could result in significant costs, loss of revenue, assets or personal or other sensitive data and reputational harm.
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Security and privacy breaches may expose us to liability and cause us to lose customers.
Federal and state laws require us to safeguard our wholesalers’ and retailers’ financial information, including credit information. Although we have established security procedures to protect against identity theft and the theft of our customers’ and distributors’ financial information, our security and testing measures may not prevent security breaches and breaches of privacy may occur and could harm our business. Typically, we rely on encryption and authentication technology licensed from third parties to enhance transmission security of confidential information in relation to financial and other sensitive information that we have on file. Advances in computer capabilities, new discoveries in the field of cryptography, inadequate facility security or other developments may result in a compromise or breach of the technology used by us to protect customer data. Any compromise of our security could harm our reputation or financial condition and, therefore, our business. In addition, a party who is able to circumvent our security measures or exploit inadequacies in our security measures, could, among other effects, misappropriate proprietary information, cause interruptions in our operations or expose customers and other entities with which we interact to computer viruses or other disruptions. Actual or perceived vulnerabilities may lead to claims against us. To the extent the measures we have taken prove to be insufficient or inadequate, we may become subject to litigation or administrative sanctions, which could result in significant fines, penalties or damages and harm to our reputation.
We may be unable to support our technology to further scale our operations successfully.
Our plan is to grow rapidly through further integration of our technology in partnerships in with our open-source platform and other partnership electronic platforms. Our growth will place significant demands on our management and technology development, as well as our financial, administrative and other resources. We cannot guarantee that any of the systems, procedures and controls we put in place will be adequate to support the commercialization of our operations. Our operating results will depend substantially on the ability of our officers and key employees to manage changing business conditions and to implement and improve our financial, administrative and other resources. If we are unable to respond to and manage changing business conditions, or the scale of our products, services and operations, then the quality of our services, our ability to retain key personnel and our business could be harmed.
Developing and implementing new and updated applications, features and services for our portals may be more difficult than expected, may take longer and cost more than expected and may not result in sufficient increases in revenue to justify the costs.
Attracting and retaining partner developers and users of our open-source platform requires us to continue to improve the technology underlying those portals and to continue to develop new and updated applications, features and services. If we are unable to do so on a timely basis or if we are unable to implement new applications, features and services without disruption to our existing ones, we may lose potential users and clients. The costs of development of these enhancements may negatively impact our ability to achieve profitability.
We rely on a combination of internal development, strategic relationships, licensing and acquisitions to develop our open-source platform, portals and related applications, features and services. Our development and/or implementation of new technologies, applications, features and services may cost more than expected, may take longer than originally expected, may require more testing than originally anticipated and may require the acquisition of additional personnel and other resources. There can be no assurance that the revenue opportunities from any new or updated technologies, applications, features or services will justify the amounts spent.
Our success is dependent in part on obtaining, maintaining and enforcing our proprietary rights and our ability to avoid infringing on the proprietary rights of others.
We seek patent protection for those inventions and technologies for which we believe such protection is suitable and is likely to provide a competitive advantage to us. We have a patent in South Africa and the United States with several patents pending in other locations. Because patent applications in the United States are maintained in secrecy until either the patent application is published or a patent is issued, we may not be aware of third-party patents, patent applications and other intellectual property relevant to our products that may block our use of our intellectual property or may be used in third-party products that compete with our products and processes. In the event a competitor or other party successfully challenges our products, processes, patents or licenses or claims that we have infringed upon their intellectual property, we could incur substantial litigation costs defending against such claims, be required to pay royalties, license fees or other damages or be barred from using the intellectual property at issue, any of which could have a material adverse effect on our business, operating results and financial condition.
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We also rely substantially on trade secrets, proprietary technology, nondisclosure and other contractual agreements, and technical measures to protect our technology, application, design, and manufacturing know-how, and work actively to foster continuing technological innovation to maintain and protect our competitive position. We cannot assure you that steps taken by us to protect our intellectual property and other contractual agreements for our business will be adequate, that our competitors will not independently develop or patent substantially equivalent or superior technologies or be able to design around patents that we may receive, or that our intellectual property will not be misappropriated.
Our business will suffer if our network systems, or open-source platform fails or become unavailable.
A reduction in the performance, reliability and availability of our network infrastructure would harm our ability to distribute our products to our users, as well as our reputation and ability to attract and retain customers. Our systems and operations could be damaged or interrupted by fire, flood, power loss, telecommunications failure, Internet breakdown, earthquake and similar events. Our systems could also be subject to viruses, break-ins, sabotage, acts of terrorism, acts of vandalism, hacking, cyber-terrorism and similar misconduct. We might not carry adequate business interruption insurance to compensate us for losses that may occur from a system outage. Any system error or failure that causes interruption in availability of our product or an increase in response time could result in a loss of potential customers, which could have a material adverse effect on our business, financial condition and results of operations. If we suffer sustained or repeated interruptions, then our products and services could be less attractive to our users and our business would be materially harmed.
We face significant competition for developers, users, advertisers, and distributors.
Our intellectual property can face significant competition from online search engines, sites offering integrated internet products and services, social media and networking sites, e-commerce sites, companies providing analytics, monetization and marketing tools for mobile and desktop developers, and digital, broadcast and print media. A number of these competitors are significantly larger than we are and have access to vastly greater financial resources. Additionally, in a number of international markets, we face substantial competition from local Internet service providers and other entities that offer search, communications, and other commercial services.
A number of our competitors offer products and services that directly compete for users of our platform offerings. Further, emerging start-ups may be able to innovate and provide new products and services faster than we can. In addition, competitors may consolidate or collaborate with each other, and new competitors may enter the market. Some of our competitors in international markets have a substantial competitive advantage over us because they have dominant market share in their territories, have greater local brand recognition, are focused on a single market, are more familiar with local tastes and preferences, or have greater regulatory and operational flexibility due to the fact that we may be subject to both U.S. and foreign regulatory requirements.
If our competitors are more successful than we are in developing and deploying compelling products or in attracting and retaining users, developers, or distributors, our users and growth rates could decline.
Changes in regulations or user concerns regarding privacy and protection of user data, or any failure to comply with such laws, could adversely affect our business.
Federal, state, and international laws and regulations govern the collection, use, retention, disclosure, sharing and security of data that we receive from and about our users. The use of consumer data by online service providers is a topic of active interest among federal, state, and international regulatory bodies, and the regulatory environment is unsettled. Many states have passed laws requiring notification to users where there is a security breach for personal data, such as California’s Information Practices Act. We face similar risks in international markets where our products and services are offered. Any failure, or perceived failure, by us to comply with or make effective modifications to our policies, or to comply with any applicable federal, state, or international privacy, data-retention or data-protection-related laws, regulations, orders or industry self-regulatory principles could result in proceedings or actions against us by governmental entities or others, a loss of user confidence, damage to our business and brand, and a loss of users, which could potentially have an adverse effect on our business.
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In addition, various federal, state and foreign legislative or regulatory bodies may enact new or additional laws and regulations concerning privacy, data retention, data transfer and data protection issues, including laws or regulations mandating disclosure to domestic or international law enforcement bodies, which could adversely impact our business, our brand or our reputation with users. For example, some countries are considering or have enacted laws mandating that user data regarding users in their country be maintained in their country. In addition, there currently is a data protection regulation applicable to member states of the European Union that includes operational and compliance requirements that are different than those currently in place and that also includes significant penalties for non-compliance.
The interpretation and application of privacy, data protection, data transfer and data retention laws and regulations are often uncertain and in flux in the United States and internationally. These laws may be interpreted and applied inconsistently from country to country and inconsistently with our current policies and practices, complicating long-range business planning decisions. If privacy, data protection, data transfer or data retention laws are interpreted and applied in a manner that is inconsistent with our current policies and practices, we may be fined or ordered to change our business practices in a manner that adversely impacts our operating results. Complying with these varying international requirements could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business and operating results.
We may be subject to legal liability associated with providing online services or content.
We host and provide a wide variety of services and technology products that enable and encourage individuals and businesses to exchange information; upload or otherwise generate photos, videos, text, and other content; advertise products and services; conduct business; and engage in various online activities both domestically and internationally. The law relating to the liability of providers of online services and products for activities of their users is currently unsettled both within the United States and internationally. We may be subject to domestic or international actions alleging that certain content we have generated or third-party content that we have made available within our services violates laws in domestic and international jurisdictions.
It is also possible that if any information provided directly by us contains errors or is otherwise wrongfully provided to users, third parties could make claims against us. For example, we offer web-based e-mail services, which expose us to potential risks, such as liabilities or claims, by our users and third parties, resulting from unsolicited e-mail, lost or misdirected messages, illegal or fraudulent use of e-mail, alleged violations of policies, property interests, or privacy protections, including civil or criminal laws, or interruptions or delays in e-mail service. We may also face purported consumer class actions or state actions relating to our online services, including our fee-based services. In addition, our customers, third parties, or government entities may assert claims or actions against us if our online services or technologies are used to spread or facilitate malicious or harmful code or applications.
Investigating and defending these types of claims are expensive, even if the claims are without merit or do not ultimately result in liability, and could subject us to significant monetary liability or cause a change in business practices that could negatively impact our ability to compete.
Our business depends on continued and unimpeded access to the Internet by us and our users. Internet access providers may be able to block, degrade, or charge for access to certain of our products and services, which could lead to additional expenses and the loss of users and advertisers.
Our products and services depend on the ability of our users to access the Internet, and certain of our products require significant bandwidth to work effectively. Currently, this access is provided by companies that have significant market power in the broadband and internet access marketplace, including incumbent telephone companies, cable companies, mobile communications companies, and government-owned service providers. Some of these providers may take, or have stated that they may take, measures that could degrade, disrupt, or increase the cost of user access to certain of our products by restricting or prohibiting the use of their infrastructure to support or facilitate our offerings, or by charging increased fees to us or our users to provide our offerings. Such interference could result in a loss of existing users and advertisers, and increased costs, and could impair our ability to attract new users and advertisers, thereby harming our revenues and growth. The adoption of any laws or regulations that limit access to the Internet by blocking, degrading or charging access fees to us or our users for certain services could decrease the demand for, or the usage of, our products and services, increase our cost of doing business and adversely affect our operating results.
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Tax Risks
We are subject to tax and regulatory audits which could result in the imposition of liabilities that may or may not have been reserved. We are subject to audits by taxing and regulatory authorities with respect to certain of our income and operations. These audits can cover periods for several years prior to the date the audit is undertaken and could result in the imposition of liabilities, interest and penalties if our positions are not accepted by the auditing entity.
We may be unable to achieve some, all or any of the benefits that we expect to achieve from our plan to expand our operations.
In the future we may require additional financing for capital requirements and growth initiatives. Accordingly, we will depend on our ability to generate cash flows from operations and to borrow funds and issue securities in the capital markets to maintain and expand our business. We may need to incur debt on terms and at interest rates that may not be as favorable. If additional financing is not available when required or is not available on acceptable terms, we may be unable to operate our business as planned or at all, fund our expansion, successfully promote our business, develop or enhance our products and services, take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our business, financial condition and results of operations
Risks Related with Management and Control Persons
We are dependent on the continued services of our Chief Executive Officer, Chief Commercial Officer, Chief Technology Officer and Chairman and if we fail to keep them or fail to attract and retain qualified senior executive and key technical personnel, our business will not be able to expand.
We are dependent on the continued availability of Rik Willard, our CEO, Steven Saunders, our CCO, Matthew Loeb, our Chairman, Stephen Morris, our Chief Technology Officer, and the availability of new employees to implement our business plans. The market for skilled employees is highly competitive, especially for employees in our industry. Although we expect that our planned compensation programs will be intended to attract and retain the employees required for us to be successful, there can be no assurance that we will be able to retain the services of all our key employees or a sufficient number to execute our plans, nor can there be any assurance we will be able to continue to attract new employees as required.
Our personnel may voluntarily terminate their relationship with us at any time, and competition for qualified personnel is intense. The process of locating additional personnel with the combination of skills and attributes required to carry out our strategy could be lengthy, costly and disruptive.
If we lose the services of key personnel or fail to replace the services of key personnel who depart, we could experience a severe negative effect on our financial results and stock price. The loss of the services of any key personnel, marketing or other personnel or our failure to attract, integrate, motivate and retain additional key employees could have a material adverse effect on our business, operating and financial results and stock price.
Our largest shareholder, former officer and director and a related party, Stephen Morris, has substantial control over us and our policies and will be able to influence corporate matters.
Stephen Morris is our Chief Technology Officer and Director of our company. Mr. Morris, whose interests may differ from other stockholders, is also our largest stockholder and has the ability to exercise significant control over us. Presently, he beneficially owns the majority of our common stock and he is the sole shareholder of our Special 2019 Series A Preferred Stock. He is able to exercise significant influence over all matters requiring approval by our stockholders, including the election of directors, the approval of significant corporate transactions, and any change of control of our company. He could prevent transactions, which would be in the best interests of the other shareholders. Mr. Morris’ interests may not necessarily be in the best interests of the shareholders in general.
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The elimination of monetary liability against our directors, officers and employees under our Articles of Incorporation and the existence of indemnification rights to our directors, officers and employees may result in substantial expenditures by our Company and may discourage lawsuits against our directors, officers and employees.
Our Articles of Incorporation contain provisions that eliminate the liability of our directors for monetary damages to our Company and shareholders. Our bylaws also require us to indemnify our officers and directors. We may also have contractual indemnification obligations under our agreements with our directors, officers and employees. The foregoing indemnification obligations could result in our company incurring substantial expenditures to cover the cost of settlement or damage awards against directors, officers and employees that we may be unable to recoup. These provisions and resulting costs may also discourage our company from bringing a lawsuit against directors, officers and employees for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our shareholders against our directors, officers and employees even though such actions, if successful, might otherwise benefit our Company and shareholders.
Our officers and directors have limited experience managing a public company.
Our officers and directors have limited experience managing a public company. Consequently, we may not be able to raise any funds or run our public company successfully. Our executive’s officer’s and director’s lack of experience of managing a public company could cause you to lose some or all of your investment.
Risks Related to the Offering and the Market for our Stock
We will likely conduct further offerings of our equity securities in the future, in which case your proportionate interest may become diluted.
We will likely be required to conduct equity offerings in the future to finance our current projects or to finance subsequent projects that we decide to undertake. If our common stock shares are issued in return for additional funds, the price per share could be lower than that paid by our current shareholders. We anticipate continuing to rely on equity sales of our common stock shares in order to fund our business operations. If we issue additional common stock shares or securities convertible into shares of our common stock, your percentage interest in us could become diluted.
We have the right to issue additional common stock and preferred stock without consent of stockholders. This would have the effect of diluting investors’ ownership and could decrease the value of their investment.
We have additional authorized, but unissued shares of our common stock that may be issued by us for any purpose without the consent or vote of our stockholders that would dilute stockholders’ percentage ownership of our company.
In addition, our certificate of incorporation authorizes the issuance of shares of preferred stock and/or the conversion of existing outstanding preferred stock into common stock, the rights, preferences, designations and limitations of which may be set by the Board of Directors. Our certificate of incorporation has authorized issuance of up 3,000,000,000 shares of common stock and up to 25,000,000 shares of preferred stock in the discretion of our Board.
The shares of authorized but unissued preferred stock may be issued upon Board of Directors approval; no further stockholder action is required. If issued, the rights, preferences, designations and limitations of such preferred stock would be set by our Board and could operate to the disadvantage of the outstanding common stock. Such terms could include, among others, preferences as to dividends and distributions on liquidation.
If a market for our common stock does not develop, shareholders may be unable to sell their shares.
Our common stock is quoted under the symbol “BBLR” on the OTC Markets, an electronic inter-dealer quotation medium for equity securities. We do not currently have an active trading market. There can be no assurance that an active and liquid trading market will develop or, if developed, that it will be sustained.
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Our securities are very thinly traded. Accordingly, it may be difficult to sell shares of our common stock without significantly depressing the value of the stock. Unless we are successful in developing continued investor interest in our stock, sales of our stock could continue to result in major fluctuations in the price of the stock.
Although we expect to apply to list our common stock on The Nasdaq Capital Market, an active trading market may not develop following the completion of this offering or, if developed, may not be sustained. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair value of your shares. An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.
The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control.
Our stock price is subject to a number of factors, including:
| § | Technological innovations or new products and services by us or our competitors; |
| § | Government regulation of our products and services; |
| § | The establishment of partnerships with other telecom companies; |
| § | Intellectual property disputes; |
| § | Additions or departures of key personnel; |
| § | Sales of our common stock; |
| § | Our ability to integrate operations, technology, products and services; |
| § | Our ability to execute our business plan; |
| § | Operating results below or exceeding expectations; |
| § | Whether we achieve profits or not; |
| § | Loss or addition of any strategic relationship; |
| § | Industry developments; |
| § | Economic and other external factors; and |
| § | Period-to-period fluctuations in our financial results. |
Our stock price may fluctuate widely as a result of any of the above. In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.
We may not be required to file periodic and other reports after a period if we fail to file a form 8-A.
We will be required to file annual and quarterly reports with the Securities and Exchange Commission after the date this offering circular is qualified; however, we will not be subject to the proxy or other rules of the Securities Exchange Act of 1934, unless we file a form 8A or similar registration statement.
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Shortly following this offering, we intend voluntarily to file a registration statement on Form 8-A which will subject us to all of the full reporting requirements of the 1934 Act. This will require us to file quarterly and annual reports with the SEC and will also subject us to the proxy rules of the SEC. In addition, our officers, directors and 10% stockholders will be required to submit reports to the SEC on their stock ownership and stock trading activity. We are not required under Section 12(g) or otherwise to become a mandatory 1934 Act filer unless we have more than 500 shareholders and total assets of more than $10 million.
Potential investors may be less interested in purchasing our stock if we are not required to report to the SEC and the hold period for our securities under Rule 144 would increase from six months to one year.
Because we are subject to the “Penny Stock” rules, the level of trading activity in our stock may be reduced.
The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be any listed, trading equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock, the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules which may increase the difficulty Purchasers may experience in attempting to liquidate such securities.
We do not expect to pay dividends in the foreseeable future. Any return on investment may be limited to the value of our common stock.
We do not anticipate paying cash dividends on our common stock in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting it at such time as the board of directors may consider relevant. If we do not pay dividends, our common stock may be less valuable because a return on your investment will occur only if our stock price appreciates.
Because we lack certain internal controls over financial reporting in that we do not have an audit committee and our Board of Directors has no technical knowledge of U.S. GAAP and internal control of financial reporting and relies upon the Company’s financial personnel to advise the Board on such matters, we are subject to increased risk related to financial statement disclosures.
We lack certain internal controls over financial reporting in that we do not yet have an audit committee and our Board of Directors has little technical knowledge of U.S. GAAP and internal control of financial reporting and relies upon the Company’s financial personnel and Accounting firm to advise the Board on such matters. Accordingly, we are subject to increased risk related to financial statement disclosures.
As a smaller reporting company and will be exempt from certain disclosure requirements, which could make our Common Stock less attractive to potential investors.
Rule 12b-2 of the Exchange Act defines a “smaller reporting company” as an issuer that is not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that:
| ● | had a public float of less than $250 million as of the last business day of our most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of our voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or | |
| ● | in the case of an initial registration statement under the Securities Act, or the Exchange Act, for shares of our common equity, had a public float of less than $250 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public offering price of the shares; or | |
| ● | in the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero, had annual revenues of less than $100 million during the most recently completed fiscal year for which audited financial statements are available. |
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As a smaller reporting company, we will not be required and may not include a Compensation Discussion and Analysis section in our proxy statements; we will provide only two years of financial statements; and we need not provide the table of selected financial data. We also will have other “scaled” disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies which could make our Common Stock less attractive to potential investors, which could make it more difficult for our stockholders to sell their shares.
Our existing stockholders may experience significant dilution from the sale of our common stock pursuant to the White Lion Purchase Agreement.
The sale of our common stock to White Lion in accordance with the Purchase Agreement may have a dilutive impact on our shareholders. As a result, the market price of our common stock could decline. In addition, the lower our stock price is at the time we exercise our put options, the more shares of our common stock we will have to issue to White Lion in order to exercise a put under the Purchase Agreement. If our stock price decreases, then our existing shareholders would experience greater dilution for any given dollar amount raised through the offering.
The perceived risk of dilution may cause our stockholders to sell their shares, which may cause a decline in the price of our common stock. Moreover, the perceived risk of dilution and the resulting downward pressure on our stock price could encourage investors to engage in short sales of our common stock. By increasing the number of shares offered for sale, material amounts of short selling could further contribute to progressive price declines in our common stock.
The issuance of shares pursuant to the White Lion Purchase Agreement may have significant dilutive effect.
Depending on the number of shares we issue pursuant to the White Lion Purchase Agreement, it could have a significant dilutive effect upon our existing shareholders. Although the number of shares that we may issue pursuant to the Purchase Agreement will vary based on our stock price (the higher our stock price, the less shares we have to issue), there may be a potential dilutive effect to our shareholders, based on different potential future stock prices, if the full amount of the Purchase Agreement is realized. Dilution is based upon common stock put to White Lion and the stock price discounted to 90% of the lowest daily VWAP of our common stock during the five (5) business days beginning on the date on which we deliver a put notice to White Lion.
White Lion will pay less than the then-prevailing market price of our common stock which could cause the price of our common stock to decline.
Our common stock to be issued under the White Lion Purchase Agreement will be purchased at 90% of the lowest daily VWAP of our common stock during the five (5) business days beginning on the date on which we deliver a put notice to White Lion
White Lion has a financial incentive to sell our shares immediately upon receiving them to realize the profit between the discounted price and the market price. If White Lion sells our shares, the price of our common stock may decrease. If our stock price decreases, White Lion may have further incentive to sell such shares. Accordingly, the discounted sales price in the Purchase Agreement may cause the price of our common stock to decline.
We may not have access to the full amount under the Purchase Agreement.
Due to the floating offering price, we are not able to determine the exact number of shares that we will issue under the Purchase Agreement.
Our ability to draw down funds and sell shares under the Purchase Agreement with White Lion requires that the registration statement of which this prospectus forms a part to be declared effective and continue to be effective. The registration statement of which this prospectus forms a part registers the resale of 10,500,000 shares issuable under the Purchase Agreement with White Lion, and our ability to sell any remaining shares issuable under the investment with White Lion is subject to our ability to prepare and file one or more additional registration statements registering the resale of these shares. These registration statements may be subject to review and comment by the staff of the Securities and Exchange Commission and will require the consent of our independent registered public accounting firm. Therefore, the timing of effectiveness of these registration statements cannot be assured. The effectiveness of these registration statements is a condition precedent to our ability to sell all of the shares of our common stock to White Lion under the Purchase Agreement. Even if we are successful in causing one or more registration statements registering the resale of some or all of the shares issuable under the purchase agreement with White Lion to be declared effective by the Securities and Exchange Commission in a timely manner, we may not be able to sell the shares unless certain other conditions are met. For example, we might have to increase the number of our authorized shares in order to issue the shares to White Lion. Increasing the number of our authorized shares will require board and stockholder approval. Accordingly, because our ability to draw down any amounts under the Purchase Agreement with White Lion is subject to a number of conditions, there is no guarantee that we will be able to draw down any portion or all of the proceeds of $10,000,000 under the investment with White Lion.
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If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.
The trading market for our common stock will, to some extent, depend on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our share price would likely decline. If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.
We may be subject to securities litigation, which is expensive and could divert management attention.
In the past companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could seriously hurt our business. Any adverse determination in litigation could also subject us to significant liabilities.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future results of operations and financial position, business strategy, prospective products, product approvals, timing and likelihood of success, plans and objectives of management for future operations, and future results of current and anticipated products are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this prospectus are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this prospectus and are subject to a number of risks, uncertainties and assumptions described under the sections in this prospectus entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this prospectus. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for us to predict all risk factors and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
This prospectus also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. In addition, projections, assumptions and estimates of our future performance and the future performance of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of our Common Stock by White Lion (the selling stockholder identified in this prospectus). However, we will receive proceeds from our initial sale of shares to White Lion, pursuant to the Purchase Agreement. The proceeds from the initial sale of shares will be used for the purpose of working capital or for other purposes that the Board of Directors, in good faith deem to be in the best interest of the Company.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
Our common stock is quoted under the symbol “BBLR” on the OTC Markets, an electronic inter-dealer quotation medium for equity securities. We do not currently have an active trading market. There can be no assurance that an active and liquid trading market will develop or, if developed, that it will be sustained.
Our securities are very thinly traded. Accordingly, it may be difficult to sell shares of our common stock without significantly depressing the value of the stock. Unless we are successful in developing continued investor interest in our stock, sales of our stock could continue to result in major fluctuations in the price of the stock.
Although we expect to apply to list our common stock on The Nasdaq Capital Market, an active trading market may not develop following the completion of this offering or, if developed, may not be sustained. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair value of your shares. An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.
Holders
As of February 11, 2022 , we had 140,289,095 shares of our common stock outstanding, and there were approximately 718 stockholders of record of our common stock. There was one holder of the Company’s one share outstanding of Special 2019 Series A Preferred Stock.
Common Stock
Our authorized common stock consists of 3,000,000,000 shares of common stock, par value $0.001 per share. As of February 11, 2022 , there were 140,289,095 shares of our common stock issued and outstanding.
Preferred Stock
Our authorized preferred stock consists of 25,000,000 shares of preferred stock, par value $0.001 per share. As of February 11, 2022 , there was 1 share of our preferred stock issued and outstanding.
We have one designated class of preferred stock known as Special 2019 Series A Preferred Stock. The holders of Special 2019 Series A Preferred Stock are entitled to vote 60% of all votes (including, but not limited to, Common Stock, and Preferred Stock (including on an as converted basis)) entitled to vote at each meeting of stockholders of the Corporation (and written actions of stockholders in lieu of meetings) with respect to any and all matters presented to the stockholders of the Corporation for their action or consideration.
Options and Warrants
None.
Debt Securities
In January 2021 the Company commenced an offering for a convertible promissory note. The offering closed June 30, 2021. Funds raised as of December 31, 2021 was $2,112,150, less an original issuance discount of $104,572. The notes mature after eighteen (18) months from issue or on the following events:
Voluntary Conversion. Investor may, at his/her/its sole option, at any time after nine (9) months, convert all or any portion of the accrued interest and unpaid principal balance of this Note into fully paid and non- assessable shares of common stock of the Company at the conversion price of $1.15 per share.
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Mandatory Conversion. Upon sixty (60) days from the date the Company files a registration statement with the Securities and Exchange Commission (the “SEC”), all of the accrued interest and unpaid principal balance of this Note shall automatically convert into fully paid and non- assessable shares of common stock of the Company at the conversion price of $1.15 per share.
Interest at the rate equal to 2% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days will be due on all outstanding notes.
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 was $175,630. The notes mature after eighteen (18) months from issue or on the following events:
Voluntary Conversion. Investor may, at his/her/its sole option, at any time after nine (9) months, convert all or any portion of the accrued interest and unpaid principal balance of this Note into fully paid and non- assessable shares of common stock of the Company at the conversion price of $1.15 per share.
Mandatory Conversion. Upon sixty (60) days from the date the Company files a Form 10 registration statement with the Securities and Exchange Commission (the “SEC”), all of the accrued interest and unpaid principal balance of this Note shall automatically convert into fully paid and non- assessable shares of common stock of the Company at the conversion price of $1.15 per share.
Interest at the rate equal to 2% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days will be due on all outstanding notes.
Interest accrual commenced December 1, 2021 upon the closing of the convertible promissory note offering.
Dividends
The Company has not declared any cash dividends since inception and does not anticipate paying any cash dividends in the foreseeable future. The payment of cash dividends is within the discretion of the Board of Directors and will depend on the Company’s earnings, capital requirements, financial condition, and other relevant factors. There are no restrictions that currently limit the Company’s ability to pay cash, or other, dividends on its Common Stock other than those generally imposed by applicable state law.
Equity Compensation Plans
We have no equity compensation plans.
Recent Sales of Unregistered Securities
In the two years preceding the filing of this annual report, we have issued and sold the following securities that were not registered under the Securities Act of 1933, as amended:
On September 9, 2020, we issued 127,811,328 shares of common stock in connection with the acquisition of Bubblr Limited.
On September 9, 2020, we issued 4,574,453 shares of common stock in connection with the acquisition of Bubblr Limited.
On January 18, 2021, we issued 2,650 shares of common stock in conversion of the Series B Preferred Stock.
On January 31, 2021, we issued 330,120 shares of common stock for services.
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On May 3, 2021, we issued 7,000,000 shares of common stock for the settlement of debt.
On June 28 2021, we issued 204,080 shares of common stock for services.
On October 11, 2021, we issued 51,020 shares to Neeta Shah, as per her consulting agreement October 01
On October 11, 2021, we issued 33,000 shares for Investor Relation services, as per the contract signed July 1, 2021
The offers, sales, and issuances of the securities described above were deemed to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder as transactions by an issuer not involving a public offering. The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions was an accredited or sophisticated person and had adequate access, through employment, business or other relationships, to information about us.
DILUTION
Not applicable. The shares registered under this registration statement are not being offered for purchase by the Company. The shares are being registered on behalf of White Lion (the selling stockholder identified in this prospectus) pursuant to the White Lion Purchase Agreement.
SELLING SHAREHOLDER
This prospectus relates to the resale of up to 10,500,000 shares of common stock, issuable to White Lion Capital, LLC (“White Lion”), the selling stockholder, pursuant to a “Purchase Notice” under a Common Stock Purchase Agreement (the “Purchase Agreement”), dated February 1, 2022, that we entered into with White Lion. The Purchase Agreement permits us to issue Purchase Notices to White Lion for up to ten million dollars ($10,000,000) in shares of our common stock through December 31, 2022 or until $10,000,000 of such shares have been subject of a Purchase Notice.
The selling stockholder may offer and sell, from time to time, any or all of shares of our common stock to be sold to White Lion under the Purchase Agreement dated February 1, 2022.
The following table sets forth certain information regarding the beneficial ownership of shares of common stock by the selling stockholder as of February 1, 2022 and the number of shares of our common stock being offered pursuant to this prospectus. We believe that the selling stockholder has sole voting and investment powers over its shares.
Because the selling stockholder may offer and sell all or only some portion of the 10,500,000 shares of our common stock being offered pursuant to this prospectus, the numbers in the table below representing the amount and percentage of these shares of our common stock that will be held by the selling stockholder upon termination of the offering are only estimates based on the assumption that the selling stockholder will sell all of its shares of our common stock being offered in the offering.
The selling stockholder has not had any position or office, or other material relationship with us or any of our affiliates over the past three years.
To our knowledge, the selling stockholder is not a broker-dealer or an affiliate of a broker-dealer. We may require the selling stockholder to suspend the sales of the shares of our common stock being offered pursuant to this prospectus upon the occurrence of any event that makes any statement in this prospectus or the related registration statement untrue in any material respect or that requires the changing of statements in those documents in order to make statements in those documents not misleading.
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Number of Shares to be Owned by Selling Stockholder After the Offering and Percent of Total Issued and Outstanding Shares (1) | ||||||||||||||||
| Name of Selling Stockholder |
Shares Owned by the Selling Stockholders before the Offering (1) |
Shares of Common Stock Being Offered |
# of Shares (2) |
% of Class (2)(3) | ||||||||||||
| White Lion Capital, LLC (4) | 103,000 | (5) | 10,500,000 | 0 | 0 | % | ||||||||||
Notes:
| (1) | Beneficial ownership is determined in accordance with Securities and Exchange Commission rules and generally includes voting or investment power with respect to shares of common stock. Shares of common stock subject to options, warrants and convertible debentures currently exercisable or convertible, or exercisable or convertible within 60 days, are counted as outstanding. The actual number of shares of common stock issuable upon the conversion of the convertible debentures is subject to adjustment depending on, among other factors, the future market price of our common stock, and could be materially less or more than the number estimated in the table. |
| (2) | We have assumed that the selling stockholder will sell all of the shares being offered in this offering. |
| (3) | Based on 140,289,095 shares of our common stock issued and outstanding as of February 3, 2022. Shares of our common stock being offered pursuant to this prospectus by the selling stockholder is counted as outstanding for computing the percentage of the selling stockholder. |
| (4) | Nathan Yee exercises voting and dispositive power with respect to the shares of our common stock that are beneficially owned by White Lion Capital, LLC |
| (5) | Represents Commitment Shares issued to White Lion Capital, LLC |
MANAGEMENT’S
DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis summarizes the significant factors affecting our operating results, financial condition, liquidity and cash flows as of and for the periods presented below. The following discussion and analysis should be read in conjunction with our financial statements and related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that are based on beliefs of our management, as well as assumptions made by, and information currently available to, our management. Actual results may differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this prospectus, particularly in the section entitled “Risk Factors.” See “Cautionary Note Regarding Forward-Looking Statements.”
The discussion and analysis of our financial condition and results of operations are based on our financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States of America. 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 revenues and expenses during the reporting periods. On an ongoing basis, we evaluate estimates and judgments, including those described in greater detail below. We base our estimates on 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.
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As used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operation,” except where the context otherwise requires, the term “we,” “us,” “our,” or “the Company,” refers to the business of Bubblr Inc.
Results of Operations for the Nine Months Ended September 30, 2021 and 2020
Revenues
We did not achieve revenues from our current operations for the nine months ended September 30, 2021 or 2020. 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
Operating expenses increased to $3,245,472 for the nine months ended September 30, 2021, as compared with $1,146,389 for the same period ended 2020. For the nine months ended September 30, 2021, our operating expenses mainly consisted of $1,795,560 in professional fees. $1,592,641 was charged for Advisory Board members and consultant compensation that was paid by the issuance of common stock. Additional operating expenses consisted of $532,413 in compensation, $452,222 in research and development $285,867 in amortization and depreciation $72,164 in market and regulation costs, and $107,246 in general and administrative expenses. For the nine months ended September 30, 2020, our operating expenses consisted of $103,419 in professional fees, $391,107 in compensation, $319,065 in research and development $212,436 in amortization and depreciation, $51,810 in marketing and regulation costs, and $68,522 in general and administrative expense.
Our operating expenses are expected to increase as we further implement our business plan and the added expenses associated with this offering and reporting with the Securities and Exchange Commission.
Net Loss
We finished the nine months ended September 30, 2021 with a net loss of $3,327,775, as compared to a loss of $1,121,305 during the nine months ended September 30, 2020.
Results of Operations for the Years Ended December 31, 2020 and 2019
Revenues
We did not achieve revenues from our current operations for the year ended December 31, 2020. In 2019 we achieved minimal revenues of $12,364 from consultancy activity. 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
Operating expenses decreased to $1,267,124 for the year ended December 31, 2020, as compared with $1,723,468 for the same period ended 2019. For the year ended December 31, 2020, our operating expenses mainly consisted of $396,321 in compensation expense, $268,620 in professional fees, and $283,295 in amortization and depreciation. For the year ended December 31, 2019, our operating expenses mainly consisted of $496,894 in research and development, $422,014 in compensation, $274,095 in professional fees, and $273,951 in amortization and depreciation.
Our operating expenses are expected to increase as we further implement our business plan and the added expenses associated with this offering and reporting with the Securities and Exchange Commission.
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Net Loss
We finished the year ended December 31, 2020 with a loss of $1,131,809 as compared to a loss of $1,932,665 during the year ended December 31, 2019.
Liquidity and Capital Resources
As of September 30, 2021, we had total current assets of $372,398 and current liabilities of $677,845, resulting in a working capital deficit of $305,447. As of December 31, 2020, we had total current assets of $190,380 and current liabilities of $1,172,882, resulting in a working capital deficit of $982,502.
We used $72,439 and $1,695 in investing activities during the nine months ended September 30, 2021 and 2020, respectively, for purchase of fixed assets and intangible assets.
Our operating activities used $1,506,563 during the nine months ended September 30, 2021 as compared with $840,710 used in operating activities in the nine months ended September 30, 2020. Our negative operating cash flows in 2021 and 2020 is largely the result of our net loss for the periods.
Financing activities provided $1,696,413 during the nine months ended September 30, 2021 compared with $732,898 provided during the nine months ended September 30, 2020. During the nine months ended September 30, 2021, we received $2,007,578 in convertible notes payable, and made repayments of $8,097 in loans payable and $303,068 in loans payable – related parties. During the nine months ended September 30, 2020, we received proceeds of $360,024 in convertible notes, $239,635 from the issuance of common stock, and $158,771 in loans payable – related parties, and made repayments of $7,492 in loans payable and $18,040 in loans payable -related parties.
Based upon our current financial condition, we do not have sufficient cash to operate our business at the current level for the next twelve months. We intend to fund operations through increased sales and debt and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements. The Company is conducting an offering under Form S-1 for the sale of up to 10,000,000 common stock. This offering is being conducted on a “best efforts” basis, which means that there is no guarantee that any minimum amount will be sold. We also plan to seek additional financing in a private 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 |
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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.
Recent Accounting Pronouncements
For discussion of recently issued and adopted accounting pronouncements, please see Note 2 to the audited consolidated financial statements as of and for the years ended December 31, 2020 and 2019 included herein.
Off Balance Sheet Arrangements
As of September 30, 2021, there were no off-balance sheet arrangements.
BUSINESS
Overview
Bubblr Inc. is a profoundly disruptive and genuinely innovative technology company that is proudly ethical. Our objective is to fix a broken internet economic model that currently suffers from the following failures:
| (1) | It recklessly abuses an individual's personal data; |
| (2) | It is prohibitively expensive and complex for most businesses to utilize as a marketing channel; and |
| (3) | It fails to provide sufficient revenue for content creators and online participants outside of those at the very top. |
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Bubblr has designed and patented an alternative online search mechanism to solve these profound disconnects, resulting in a new economic platform that we believe is fundamentally sustainable and fair to users, online businesses, and all online stakeholders. Our mission is to empower the developers of a new Internet in creating Ethical Technologies through our Intellectual Property, providing advanced digital tools that enable developers and creators to build fair-forward solutions to build a new Ethical Internet Ecosystem (EIE).
Intellectual Property
We have created a new search mechanism, which has been granted a patent in South Africa (2016/06947), New Zealand(725014) and in the United States (‘Utility Patent No. US 10977387, AN INTERNET-BASED SEARCH MECHANISM’.). We have patents pending on the same processes in Canada (2962520), Australia (2015248619), E.U. (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. Our work ensures that users, content publishers, and small-to-medium enterprises (SMEs) are better protected and rewarded in their online experiences.
Our current belief is that the patent is unique and priceless, and we are presently engaged with an independent third-party to corroborate our assertions. We have also filed various trademark applications in Europe and the UK for all our potential products. These copyright applications are all progressing as expected.
Bubblr is currently in the process of filing a follow-on 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 will be more effective than the established search engines for three reasons: 1) there will be no advertising results returned in search query; 2) the user experience will be specifically designed for mobile devices, and 3) no personal data of users is collected. Details of the mobile search app will become available upon formal filing.
Products and Services
All of the consumer-based products developed are designed to deliver the presentation layer through mobile-first consumer experiences. Bubblr eschews delivery of consumer products through browsers, as they are inherently vulnerable to interference by bad actors.
We are developing our EIE by concentrating on proven value methodologies designed to exponentially increase the adoption of our IP through the following models.
| (1) | Our Venture Fund will license and provide our technology to select start-ups, teams and developers. Depending on the application, we also intend to provide early-stage funding to certain start-ups and projects that best reflect and exemplify ethical directives. This will allow us to grow a developer ecosystem and maximize reach and revenue through multiple avenues. |
(2) Our licensing model will provide opportunities through partnerships with select start-ups and established corporations, to further our reach and rapid development of platform applications.
| (3) | Research & development through an Open Source Initiative designed to evolve our IP (developed under patent). This allows us to identify growth areas and expand ecosystems, platforms, and products within those areas. |
We have also 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 ant developer with access to our toolkit, and will allow Bubblr to build and alter conversation search dialogues to optimize searching for information and content.
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For example, allowing users to filter news articles they receive is limited to their chosen geographical area. The DDC capability can also be reused as an essential component of our open-source platform to provide generic conversation e-commerce capabilities. Our DDC offer is not a chatbot, but rather a generic data-driven questionnaire system that can be deployed within apps without requiring any extra coding. Moreover, it operates using mobile app components that use 'finger taps' rather than entering text using a keyboard.
Additionally, we have been building complex AI and machine learning to optimize search results regarding relevance and salience for searching for news. Again, these news-based search algorithms will also be reused within the open-source platform and development ecosystems, and may be added to our overall Software Development Kit (SDK).
The systems architecture to support these systems has evolved. Our current belief is that a collection of technologies is the perfect platform to deliver our solutions in an open-source setting.
We have a combination of Postgres SQL (a scalable relational database that can integrate and manipulate JSON documents) and Elastic Search, which has become the NoSQL document database of choice for delivering very high volume document data sets with built-in machine learning and AI capabilities.
We have managed to integrate these two very different and unique database platforms in powerful ways that allow us to data-drive all our products in ways that other companies will find it difficult in terms of time and money to successfully emulate.
This means that most of our crucial API's never have to be altered with the apps we produce, or that our partners deliver. However, we still retain the capacity to radically enhance the behavior of our technology without having to issue new versions.
We have also integrated open-source NLP (Natural Language Processing) into our products and platforms to include NLP as an intrinsic part of our search functionality. Utilizing NLP and Named Entity Recognition (NER), we can significantly evaluate news stories' relevance and salience to improve any native product search experience.
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.
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.
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We believe that we have competitive strengths and protection via our IP that position us favorably in our lines of business. However, our industry is evolving rapidly and is becoming increasingly competitive. Larger and more established companies may focus on cost effective privacy first marketplace services and could directly compete with us on those benefits. Smaller companies could also launch new products and services that we do not offer and that could gain market acceptance quickly.
Government Regulation
We are subject to a number of foreign and domestic laws and regulations that affect companies conducting business online, many of which are evolving and could be interpreted in ways that could harm our business. In the United States and abroad, laws and regulations relating to the liability of providers of online services for activities of their users and other third parties are being tested by a number of claims, including actions based on invasion of privacy and other torts, unfair competition, copyright and trademark infringement, and other theories based on the nature and content of the materials searched, or the content provided by users. Further some countries impose regulations regarding or require licenses to conduct various aspects of our business, including employee recruiting, and news related services. Any court ruling or other governmental action that imposes liability on providers of online services for the activities of their users or other third parties could harm our business. In addition, rising concern about the use of social networking technologies for illegal conduct, such as the unauthorized dissemination of national security information, money laundering or supporting terrorist activities, may in the future produce legislation or other governmental action that could require changes to our website platform, restrict or impose additional costs upon the conduct of our business or cause users to abandon material aspects of our platform.
In the area of information security and data protection, most states have enacted laws and regulations requiring notification to users when there is a security breach of personal data, or requiring the adoption of minimum information security standards that are often vaguely defined and difficult to practically implement. The costs of compliance with these laws and regulations may increase in the future as a result of amendments or changes in interpretation. Furthermore, any failure on our part to comply with these laws and regulations may subject us to significant liabilities.
We are also subject to federal, state, and foreign laws and regulations regarding privacy and protection of data. Our privacy policies describe our practices concerning the use, storage, transmission and disclosure of personal information, including visitor and user data. Any failure by us to comply with these terms or privacy related laws and regulations could result in proceedings against us by governmental authorities or others, which could harm our business. In addition, the interpretation of privacy and data protection laws and regulations and their application to online services are unclear, evolving and in a state of flux. For example, in October 2015, the highest court in the European Union invalidated reliance on the US-EU Safe Harbor regime as one of the legally recognized mechanisms under which the personal data of European citizens could be transferred to the United States. There is a risk that these laws and regulations may be interpreted and applied in conflicting ways from state to state, country to country, or region to region, and in a manner that is not consistent with our current data protection practices, or that new laws or regulations will be enacted. In addition, because our platform will be accessible worldwide, certain foreign governments may claim that we are required to comply with their laws and regulations, including with respect to the storage, use and disclosure of user information, even in jurisdictions where we have no local entity, employees, or infrastructure. Complying with these varying domestic and international requirements could cause us to incur additional costs and change our business practices. Further, any failure by us to adequately protect our users’ privacy and data could result in a loss of user confidence in our services and ultimately in a loss of users, which could adversely affect our business.
Employees
As of February 11, 2022, we have 6 full time employees, 3 contractors and 1 part-time employment.
MANAGEMENT
The following information sets forth the names, ages, and positions of our current directors and executive officers.
| Name | Age | Positions and Offices Held | ||
| Rik Willard | 61 | Chief Executive Officer and Director | ||
| Steven Saunders | 43 | Chief Commercial Officer and Director | ||
|
Stephen Morris Matthew Loeb |
66 61 |
Chief Technology Officer and Director Chair and Director | ||
| Virginia Mackin | 58 | Interim Chief Financial Officer |
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Set forth below is a brief description of the background and business experience of each of our current executive officers and directors.
Rik Willard
Prior to joining Bubblr on August 16, 2021, for the past five years, Mr. Willard has been the Founder and Managing Director of Agentic Group, a New York based advanced technology consultancy working with governments, financial institutions, corporations and the global tech startup ecosystem. His primary work is helping companies to develop Web 3 and blockchain growth strategies, and facilitating funding and strategic alliances for promising startups. In 2017 he provided these services as Interim CEO with Global Blockchain Technologies in Toronto, CA -- which traded on the TSXv -- developing that company's business strategy and spearheading it's CA $40 million fundraise.
He has a number of board and advisory affiliations, including The World Ethical Data Foundation and Forum, The Seidenberg School of Computer Science (CSIS) at Pace University, The Field Center of Entrepreneurship at Baruch College, and KIPP Charter Schools, among others. He has received Fellowships at The Foreign Policy Association and at the Center for the Study of Digital Life. He continues to be an invited keynote speaker at several major educational institutions, which include the Harvard Business School, the Kaufmann Institute at Stern Business School/NYU, and others.
Aside from that provided above, Mr. Willard does not hold and has not held over the past five years, directorships in any American company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.
Mr. Willard is qualified to serve on our Board of Directors due to his vast experience and expertise in bringing multiple categories of digital products from the investment phase, through to productization and market introduction. He comprehends the nuances of professional board development and procedure, and from the first days of the Internet through today’s privacy and decentralization movements, he has accurately triangulated social, economic and political realities to predict and profit from prevailing and forward-looking digital trends.
Steven Saunders
Prior to joining Bubblr on the May 1, 2019, Mr. Saunders worked for over 8 years at the management consultancy firm, Syntegrity Group. He held the job title of Managing Director, and he worked with c-level executives across a broad range of industries. These included financial services, pharmaceutical, real estate, not-for-profit, technology He also has experience in strategic planning, corporate development, go-to-market innovation, product launches, and corporate transformations.
Aside from that provided above, Mr. Saunders does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.
Mr. Saunders is qualified to serve on our Board of Directors because of his experience and expertise gained as a management consultant over the past decade, working with c-level executives within the Fortune 500 on a variety of management challenges.
Mr. Saunders is paid by Bubblr Limited, a wholly owned subsidiary of Bubblr Inc. since the commencement of his employment in May 2019. In July 2021, Bubblr Inc. now directly employs Mr. Saunders.
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Stephen Morris
Prior to founding Bubblr in 2015 and working on it full time, Mr. Morris also worked as an agile coach and scrum master consultant at various companies. From July 2017 to June 2018 – he worked at Royal London Group in Edinburgh Scotland. From 2016 to February 2017, he worked for Accenture in Newcastle Upon Tyne, England. From January 2016 to October 2016 he worked at Sky Broadcasting in Livingstone, Scotland.
Aside from that provided above, Mr. Morris does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.
Mr. Morris is qualified to serve on our Board of Directors because of his experience and expertise as the creator of the Bubblr concept and Ethos and the founder of Bubblr Ltd in 2014, a wholly owned subsidiary of Bubblr Inc.
Matthew Loeb
Prior to joining Bubblr’s advisory board on September 14, 2020, Mr. Loeb has worked on/with the boards of Excelsior College, the Center for Cyber Safety and Education, CMMI Institute, Crosswalk, and is currently a Fellow at MIT’s Center for Information Systems Research. Mr. Loeb has been the Founder and CEO of Optimal Performance Seekers, LLC from January 2019 to the present. Mr. Loeb was the CEO of ISACA from September 2014 to December 2018 and was an Executive Director and Interim CEO of the Biomedical Engineering Society from May 2019 to August 2020.
Aside from that provided above, Mr. Loeb does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.
Mr. Loeb is qualified to serve on our Board of Directors because of his extensive executive leadership experience as a CEO and in other senior executive position, his background in technology, audit, cybersecurity and risk management, and based on his work serving on boards of directors combined with his knowledge of corporate governance.
Virginia Mackin
Prior to joining Bubblr in 2019, Ms. Mackin worked for three years at The Law Society of Scotland, a not-for-profit organization that represents, registers, and regulates the legal profession in Scotland. She was the Head of Finance and worked with a wide range of stakeholders to ensure the Society complied with all reporting requirements, internal controls, and internal management account requirements. Previously to this post, Ms. Mackin worked for Edrington, an international creator, and distributor of Scotch Whisky and other spirits. She worked within the Commercial Accounting team with responsibilities for distributors in the United Kingdom, Spain, and the Netherlands.
Ms. Mackin is a fellow member of the Association of Chartered Certified Accountants.
Aside from that provided above, Ms. Mackin does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.
Ms. Makin is qualified to serve as an interim member of our executive team because of her overall understanding of our company, the successful completion of the 2019 and 2020 audit and her past experience in change of management and finance team leadership in established, not-for-profit and start-up companies.
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Term of Office
Our Directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board, subject to their respective employment agreements.
Significant Employees
We have no significant employees other than our officers and directors.
Family Relationships
There are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.
Involvement in Certain Legal Proceedings
During the past 10 years, none of our current directors, nominees for directors or current executive officers has been involved in any legal proceeding identified in Item 401(f) of Regulation S-K, including:
| 1. | Any petition under the Federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he or she was a general partner at or within two years before the time of such filing, or any corporation or business association of which he or she was an executive officer at or within two years before the time of such filing; |
| 2. | Any conviction in a criminal proceeding or being named a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); |
| 3. | Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him or her from, or otherwise limiting, the following activities: |
| a. | Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; |
| b. | Engaging in any type of business practice; or |
| c. | Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws; |
| 4. | Being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any type of business regulated by the Commodity Futures Trading Commission, securities, investment, insurance or banking activities, or to be associated with persons engaged in any such activity; |
| 5. | Being found by a court of competent jurisdiction in a civil action or by the SEC to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated; |
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| 6. | Being found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated; |
| 7. | Being subject to, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: |
| a. | Any Federal or State securities or commodities law or regulation; or |
| b. | Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or |
| c. | Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
| 8. | Being subject to, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
Committees of the Board
Our company currently does not have nominating, compensation or audit committees or committees performing similar functions nor does our company have a written nominating, compensation or audit committee charter. Historically, our directors believed that it is not necessary to have such committees because the functions of such committees can be adequately performed by the board of directors.
EXECUTIVE COMPENSATION
The table below summarizes all compensation awarded to, earned by, or paid to our former or current executive officers for the fiscal years ended December 31, 2021 and 2020.
| Name and principal | Year | Salary ($) | Bonus | Stock | Option | All Other | Total |
| Position | ($) | Awards | Awards | Compensation | ($) | ||
| ($) | ($) | ($) (1)(2) | |||||
| Rik Willard | 2020 | Nil | Nil | Nil | Nil | Nil | Nil |
| CEO and Director | 2021 | 41,250 | Nil | 418,364 | Nil | Nil | 459,614 |
| Steven Saunders | 2020 | 129,500 | Nil | Nil | Nil | Nil | 129,500 |
| CCO and Director | 2021 | 134,116 | Nil | Nil | Nil | Nil | 134,116 |
| Stephen Morris | 2020 | 80,750 | Nil | Nil | Nil | Nil | 80,750 |
| CTO and Director | 2021 | 122,537 | Nil | Nil | Nil | Nil | 122,537 |
| Neeta Shah | 2020 | Nil | Nil | Nil | Nil | Nil | Nil |
| CFO | 2021 | 22,500 | Nil | 110,713 | Nil | Nil | 133,213 |
| Virginia Mackin | 2020 | 61,952 | Nil | Nil | Nil | Nil | 61,925 |
| CFO (Interim) | 2021 | 61,952 | Nil | Nil | Nil | Nil | 61,925 |
Management Compensation
The Company has entered into an employment agreement with Steven Saunders, our Chief Commercial Officer and Director. The term is three years. Mr. Saunders is to receive monthly cash compensation of $15,000 reduced by $3,820 until at least $5,000,000 funding has been received through the S-1 offering.
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The Company entered into employment agreement with Stephen Morris, our Founder and Chief Technology Officer, the term is three years. Mr. Morris is to receive monthly cash compensation of $15,000 reduced by $,4,790 until at least $5,000,000 has been received through the S-1 offering.
The Company has entered into an employment agreement with Rik Willard to act as Chief Executive Officer of the company and as Director. The term is 1 year. Mr. Willard is to receive monthly cash compensation of $15,000 reduced by $7,500 until at least $5,000,000 funding has been received through the S-1 offering. Mr. Willard was also granted a signing bonus of 102,040 restricted shares, which were issued in June 2021.
The Company has entered into a consulting contract employment agreement with Neeta Shah to act as the Chief Financial Officer of the company. Mrs. Shah is to receive monthly cash compensation of $7,500 until at least $5,000,000 funding has been received through the S-1 offering, whereas Mrs. Shah will become a full-time employee on a monthly cash compensation of $15,000. Mrs. Shah will also be granted a signing bonus of 102,040 restricted shares, of which 51,020 were issued in October 2021.
On January 29, 2022, we dismissed Ms. Neeta Shah as our contractual Chief Financial Officer. There was no known disagreement with Ms. Shah on any matter relating to our operations, policies, or practices.
Option Grants
We have not granted any options or stock appreciation rights to our named executive officers or directors since inception. We currently do not have any stock option plans.
Compensation of Directors
All Directors shall receive reimbursement for reasonable travel expenses incurred to attend Board and committee meetings.
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits to our directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof.
Indebtedness of Directors, Senior Officers, Executive Officers and Other Management
None of our directors or executive officers or any associate or affiliate of our company during the last two fiscal years is or has been indebted to our company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding currently outstanding.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Other than described below or the transactions described under the heading “Executive Compensation” (or with respect to which such information is omitted in accordance with SEC regulations), there have not been, and there is not currently proposed, any transaction or series of similar transactions to which we were or will be a participant in which the amount involved exceeded or will exceed the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any director, executive officer, holder of 5% or more of any class of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest.
We have a loan from Stephen Morris of $426,499 at September 30, 2021 (December 31, 2020: $500,915). The loan is non-interest bearing and due on demand.
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During the nine months ended September 30, 2021, $60,000 and $6,000 was deducted from the amount owed and used by Mr. Morris to purchase the Special 2019 Series A preferred Stock and Series B Preferred Shares, respectively, from the Company.
During the fourth quarter of 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. These loans were repaid in full during the nine months ended September 30, 2021.
On or about September 9, 2020, we issued 127,811,328 shares of common stock to the current shareholders of Bubblr Holdings Ltd. In consideration for the reverse merger. The Company acquired the full shareholding of Bubblr Holdings. Mr. Morris acquired the majority of our shares in the merger.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as February 11, 2022, certain information as to shares of our voting stock owned by (i) each person known by us to beneficially own more than 5% of our outstanding voting stock, (ii) each of our directors, and (iii) all of our executive officers and directors as a group.
Mr. Morris’ ownership of the Special 2019 Series A Preferred Stock, as detailed below, gives him 60% of all votes of common stock and preferred stock entitled to vote. As a result, he controls all corporate matters submitted to shareholders for a vote, including the election of directors.
Unless otherwise indicated below, to our knowledge, all persons listed below have sole voting and investment power with respect to their shares of voting stock, except to the extent authority is shared by spouses under applicable law. Unless otherwise indicated below, each entity or person listed below maintains an address of 21 West 46th Street, New York, New York 10036.
The number of shares beneficially owned by each stockholder is determined under rules promulgated by the SEC. The information is not necessarily indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting or investment power and any shares as to which the individual or entity has the right to acquire beneficial ownership within 60 days through the exercise of any stock option, warrant or other right. The inclusion in the following table of those shares, however, does not constitute an admission that the named stockholder is a direct or indirect beneficial owner.
| Common Stock | ||||||||
| Name and Address of Beneficial Owner |
Number of Shares Owned (1) |
Percent of Class (2) | ||||||
| Rik Willard | 102,040 | 0.07 | % | |||||
| Stephen Morris | 58,619,663 | 41.78 | % | |||||
| Matthew Loeb | 102,040 | 0.07 | % | |||||
| Steven Saunders | 4,500,000 | 3.21 | % | |||||
| Virginia Mackin | 700,000 | 0.50 | ||||||
| All Directors and Executive Officers as a Group (5 persons) | 64,023,743 | 45.65 | % | |||||
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| 5% Holders | Common Stock | |||||||
|
Number of Shares Owned (1) |
Percent of Class (2) | |||||||
| Stephen Morris | 58,619,663 | 41.78 | % | |||||
| All 5% Holders as a Group (1 persons) | 58,619,663 | 41.78 | % | |||||
| 2019 Series A Preferred Stock | ||||||||
| Name and Address of Beneficial Owner |
Number of Shares Owned (1) |
Percent of Class (3) | ||||||
| Stephen Morris | 1 | 100 | % | |||||
| All Directors and Executive Officers as a Group | 1 | 100 | % | |||||
| (1) | Unless otherwise indicated, each person or entity named in the table has sole voting power and investment power (or shares that power with that person’s spouse) with respect to all shares of voting stock listed as owned by that person or entity. |
| (2) | Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days, including upon exercise of common shares purchase options or warrants. The percent of class is based on 140,289,095 voting shares as of February 3, 2022. |
| (3) | Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days, including upon exercise of common shares purchase options or warrants. The percent of class is based on 1 voting share outstanding as of February 3, 2022. |
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 3,000,000,000 shares of common stock, with a par value of $0.001 per share, and 25,000,000 shares of preferred stock, with a par value of $0.001 per share. As of February 1, 2022, there were 140,289,095 shares of our common stock issued and outstanding, and 1 share of our Special 2019 Series A Preferred Stock. Our shares of common stock are held by stockholders of record and the preferred stock is held by 1 stockholder of record.
Common Stock
Our common stock is entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. The holders of our common stock possess all voting power. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all shares of our common stock that are present in person or represented by proxy, subject to any voting rights granted to holders of any preferred stock. Holders of our common stock representing a majority of our capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Articles of Incorporation. Our Articles of Incorporation do not provide for cumulative voting in the election of directors.
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Preferred Stock
Our board of directors may authorize preferred shares of stock and to divide the authorized shares of our preferred stock into one or more series, each of which must be so designated as to distinguish the shares of each series of preferred stock from the shares of all other series and classes. Our board of directors is authorized, within any limitations prescribed by law and our articles of incorporation, to fix and determine the designations, rights, qualifications, preferences, limitations and terms of the shares of any series of preferred stock including, but not limited to, the following:
| 1. | The number of shares constituting that series and the distinctive designation of that series, which may be by distinguishing number, letter or title; |
| 2. | The dividend rate on the shares of that series, whether dividends will be cumulative, and if so, from which date(s), and the relative rights of priority, if any, of payment of dividends on shares of that series; |
| 3. | Whether that series will have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights; |
| 4. | Whether that series will have conversion privileges, and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the Board of Directors determines; |
| 5. | Whether or not the shares of that series will be redeemable, and, if so, the terms and conditions of such redemption, including the date or date upon or after which they are redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates; |
| 6. | Whether that series will have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of such sinking fund; |
| 7. | The rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the corporation, and the relative rights of priority, if any, of payment of shares of that series; and |
| 8. | Any other relative rights, preferences and limitations of that series. |
Special 2019 Series A Preferred Stock
We have one designated class of preferred stock known as Special 2019 Series A Preferred Stock. The holders of Special 2019 Series A Preferred Stock are entitled to vote 60% of all votes (including, but not limited to, Common Stock, and Preferred Stock (including on an as converted basis)) entitled to vote at each meeting of stockholders of the Corporation (and written actions of stockholders in lieu of meetings) with respect to any and all matters presented to the stockholders of the Corporation for their action or consideration.
Dividend Policy
We have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future.
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Anti-Takeover Issues
The super voting rights of our Special 2019 Series A Preferred Stock provides a potential anti-takeover mechanism in that the holder has a 60% vote in all matters requiring shareholder approval. Other than what is described in this section of the Offering Circular, we have no plans or proposals to adopt any such additional provisions or mechanisms or to enter into any arrangements that may have material anti-takeover consequences.
Other provisions of the Company’s Amended and Restated Articles of Incorporation and Bylaws may have anti-takeover effects, making it more difficult for or preventing a third party from acquiring control of the Company or changing our Board of Directors and Management. According to our Articles and Bylaws, the holders of our common stock do not have cumulative voting rights in the election of the Company’s Directors. The combination of the present ownership of super-voting preferred shares and lack of common stock cumulative voting makes it more difficult for other stockholders to replace our Board of Directors or for a third party to obtain control by replacing our Board of Directors.
Wyoming does not impose enhanced fiduciary duties on directors in attempted takeover situations. Instead, the “business judgment rule” is applied to the use of antitakeover tactics. Here is the text of WY Stat § 17-16-830 (1997 through Reg Sess):
“(a) Each member of the board of directors, when discharging the duties of a director, shall act:
(i) In good faith; and
(ii) In a manner he reasonably believes to be in or at least not opposed to the best interests of the corporation.
(b) The members of the board of directors or a committee of the board, when becoming informed in connection with their decision making function or devoting attention to their oversight function, shall discharge their duties with the care that a person in a like position would reasonably believe appropriate under similar circumstances.
(c) In discharging board or committee duties a director shall disclose, or cause to be disclosed, to the other board or committee members information not already known by them but known by the director to be material to the discharge of their decision making or oversight functions, except that disclosure is not required to the extent that the director reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality or a professional ethics rule.
(d) In discharging board or committee duties a director who does not have knowledge that makes reliance unwarranted is entitled to rely on the performance by any of the persons specified in paragraph (f)(i) or (iii) of this section to whom the board may have delegated, formally or informally by course of conduct, the authority or duty to perform one (1) or more of the board's functions that are delegable under applicable law.
(e) In discharging board or committee duties a director who does not have knowledge that makes reliance unwarranted is entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, prepared or presented by any of the persons specified in subsection (f) of this section.
(f) A director is entitled to rely in accordance with subsections (d) and (e) of this section on:
(i) One (1) or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the functions performed or the information, opinions, reports or statements provided;
(ii) Legal counsel, public accountants or other persons retained by the corporation as to matters involving skills or expertise the director reasonably believes are matters:
(A) Within the person's professional or expert competence; or
(B) As to which the particular person merits confidence; or
(iii) A committee of the board of directors of which he is not a member if the director reasonably believes the committee merits confidence.
(g) For purposes of subsection (a) of this section, a director, in determining what he reasonably believes to be in or not opposed to the best interests of the corporation, shall consider the interests of the corporation's shareholders and, in his discretion, may consider any of the following:
(i) The interests of the corporation's employees, suppliers, creditors and customers;
(ii) The economy of the state and nation;
(iii) The impact of any action upon the communities in or near which the corporation's facilities or operations are located;
(iv) The long-term interests of the corporation and its shareholders, including the possibility that those interests may be best served by the continued independence of the corporation; and
(v) Any other factors relevant to promoting or preserving public or community interests.”
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Directors and Officers, in exercising their respective powers with a view to the interests of the corporation, may consider:
(a) The interests of the corporation’s employees, suppliers, creditors and customers;
(b) The economy of the State and Nation;
(c) The interests of the community and of society; and
(d) The long-term as well as short-term interests of the corporation and its stockholders, including the possibility that these interests may be best served by the continued independence of the corporation.
This is an extremely management-friendly provision that allows directors to consider the interests of shareholders as just one factor among others. Wyoming’s legislature offers an almost identical management-friendly language in Section 17-16-830 of its Wyoming Business Corporation Act.
Our Board of Directors can designate the rights, preferences, privileges and restrictions of series of preferred or common stock without further shareholder action. Cumulative voting is not provided for in our Articles of Incorporation or Bylaws or in the Wyoming Business Corporations Act, which also may make it harder for third parties to gain control over the Company. We do not currently have a staggered Board of Directors, and we have not adopted any shareholders’ rights plans, or so-called poison pills.
Listing of Common Stock
Our Common Stock is currently quoted on the OTC Markets under the trading symbol “BBLR.”
Transfer Agent and Registrar
The transfer agent and registrar of our Common Stock is Pacific Stock Transfer Co.
Penny Stock Regulation
The SEC has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) of less than $5.00 per share or an exercise price of less than $5.00 per share. Such securities are subject to rules that impose additional sales practice requirements on broker-dealers who sell them. For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchaser of such securities and have received the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a disclosure schedule prepared by the SEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, among other requirements, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. As the Shares immediately following this Offering will likely be subject to such penny stock rules, purchasers in this Offering will in all likelihood find it more difficult to sell their Shares in the secondary market.
PLAN OF DISTRIBUTION
This prospectus relates to the resale of 10,500,000 shares of our common stock, par value $0.001 per share, issuable to White Lion, a selling stockholder, pursuant to a Purchase Notice under a Purchase Agreement dated February 1, 2022, that we entered into with White Lion. The Purchase Agreement permits us to issue Purchase Notices to White Lion for up to ten million dollars ($10,000,000) in shares of our common stock through December 31, 2022 or until $10,000,000 of such shares have been subject of a Purchase Notice.
The purchase price of the common stock will be set at ninety percent (90%) of the VWAP of the common stock during the five (5) consecutive trading day period immediately preceding the date on which the Company delivers a put notice to White Lion. In addition, there is an ownership limit for White Lion of 4.99%.
| 37 |
The selling stockholder may, from time to time, sell any or all of shares of our common stock covered hereby on the OTC, or any other stock exchange, market or trading facility on which the shares are traded or in private transactions. A selling stockholder may sell all or a portion of the shares being offered pursuant to this prospectus at fixed prices, at prevailing market prices at the time of sale, at varying prices or at negotiated prices. A selling stockholder may use any one or more of the following methods when selling securities:
| ● | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; | |
| ● | block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; | |
| ● | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; | |
| ● | an exchange distribution in accordance with the rules of the applicable exchange; | |
| ● | privately negotiated transactions; | |
| ● | in transactions through broker-dealers that agree with the selling stockholder to sell a specified number of such securities at a stipulated price per security; | |
| ● | through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; | |
| ● | a combination of any such methods of sale; or | |
| ● | any other method permitted pursuant to applicable law. |
The selling stockholder may also sell securities under Rule 144 under the Securities Act of 1933, if available, rather than under this prospectus.
Broker-dealers engaged by the selling stockholder may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling stockholder (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.
In connection with the sale of the securities or interests therein, the selling stockholder may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The selling stockholder may also sell securities short and deliver these securities to close out its short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities. The selling stockholder may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
White Lion Capital, LLC is an underwriter within the meaning of the Securities Act of 1933 and any broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act of 1933 in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act of 1933. We are required to pay certain fees and expenses incurred by us incident to the registration of the securities.
The selling stockholder will be subject to the prospectus delivery requirements of the Securities Act of 1933 including Rule 172 thereunder.
| 38 |
The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Securities Exchange Act of 1934, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the selling stockholder will be subject to applicable provisions of the Securities Exchange Act of 1934 and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of securities of the common stock by the selling stockholder or any other person. We will make copies of this prospectus available to the selling stockholder and will inform it of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act of 1933).
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.
The Doney Law Firm, our independent legal counsel, has provided an opinion on the validity of our common stock.
Pinnacle Accountancy Group of Utah (a dba of the registered firm Heaton & Company, PLLC) (“Pinnacle”) has audited our consolidated financial statements as of and for the years ended December 31, 2020 and 2019 included in this prospectus and registration statement. Pinnacle has presented their report with respect to our audited consolidated financial statements. The report of Pinnacle is included in reliance upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission a registration statement on Form S-1 (including the exhibits, schedules and amendments thereto) under the Securities Act, with respect to the shares of our common stock offered hereby. This prospectus does not contain all of the information set forth in the registration statement and the exhibits and schedules thereto. For further information with respect to us and the common stock offered hereby, reference is made to the registration statement and the exhibits and schedules filed therewith. Statements contained in this prospectus as to the contents of any contract, agreement or other documents are summaries of the material terms of that contract, agreement or other document. With respect to each of these contracts, agreements or other documents filed as an exhibit to the registration statement, reference is made to the exhibits for a more complete description of the matter involved. Copies of the registration statement, and the exhibits and schedules thereto, may be accessed at the Securities and Exchange Commission’s website at www.sec.gov. The Securities and Exchange Commission maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Securities and Exchange Commission. The address of the Securities and Exchange Commission’s website is http://www.sec.gov.
We are required to file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. We make our periodic reports and other information filed with or furnished to the Securities and Exchange Commission available, free of charge, through our website at www.bubblr.com/investor-releations, as soon as reasonably practicable after those reports and other information are electronically filed with or furnished to the Securities and Exchange Commission. Information on our website or any other website is not incorporated by reference into this prospectus and does not constitute a part of this prospectus. You may read and copy any reports, statements or other information on file at the public reference rooms. You can also request copies of these documents, for a copying fee, by writing to the Securities and Exchange Commission, or you can review these documents on the Securities and Exchange Commission’s website, as described above. In addition, we will provide electronic or paper copies of our filings free of charge upon request.
| 39 |
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to “incorporate by reference” certain information we have filed with the Securities and Exchange Commission into this prospectus, which means we are disclosing important information to you by referring you to other information we have filed with the Securities and Exchange Commission. The information we incorporate by reference is considered part of this prospectus. All reports and definitive proxy or information statements subsequently filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, on or after the date of this prospectus and prior to the sale of all securities registered hereunder or termination of the registration statement of which this prospectus forms a part (excluding any disclosures that are furnished and not filed with the Securities and Exchange Commission) shall be deemed to be incorporated by reference into this prospectus and to be part hereof from the date of filing of such reports and other documents.
Notwithstanding the foregoing, we are not incorporating by reference any documents, portions of documents, exhibits or other information that is deemed to have been furnished to, rather than filed with, the Securities and Exchange Commission.
Any statement contained in a document incorporated by reference into this prospectus shall be deemed to be modified or superseded for the purposes of this prospectus or any prospectus supplement to the extent that a statement contained herein or any prospectus supplement or in any subsequently filed document that is also incorporated by reference in this prospectus or any prospectus supplement modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus or any prospectus supplement.
You may request a copy of the filings incorporated herein by reference, including exhibits to such documents that are specifically incorporated by reference, at no cost, by writing or calling us at the following address or telephone number:
Bubblr Inc.
21 West 46th Street
New York, New York 10036
Phone: (647) 646 2263
Statements contained in this prospectus as to the contents of any contract or other documents are not necessarily complete, and in each instance investors are referred to the copy of the contract or other document filed as an exhibit to the registration statement, each such statement being qualified in all respects by such reference and the exhibits and schedules thereto.
| 40 |
Bubblr Inc.
Index to Financial Statements
| Unaudited Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020 | F-1 |
| Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2021 and 2020 | F-2 |
| Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the Nine Months Ended September 30, 2021 and 2020 | F-3 |
| Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020 | F-4 |
| Notes to Unaudited Condensed Consolidated Financial Statements | F-5 |
| Report of Independent Registered Public Accounting Firm | F-15 |
| Consolidated Balance Sheets as of December 31, 2020 and 2019 | F-17 |
| Consolidated Statements of Operations of the years ended December 31, 2020 and 2019 | F-18 |
| Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2020 and 2019 | F-19 |
| Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019 | F-20 |
| Notes to Consolidated Financial Statements | F-21 |
| 41 |
| BUBBLR INC. |
| Consolidated Balance Sheets |
September 30, 2021 and December 31, 2020 (Unaudited) |
| September 30, 2021 | December 31, 2020 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Advances receivable | ||||||||
| Total current assets | ||||||||
| Non-current Assets: | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets | ||||||||
| Total non-current assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued interest | ||||||||
| Convertible notes | ||||||||
| Loans payable – current portion | ||||||||
| Loans payable - related parties | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities: | ||||||||
| Convertible notes - net of discount $87,143 and $0 | ||||||||
| Loans payable – non-current portion | ||||||||
| Total non-current liabilities | ||||||||
| Total Liabilities | ||||||||
| Stockholders' Equity (Deficit) | ||||||||
| Preferred Stock, par value, shares authorized | ||||||||
| Special 2019 Series A Preferred Stock, par value, share authorized; and share(s) issued and outstanding at September 30, 2021 and issued at December 31, 2020 | ||||||||
| Common stock, par value, shares authorized; and shares issued and outstanding at September 30, 2021 and December 31, 2020 | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ||||||||
| Treasury stock, share of Special 2019 Series A Preferred Stock at cost | ( | ) | ||||||
| Total Stockholders' Equity (Deficit) | ( | ) | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (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, 2021 and 2020 |
(Unaudited)
| For the Three Months Ended | For the Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| 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) | ||||||||||||||||
| Other income | ||||||||||||||||
| Interest income | ||||||||||||||||
| Gain on debt settlement | ||||||||||||||||
| Loss on disposal of fixed assets | ( |
) | ( |
) | ||||||||||||
| Interest expense | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| 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 (loss) | ( |
) | ||||||||||||||
| 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’ Equity (Deficit)
For the Nine Months Ended September 30, 2021 and 2020
(Unaudited)
| 2019 Series A Preferred Stock |
Series B Preferred Stock |
Common Stock | ||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | Amount | Number of Shares | Amount | Number of Shares | Amount | Additional Paid-in Capital |
Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Stockholders' Equity (Deficit) | ||||||||||||||||||||||||||||||||||
| Balance - December 31, 2019 | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||||||||||||||||||||
| Common shares issued for cash | ||||||||||||||||||||||||||||||||||||||||||||
| Net loss | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||
| Balance -March 31, 2020 | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||
| Subsidiary shares issued for note conversion | ||||||||||||||||||||||||||||||||||||||||||||
| Net loss | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||
| Balance -June 30, 2020 | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||||||||||||||||||||
| Reverse acquisition recapitalization | ( |
) | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||
| Balance -September 30, 2020 | $ | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||||||||||||||||
| Balance - December 31, 2020 | $ | $ | $ | $ | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||||||||||||||||||||||||||
| Preferred B shares converted to common shares | ( |
) | ||||||||||||||||||||||||||||||||||||||||||
| Common shares issued for Services - Advisory Board | ||||||||||||||||||||||||||||||||||||||||||||
| Common shares issued for Services - Consulting | ||||||||||||||||||||||||||||||||||||||||||||
| Sales of Treasury shares at cost | ||||||||||||||||||||||||||||||||||||||||||||
| Net loss | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||
| Balance - March 31, 2021 | ( |
) | ||||||||||||||||||||||||||||||||||||||||||
| Common shares issued for Services - Advisory Board | ||||||||||||||||||||||||||||||||||||||||||||
| Common shares issued for debt settlement | ||||||||||||||||||||||||||||||||||||||||||||
| Common shares issued for note conversion | ||||||||||||||||||||||||||||||||||||||||||||
| Net loss | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||
| Balance -June 30, 2021 | $ | $ | $ | $ | $ | $ | ( |
) | $ | $ | ( |
) | ||||||||||||||||||||||||||||||||
| Net loss | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||
| Balance -September 30, 2021 | $ | $ | $ | $ | $ | $ | ( |
) | $ | $ | ( |
) | ||||||||||||||||||||||||||||||||
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, 2021 and 2020 |
| (Unaudited) |
| For the Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2021 | 2020 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | ( |
) | $ | ( |
) | ||
| Adjustments for: | ||||||||
| Net loss to net cash used in operating activities: | ||||||||
| Stock based compensation | ||||||||
| Gain on settlement of debt | ( |
) | ||||||
| Loss on disposal of fixed assets | ||||||||
| Amortization of debt discount | ||||||||
| Amortization of intangible asset | ||||||||
| Depreciation | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| (Increase) decrease in accounts receivable | ( |
) | ||||||
| (Decrease) increase in accrued interest | ( |
) | ||||||
| Decrease in accounts payables | ( |
) | ( |
) | ||||
| Net cash used in operating activities | ( |
) | ( |
) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of fixed assets | ( |
) | ( |
) | ||||
| Purchase of intangible assets | ( |
) | ||||||
| Net cash used in investing activities | ( |
) | ( |
) | ||||
| Cash flows from financing activities | ||||||||
| Repayment of loans payable | ( |
) | ( |
) | ||||
| Repayment of loans payable - related parties | ( |
) | ( |
) | ||||
| Proceeds from loans payable - related parties | ||||||||
| Proceeds from issuance of pre-merger common stock | ||||||||
| Proceeds from issuance of convertible notes | ||||||||
| 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 note | $ | $ | ||||||
| Common stock issued for settlement of debt | $ | $ | ||||||
| Issuance of Special 2019 Series A Preferred Stock from Treasury to related party in satisfaction of debt | $ | $ | ||||||
| Common stock issued for conversion of Series B Preferred Stock | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-4 |
BUBBLR INC.
Notes to the Unaudited Consolidated Financial Statements
September 30, 2021 and 2020
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 October 22, 2019, and became a 100% subsidiary of UWRL. On March 30, 2021, the Company’s corporate name was changed to Bubblr Inc. (“the Company”).
Bubblr Inc. is a Mobile Application software company that is currently developing its disruptive Internet Search Mechanism and seeking license opportunities for a next-generation solution designed to create an alternative economic model.
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 12 – 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 has instituted some and may take additional 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 and for the nine months ended September 30, 2021. The full extent of the future impacts of COVID-19 on the Company’s operations is uncertain. A prolonged outbreak could have a material adverse impact on financial results and business operations of the Company, including the timing and ability of the Company to collect accounts receivable and the ability of the Company to continue to provide high quality services to its clients. 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 unaudited consolidated interim financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the unaudited interim financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the results of operations; and (c) cash flows, have been made in order to make the unaudited interim financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. The accompanying unaudited interim financial statements should be read in conjunction with the audited consolidated financial statements and related notes as of and for the year ended December 31, 2020 included in the Company’s Registration Statement on Form S-1.
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 unaudited 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.
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 nine months ended September 30, 2021 and 2020, 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, | ||||||||
| 2021 | 2020 | |||||||
| (Shares) | (Shares) | |||||||
| Series B Preferred Stock | ||||||||
| Convertible Notes | ||||||||
| Total | ||||||||
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.
| F-6 |
| September 30, | ||||
| 2021 | 2020 | |||
| Period -end GBP£:US$ exchange rate | ||||
| 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, 2021 and December 31, 20201, 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).
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.
| F-7 |
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, 2021 and December 31, 2020, accounts receivable consisted of the following:
| September 30, 2021 | December 31, 2020 | |||||||
| 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, 2021 and December 31, 2020, cash advances consisted of the following:
| September 30, 2021 | December 31, 2020 | ||||||||
| Advance principal receivable -GW | $ | $ | |||||||
| Advance principal receivable -JM | |||||||||
| Interest due | |||||||||
| Cash advance | $ | $ | |||||||
The advance labelled Advance receivable-GW carries an interest rate
of
Any difference on the Advance principal is due to currency translation.
| F-8 |
NOTE 5 - PROPERTY AND EQUIPMENT
As of September 30, 2021 and December 31, 2020, property and equipment consisted of the following:
| Motor Vehicles | Computer Equipment | Office Equipment | Total | |||||||||||||
| Cost | ||||||||||||||||
| At December 31, 2020 | $ | $ | $ | $ | ||||||||||||
| Additions | ||||||||||||||||
| Effects of currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| At September 30, 2021 | ||||||||||||||||
| Less accumulated depreciation | ||||||||||||||||
| At December 31, 2020 | ||||||||||||||||
| Depreciation expense | ||||||||||||||||
| Effects of currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| At September 30, 2021 | ||||||||||||||||
| Net book value | ||||||||||||||||
| At September 30, 2021 | ||||||||||||||||
| At December 31, 2020 | $ | $ | $ | |||||||||||||
During the nine months ended September 30, 2021 and 2020, the Company
recorded additions of $
NOTE 6 - INTANGIBLE ASSETS
Patents
A Patent on the Internet-Search Mechanism (“IBSM”) has been granted in the United States, South Africa and has received a “Notice of Allowance” in New Zealand. The patent is currently pending in the following areas: Canada, Australia, European Union, 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 the following trademarks
| Name | Type | Class | Status | Territory | ||||||||
| Citizens Journalist | Word & Mark | 9 & 38 | registered | European Union | ||||||||
| Citizens Journalist | Word | 9 & 38 | registered | United Kingdom | ||||||||
| BAU Not OK | Word | 9 & 38 | registered | United Kingdom | ||||||||
| Newzmine | Word | 9 & 38 | registered | United Kingdom | ||||||||
| Citizens Journalist | Word & Mark | 9, 38, 41 & 42 | filed | United States |
| F-9 |
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, 2021 and December 31, 2020, trademarks consisted of the following:
| September 30, 2021 | December 31, 2020 | ||||||||
| Trademarks: | |||||||||
| NewzMineTM | $ | $ | |||||||
| Citizens Journalist™ | |||||||||
| $ | $ | ||||||||
As of September 30, 2021 and December 31, 2020, intangible assets consisted of the following:
| Cost | Patents | Trademarks | Intellectual Property | Capitalized Acquisition Costs | Total | |||||||||||||||
| At December 31, 2020 | $ | $ | $ | $ | $ | |||||||||||||||
| Additions | ||||||||||||||||||||
| Effects of currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| At September 30, 2021 | $ | $ | $ | $ | $ | |||||||||||||||
| Less accumulated amortization | ||||||||||||||||||||
| At December 31, 2020 | $ | $ | $ | $ | $ | |||||||||||||||
| Amortization expense | ||||||||||||||||||||
| Effects of currency translation | ( | ) | ( | ) | ||||||||||||||||
| At September 30, 2021 | $ | $ | $ | $ | $ | |||||||||||||||
| Net book value | ||||||||||||||||||||
| At September 30, 2021 | $ | $ | $ | $ | $ | |||||||||||||||
| At December 31, 2020 | $ | $ | $ | $ | $ | |||||||||||||||
During the nine months ended September 30, 2021 and 2020, the Company
purchased $
| Nine months ended September 30, | Patents | Intellectual Property | Capitalized Acquisition Costs | Total | ||||||||||||||
| 3 months remaining 2021 | $ | $ | $ | $ | ||||||||||||||
| 2022 | ||||||||||||||||||
| 2023 | ||||||||||||||||||
| 2024 | ||||||||||||||||||
| 2025 | ||||||||||||||||||
| Thereafter | ||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||
| F-10 |
NOTE 7 - CONVERTIBLE NOTES PAYABLE
During the nine months ended September 30, 2020, the Company issued
22 Loan Notes for the principal sum of $
In January 2021 the Company commenced an offering for a
convertible promissory note. The offering closed June 30, 2021. Funds raised as of September 30, 2021 was $
Interest accrual and debt discount amortization commenced July 1, 2021 upon the closing of the convertible promissory note offering.
At September 30, 2021 and December 31, 2020, convertible notes consisted of the following
| September 30, 2021 | December 31, 2020 | |||||||
| Promissory notes - issued in fiscal year 2019 | $ | $ | ||||||
| Promissory notes -issued in fiscal year 2021 | ||||||||
| Total convertible notes payable | ||||||||
| Less: unamortized debt discount | ( | ) | ||||||
| Less: notes converted in year to common stock | ( | ) | ||||||
| Less: current portion of convertible notes | ||||||||
| Long-term convertible notes | $ | $ | ||||||
During the nine months ended September 30, 2021 and 2020, the Company
recorded $
During the nine months ended September 30, 2021,
the Company converted the 2019 note of $
| F-11 |
NOTE 8 – LOAN PAYABLE
The Company has purchased a vehicle under a capital finance arrangement.
The term of this loan is
At September 30, 2021, future minimum payments under the loan, are as follows:
| Total | |||
| 2021 (three months remaining in 2021) | $ | ||
| 2022 | |||
| 2023 | |||
| 2024 | |||
| Thereafter | |||
| Less: Imputed interest | ( | ||
| Loan payable | |||
| Loan payable – current | |||
| Loan payable - non-current | $ | ||
NOTE 9 - RELATED PARTY TRANSACTIONS
Loans from Related Parties
The
Company has a loan from our Founder with a balance of $
| September 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| $ | $ | |||||||
| Effects of currency translation | ( | ) | ||||||
| Loan Payable | ||||||||
| Less: settlement | ( | ) | ( | ) | ||||
| $ | $ | |||||||
During the fourth quarter of 2020, the Company received two loans from minority shareholders totaling . The loan of was non-interest bearing and due for repayment on January 31, 2021. The loan of carried an original interest rate of and was due for repayment on December 31, 2020. In the nine months ended September 30, 2021 the Company repaid all outstanding loans from its minority shareholders as follows:
| September 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| $ | $ | |||||||
| Effects of currency translation | ||||||||
| Loan Payable | ||||||||
| Less: repayments | ( | ) | ||||||
| $ | — | $ | 297,006 | |||||
During the nine months ended September 30, 2021 and 2020, the Company received and , respectively, in proceeds from related party loans and made repayments of and , respectively.
| F-12 |
NOTE 10 - 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 March 12, 2021, the Company amended the designation of the Special 2019 Series A Preferred shares and removed the right of the holder to convert the Special 2019 Series A Preferred share to 500,000,000 shares of common stock of the Company.
In the nine months ended September 30, 2021, the Company transferred
from treasury to a related party one () share of Special 2019 Series A Preferred stock for debt settlement of $
As of September 30, 2021, the Company had share of 2019 Series A Preferred stock issued and outstanding. As of December 31, 2020, the Company held share of Special 2019 Series A Preferred stock in its Treasury.
Series B Preferred Stock
At September 30, 2021 and December 31, 2020, the Company had designated 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 the nine months ended September 30, 2021, the Company converted
the
As of September 30, 2021 and December 31, 2020, the Company had and , shares of Series B preferred stock issued and outstanding, respectively.
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, 2021, the Company issued common shares as follows:
| · | shares for Advisory
Board services valued at $ |
| · | shares for Investor
Relations services valued at $ |
| · | shares for conversion of B preferred shares for the conversion of debt of |
| · | shares for conversion
of debt of $ | |
| · | shares for the conversion of the 2019 Convertible promissory note (Note 7 Convertible Debt) |
As at September 30, 2021 and December 31, 2020, the Company had and shares of common stock issued and outstanding, respectively.
| F-13 |
NOTE 11 - COMMITMENTS AND CONTINGENCIES
During each of the nine months
ended September 30, 2021 and 2020, the Company paid $
During the nine months ended September
30, 2021 and 2020, the Company paid $
See Note 12 – Subsequent Events for a description of our commitments to various officers, directors, and consultants entered into after September 30, 2021.
NOTE 12 - SUBSEQUENT EVENTS
The Company has evaluated subsequent events through December 23, 2021, the date of issuance of these consolidated financial statements and noted the following events requiring disclosure:
On or about October 1, 2021, the Company entered into a consulting contract employment agreement with Neeta Shah to act as the CFO of the Company. Mrs. Shah is to receive monthly cash compensation of $7,500 until at least $5,000,000 funding has been received through the S-1 offering, whereas Mrs. Shah will become a full-time employee on a monthly cash compensation of $15,000. Mrs. Shah will also be granted a signing bonus of 102,040 restricted shares, of which 51,020 shares were issued in October 2021.
On or about October 11, 2021 the Company issued 33,000 shares for Investor relations services, as per the contract signed July 1, 2021.
On or about November 5, 2021 the Company entered into unsecured convertible promissory notes for $175,630. The notes bear interest at 2% per annum, mature on April 29, 2023 and have the same conversion terms as the convertible notes outstanding at June 30, 2021 as disclosed in Note 7 – Convertible Notes Payable.
On or about November 9, 2021 the Company submitted a Form S-1 to the Securities and Exchange commission to register for sale 10,000,000 shares of common stock for sale. The S-1 also had selling shareholders of 2,041,786. Holders of the convertible promissory notes issued June and November 2021, plus 33,000 shares issued in respect of investor relations services.
| F-14 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Bubblr Inc.
New York, NY
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Bubblr Inc. (the Company) as of December 31, 2020 and 2019, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Considerations
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses since inception and has not achieved profitable operations, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
| F-15 |
Going Concern – Disclosure
The financial statements of the Company are prepared on a going concern basis, which assumes that the Company will continue in operation for the foreseeable future and, accordingly, will be able to realize its assets and discharge its liabilities in the normal course of operations. As noted in “Going Concern Considerations” above, the Company has a history of recurring net losses, a significant accumulated deficit and currently has net working capital deficit. The Company has contractual obligations, such as commitments for repayments of accounts payable, accrued liabilities, loans payable, convertible notes payable, and related party loans (collectively “obligations”). Currently, management’s forecasts and related assumptions illustrate their ability to meet the obligations through management of expenditures, implementation of planned business operations, obtaining additional debt financing, and issuance of capital stock for additional funding to meet its operating needs. Should there be constraints on the ability to implement its planned business operations or access financing through stock issuances, the Company will continue to manage cash outflows and meet the obligations through debt financing.
We identified management’s assessment of the Company’s ability to continue as a going concern as a critical audit matter. Management made judgments to conclude that it is probable that the Company’s plans will be effectively implemented and will provide the necessary cash flows to fund the Company’s obligations as they become due. Specifically, the judgments with the highest degree of impact and subjectivity in determining it is probable that the Company’s plans will be effectively implemented include its ability to manage expenditures, its ability to access funding from the capital market, its ability to obtain debt financing, and the successful implementation of its planned business operations. Auditing the judgments made by management required a high degree of auditor judgment and an increased extent of audit effort.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included the following, among others: (i) evaluating the probability that the Company will be able to access funding from the capital market; (ii) evaluating the probability that the Company will be able to manage expenditures (iii) evaluating the probability that the Company will be able to obtain debt financing, and (iv) evaluating the implementation of its planned business operations.
Pinnacle Accountancy Group of Utah
We have served as the Company’s auditor since 2021.
Pinnacle Accountancy Group of Utah
(a dba of Heaton & Company, PLLC)
Farmington, Utah
October 15, 2021
| F-16 |
| BUBBLR INC. |
| (formerly U.S. Wireless Online, Inc.) |
| Consolidated Balance Sheets |
| December 31, 2020 and December 31, 2019 |
| December 31, | |||||||
| 2020 | 2019 | ||||||
| ASSETS | |||||||
| Current Assets: | |||||||
| Cash | $ | $ | |||||
| Accounts receivable | |||||||
| Advances receivable | |||||||
| Total current assets | |||||||
| Non-current Assets: | |||||||
| Property and equipment, net | |||||||
| Investments | — | 15,736 | |||||
| Intangible assets | |||||||
| Total non-current assets | |||||||
| TOTAL ASSETS | $ | $ | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current Liabilities: | |||||||
| Accounts payable | $ | $ | |||||
| Accrued interest | |||||||
| Convertible note | |||||||
| Loan payable | |||||||
| Loan payable - related parties | |||||||
| Total current liabilities | |||||||
| Non-current liabilities: | |||||||
| Loan payable - non current | |||||||
| Total Liabilities | |||||||
| Stockholders' Equity | |||||||
| Preferred Stock, par value, shares authorized | |||||||
| Class A Preferred Stock, par value, shares authorized, shares outstanding; | |||||||
| Special 2019 Series A Preferred Stock, par value, share authorized; shares issued | |||||||
| Series B Preferred Stock, par value, shares authorized; shares issued and outstanding | |||||||
| Series C Preferred Stock, par value, authorized, shares outstanding | |||||||
| Common stock, par value, shares authorized; and shares issued and outstanding, respectively | |||||||
| Additional paid-in capital | |||||||
| Accumulated deficit | ( | ) | ( | ||||
| Accumulated other comprehensive income | |||||||
| Treasury stock, share of Special 2019 Series A Preferred Stock at cost | ( | ) | ( | ||||
| Total Stockholders' Equity | |||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ | |||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-17 |
| BUBBLR INC. |
| (formerly U.S. Wireless Online, Inc.) |
| Consolidated Statements of Operations and Comprehensive Loss |
| For the year ended December 31, 2020 and 2019 |
| December 31, | |||||||
| 2020 | 2019 | ||||||
| Revenue | $ | $ | |||||
| Cost of Sales | ( | ||||||
| Gross Profit | |||||||
| Operating Expenses | |||||||
| General and administrative | |||||||
| Professional fees | |||||||
| Market and regulation costs | |||||||
| Compensation | |||||||
| Amortization and depreciation | |||||||
| Research and development | |||||||
| Total Operating Expenses | |||||||
| Operating loss | ( | ) | ( | ||||
| Other income (expense) | |||||||
| Other income | |||||||
| Interest income | |||||||
| Impairment of intangible asset | ( | ) | |||||
| Unrealized loss on investment | ( | ) | |||||
| Loss on disposal of fixed asset | ( | ) | |||||
| Interest expense | ( | ) | ( | ||||
| Foreign currency transaction loss | ( | ) | ( | ||||
| Total other income (expense) | ( | ||||||
| Net loss before income tax | ( | ) | ( | ||||
| Provision for income tax | |||||||
| Net loss | $ | ( | ) | $ | ( | ||
| Other comprehensive income (loss) | |||||||
| Foreign currency translation gain (loss) | ( | ) | |||||
| 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 consolidated financial statements.
| F-18 |
BUBBLR INC.
(formerly U.S. Wireless Online, Inc.)
Consolidated Statement of Changes in Stockholders’ Equity
For the years ended December 31, 2020 and 2019
| 2019
Series A Preferred Stock | Series
B Preferred Stock | Common Stock | |||||||||||||||||||||||||||||||||||||||||
| Number of Shares | Amount | Number of Shares | Amount | Number of Shares | Amount | Additional
Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||
| Balance - December 31, 2018 | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||||||||
| Common shares issued for debt conversion | |||||||||||||||||||||||||||||||||||||||||||
| Common shares issued for cash | |||||||||||||||||||||||||||||||||||||||||||
| Special 2019 A Preferred Treasury Shares | ( | ) | ( | ||||||||||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||
| Balance - December 31, 2019 | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Common shares issued for debt conversion | |||||||||||||||||||||||||||||||||||||||||||
| Common shares issued for cash | |||||||||||||||||||||||||||||||||||||||||||
| Reverse acquisition recapitalization | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | ( | ) | ( | ||||||||||||||||||||||||||||||||||||||||
| Balance - December 31, 2020 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-19 |
| BUBBLR INC. |
| (formerly U.S. Wireless Online, Inc.) |
| Consolidated Statement of Cashflows |
| For the years ended | |||||||
| December 31, | |||||||
| 2020 | 2019 | ||||||
| Cash Flows from Operating Activities: | |||||||
| Net loss | $ | ( | ) | $ | ( | ||
| Adjustments for: | |||||||
| Net loss to net cash used in operating activities: | |||||||
| Loss on disposal of fixed asset | |||||||
| Impairment of intangible asset | |||||||
| Unrealized loss on investment | |||||||
| Amortization of intangible asset | |||||||
| Depreciation | |||||||
| Changes in operating assets and liabilities: | |||||||
| Decrease (increase) in accounts receivable | ( | ||||||
| Increase in accrued interest | |||||||
| Increase (decrease) in accounts payable | ( | ||||||
| Net cash used in operating activities | ( | ) | ( | ||||
| Cash flows from investing activities | |||||||
| Proceeds from repayments on advances receivable | |||||||
| Purchase of fixed assets | ( | ) | ( | ||||
| Purchase of intangible assets | ( | ) | ( | ||||
| Purchase of investments | ( | ||||||
| Net cash used in investing activities | ( | ) | ( | ||||
| Cash flows from financing activities | |||||||
| Proceeds from loans payable | |||||||
| Repayment of loans payable | ( | ) | |||||
| Repayment of loans payable - related parties | ( | ) | |||||
| Proceeds from loans payable - related parties | |||||||
| Purchase of Special 2019 Series A preferred share as treasury stock | ( | ||||||
| Proceeds from issuance of pre-merger common stock | |||||||
| Proceeds from issuance of convertible notes | |||||||
| Net cash used in financing activities | |||||||
| Effects of exchange rate changes on cash | ( | ) | |||||
| Net Change in Cash | ( | ) | |||||
| Cash - Beginning of Year | |||||||
| Cash - End of Year | $ | $ | |||||
| Supplemental information: | |||||||
| Cash paid for interest | $ | $ | |||||
| Cash paid for taxes | $ | $ | |||||
| Non-cash investing and financing activities | |||||||
| Common stock issued for conversion of debt | $ | $ | |||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-20 |
BUBBLR INC.
(formerly U.S. Wireless Online, Inc.)
Notes to the Consolidated Financial Statements
December 31, 2020 and 2019
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 October 22, 2019)
and became a
Bubblr Inc. is a Mobile Application software company that is currently developing its disruptive Internet Search Mechanism and seeking license opportunities for a next-generation solution designed to create an alternative economic model.
Stock Split
Share Exchange and Reorganization
On or about March 26, 2020
(the “Effective Date”), Bubblr Holdings Ltd merged into Bubblr Inc. (previously UWRL) and became a
Pursuant to the terms of the share exchange agreement, Bubblr issued shares of its unregistered common stock to the shareholders of Bubblr Holdings in exchange for shares of Bubblr Holding’s common stock, representing 100% of its issued and outstanding common stock. Bubblr Holdings became a wholly owned subsidiary of Bubblr.
For financial accounting purposes, this transaction was treated as a reverse acquisition by Bubblr Holdings and resulted in a recapitalization with Bubblr Holdings being the accounting acquirer and Bubblr Inc. as the legal acquirer. The consummation of this reverse acquisition resulted in a change of control, management, and business direction. Accordingly, the historical financial statements prior to the acquisition are those of the accounting acquirer, Bubblr Holdings and have been prepared to give retroactive effect to the reverse acquisition completed on the Effective Date and represent the operations of Bubblr Holdings. The consolidated financial statements after the acquisition date, March 26, 2020, include the balance sheets of both companies at historical cost, the historical results of Bubblr Holdings and the results of the consolidated entity from the acquisition date forward. All share and per share information in the accompanying consolidated financial statements and footnotes has been retroactively restated to reflect the recapitalization.
Going Concern Matters
The accompanying consolidated
financial statements have been prepared in conformity with GAAP, which contemplates the Company’s continuation as a going concern.
The Company incurred a 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 14 – Subsequent Events.
| F-21 |
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 has instituted some and may take additional 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 at December 31, 2020. The full extent of the future impacts of COVID-19 on the Company’s operations is uncertain. A prolonged outbreak could have a material adverse impact on financial results and business operations of the Company, including the timing and ability of the Company to collect accounts receivable and the ability of the Company to continue to provide high quality services to its clients. 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.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and are presented in US dollars. The Company uses the accrual basis of accounting and has adopted a December 31 fiscal year end.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and all of its wholly owned subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation.
The company has 3 wholly owned subsidiaries:
Bubblr Holdings Limited, incorporated in England December 6, 2016
Bubblr Holdings wholly owns:
Bubblr Limited, incorporated in England April 25, 2014
Bubblr CLN Limited, incorporated in England March 9, 2020
Bubblr Limited currently manages the Bubblr development program and offers the Bubblr products and services in the U.K. region.
| F-22 |
Bubblr CLN Limited is a special vehicle company, incorporated to hold the 2020 CLN notes and has no ongoing operations.
Bubblr holdings has no ongoing operations.
Bubblr Holdings Ltd, Bubblr Ltd and Bubblr CLN all have their principal offices at 15 Westferry Circus, Canary Wharf, London E14 4HD.
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.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash and highly liquid investments with remaining maturities of less than ninety days at the date of purchase. We maintain cash and cash equivalent balances with financial institutions that exceed federally insured limits. We have not experienced any losses related to these balances, and we believe credit risk to be minimal. The Company does not have any cash equivalents.
Accounts Receivable
Accounts receivables are recorded in accordance with ASC 310, “Receivables.” Accounts receivables are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company does not currently have any amount recorded as an allowance for doubtful accounts. Based on management’s estimate and based on all accounts being current, the Company has not deemed it necessary to reserve for doubtful accounts at this time.
During the year ended December 31, 2020 and 2019, the Company recorded bad debt of $nil and $nil, respectively.
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 year ended December 31, 2020 and 2019, the following outstanding stock, was excluded from the computation of diluted net loss per share as the result of the computation was anti-dilutive.
| December 31, | |||||||
| 2020 | 2019 | ||||||
| (Shares) | (Shares) | ||||||
| Series B Preferred Stock | |||||||
| Convertible Notes | |||||||
| Total | |||||||
| F-23 |
Leases
We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities - current, and operating lease liabilities - noncurrent on the balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our balance sheets.
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
The Company leases office space that meets the definition of a short-term lease because the lease term is 12 months or less. Consequently, consistent with Company’s accounting policy election, the Company does not recognize the right-of-use asset and the lease liability arising from this lease.
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.
Research and Development
Research and Development costs are evaluated by the Company to determine if they meet the requirements to be capitalized as Intellectual property. The criteria the company uses to determine the treatment of research and development are:
| · | There is a clearly defined project |
| · | Expenditure is separately identifiable |
| · | The project is commercially viable |
| · | The project is technically feasible |
| · | Project income is expected to outweigh cost |
| · | Resources are available to complete the project |
Any research and development costs that do not meet the requirements are expensed in the period in which they occur.
United Kingdom tax incentive reduces company Research and Development costs by offering tax offsets for eligible Research and Development expenditure. Eligible companies with a turnover of less than $20 million receive a refundable tax offset, allowing the benefit to be paid as a cash refund if they are in a tax loss position
For the year ended December 31, 2020 and 2019 the
Company received other income of $
| F-24 |
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.
Property and Equipment
Property and equipment are stated at cost. Depreciation is computed using the straight-line method. The depreciation and amortization methods are designed to amortize the cost of the assets over their estimated useful lives, in years, of the respective assets as follows:
| Computer equipment | ||||
| Fixtures and Furniture | ||||
| Vehicles |
Maintenance and repairs are charged to expense as incurred. Improvements of a major nature are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in income.
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.
| December 31, | ||||
| 2020 | 2019 | |||
| Year -end GBP£:US$ exchange rate | ||||
| Annual 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 $
Fair Value of Financial Instruments
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) establishes a framework for all fair value measurements and expands disclosures related to fair value measurement and developments. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
| F-25 |
ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories:
| · | Level 1—Quoted market prices for identical assets or liabilities in active markets or observable inputs. |
| · | Level 2—Significant other observable inputs that can be corroborated by observable market data; and |
| · | Level 3—Significant unobservable inputs that cannot be corroborated by observable market data. |
The carrying amounts of cash, accounts receivable, advances receivable, accounts payable, accrued interest, convertible notes, loans payable and loans payable - related parties approximate fair value because of the short-term nature of these items.
The Company accounts for share-based compensation in accordance with ASC 718, “Compensation – Stock Compensation,” which requires all such compensation to employees and non-employees, including the grant of employee stock options, to be calculated based on its fair value at the measurement date (generally the grant date), and recognized in the consolidated statement of operations over the requisite service period or as vesting occurs.
The Company recorded in share-based compensation expense for the years ended December 31, 2020 and 2019.
Income Taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Accounting for 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 December 31, 2021 and 2020, 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”).
| F-26 |
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).
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.
Revenue Recognition
Revenue related to contracts with customers is evaluated utilizing the following steps in accordance with ASC 606, Revenue from Contracts with Customers”: (i) Identify the contract, or contracts, with a customer; (ii) Identify the performance obligations in the contract; (iii) Determine the transaction price; (iv) Allocate the transaction price to the performance obligations in the contract; (v) Recognize revenue when the Company satisfies a performance obligation.
Revenue recognized in 2019 was earned by consultancy services offered by the founder of the Company to third-parties. The Company is still evaluating application of ASC 606 to its planned revenue streams, as its mobile application and internet search mechanism products are still in the research and development stage.
Recent Accounting Pronouncements
In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes. This guidance will be effective for entities for the fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020 on a prospective basis, with early adoption permitted. We will adopt the new standard effective January 1, 2021 and do not expect the adoption of this guidance to have a material impact on our financial statements.
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 is currently assessing the impact of the adoption of this standard on its consolidated financial statements.
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.
| F-27 |
NOTE 3 – ACCOUNTS RECEIVABLE
As of December 31, 2020 and 2019, accounts receivable consisted of the following:
| December 31, | December 31, | ||||||
| 2020 | 2019 | ||||||
| Deposit (1) | $ | $ | |||||
| Share subscription receivable | |||||||
| UK VAT repayment | |||||||
| Total accounts receivable | $ | 14,367 | $ | 67,275 | |||
| (1) | Nominal change in the deposit value is due to exchange rate fluctuation. |
NOTE 4 – ADVANCES RECEIVABLE
As of December 31, 2020 and 2019, cash advances consisted of the following:
| December 31, | December 31, | ||||||
| 2020 | 2019 | ||||||
| Advance receivable -GW | $ | $ | |||||
| Advance receivable -JM | |||||||
| Advance receivable -LS | — | 6,557 | |||||
| Total advances receivable | $ | 79,411 | $ | 79,990 | |||
The Company received repayments on its advances of
$
No repayment or further advances were made during the years ended December 31, 2020 and 2019, and any nominal change in value is due to exchange rate fluctuation.
| F-28 |
NOTE 5 - PROPERTY AND EQUIPMENT
As of December 31, 2020 and 2019, property and equipment consisted of the following:
| Property, plant & equipment | |||||||||||||||
| Motor Vehicles | Computer Equipment | Office Equipment | Total | ||||||||||||
| Cost | |||||||||||||||
| At December 31, 2019 | $ | ||||||||||||||
| Additions | |||||||||||||||
| Disposals | ( | ) | ( | ||||||||||||
| Effects of currency translation | |||||||||||||||
| At December 31, 2020 | |||||||||||||||
| Less accumulated depreciation | |||||||||||||||
| At December 31, 2019 | |||||||||||||||
| Depreciation expense | |||||||||||||||
| Effects of currency translation | |||||||||||||||
| At December 31, 2020 | |||||||||||||||
| Net book value | |||||||||||||||
| At December 31, 2020 | |||||||||||||||
| At December 31, 2019 | $ |
| Motor Vehicles | Computer Equipment | Office Equipment | Total | ||||||||||||
| Cost | |||||||||||||||
| At December 31, 2018 | $ | $ | $ | $ | |||||||||||
| Additions | |||||||||||||||
| Effects of currency translation | ( | ) | ( | ||||||||||||
| At December 31, 2019 | |||||||||||||||
| Less accumulated depreciation | |||||||||||||||
| At December 31, 2018 | |||||||||||||||
| Charge for the year | 622 | 1,451 | 30 | 2,103 | |||||||||||
| Effects of currency translation | (75 | ) | (89 | ) | — | (164) | |||||||||
| At December 31, 2019 | |||||||||||||||
| Net book value | |||||||||||||||
| At December 31, 2019 | $ | $ | $ | $ | |||||||||||
| At December 31, 2018 | $ | $ | $ | $ | |||||||||||
| F-29 |
NOTE 6 – INVESTMENTS
Investments are measured at fair value at each reporting period, with fluctuations reported as unrealized gains or losses in the Other Income (Expenses) section of the Statements of Operations.
As of December 31, 2020 and 2019, Investments consisted of the following:
| Investment | Total | ||||||
| At December 31, 2019 | $ | $ | |||||
| Unrealized loss | ( | ) | ( | ||||
| Effects of currency translation | ( | ) | ( | ||||
| At December 31, 2020 | $ | $ | |||||
| At December 31, 2019 | $ | $ | |||||
In 2019, the Company purchased a
In the year, the fair value of the investment
was assessed. As a result, the carrying amount of E& Supplements Ltd. was written down to $nil, resulting in an unrealized loss of
$
NOTE 7 - INTANGIBLE ASSETS
Patents
A Patent on the Internet-Search Mechanism
(“IBSM”) has been granted in South Africa and is currently pending in the following areas: United States, Canada, Australia,
New Zealand, European Union, 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 granted, amortization is provided
on a straight-line basis on all patents over its expected useful life 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 the following trademarks
| Name | Type | Class | Status | Territory | ||||||||
| Citizens Journalist | Word & Mark | 9 & 38 | registered | European Union | ||||||||
| Citizens Journalist | Word | 9 & 38 | registered | United Kingdom | ||||||||
| BAU Not OK | Word | 9 & 38 | registered | United Kingdom | ||||||||
| Newzmine | Word | 9 & 38 | registered | United Kingdom | ||||||||
| Citizens Journalist | Word & Mark | 9, 38, 41 & 42 | filed | United States |
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. Trademark impairment of $
| F-30 |
As of December 31, 2020 and 2019, trademarks consisted of the following:
| December 31, | December 31, | ||||||
| 2020 | 2019 | ||||||
| Trademarks: | |||||||
| NewzMineTM | $ | $ | |||||
| Citizens Journalist™ | |||||||
| $ | $ | ||||||
As of December 31, 2020 and 2019, intangible assets consisted of the following:
| Patents | Trademarks | Intellectual Property | Capitalized Acquisition Costs | Total | |||||||||||||||
| At December 31, 2019 | $ | $ | $ | $ | $ | ||||||||||||||
| Additions | |||||||||||||||||||
| Impairment | ( | ) | ( | ||||||||||||||||
| Effects of currency translation | ( | ) | |||||||||||||||||
| At December 31, 2020 | $ | $ | $ | $ | $ | ||||||||||||||
| Less accumulated amortization | |||||||||||||||||||
| At December 31, 2019 | $ | $ | $ | $ | $ | ||||||||||||||
| Depreciation expense | |||||||||||||||||||
| Effects of currency translation | |||||||||||||||||||
| At December 31, 2020 | $ | $ | $ | $ | $ | ||||||||||||||
| Net book value | |||||||||||||||||||
| At December 31, 2020 | $ | $ | $ | $ | $ | ||||||||||||||
| At December 31, 2019 | $ | $ | $ | $ | $ | ||||||||||||||
| Cost | Patents | Intellectual Property | Total | ||||||||
| At December 31, 2018 | $ | $ | $ | ||||||||
| Additions | |||||||||||
| Effects of currency translation | |||||||||||
| At December 31, 2019 | $ | $ | $ | ||||||||
| Less accumulated amortization | |||||||||||
| At December 31, 2018 | $ | $ | $ | ||||||||
| Charge for the year | |||||||||||
| Effects of currency translation | |||||||||||
| At December 31, 2019 | $ | $ | $ | ||||||||
| Net book value | |||||||||||
| At December 31, 2019 | |||||||||||
| At December 31, 2018 | $ | $ | $ | ||||||||
| F-31 |
Based on the carrying value of definite-lived intangible assets as of December 31, 2020, we estimate our amortization expense for the next five years will be as follows:
| Year Ended December 31, | Patents | Intellectual Property | Capitalized Acquisition Costs | Total | |||||||||||||
| 2021 | $ | $ | $ | $ | |||||||||||||
| 2022 | |||||||||||||||||
| 2023 | |||||||||||||||||
| 2024 | |||||||||||||||||
| 2025 | |||||||||||||||||
| Thereafter | |||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||
NOTE 8 - CONVERTIBLE NOTES PAYABLE
2018 Convertible Notes: In 2018 the Company issued
37 Convertible Notes. The interest due on the notes was
2019 Convertible Notes: In 2019, the Company issued
one promissory note for the principal sum of $
The 2019 Convertible note was converted May 3, 2021 to common shares of the Company.
2020 Convertible Notes: In 2020, the Company issued
22 Convertible Notes for the principal sum of $
At December 31, 2020 and 2019, convertible notes consisted of the following
| 2020 | 2019 | ||||||
| 2018 convertible notes | $ | $ | |||||
| 2019 convertible notes | |||||||
| 2020 convertible notes | |||||||
| Total convertible notes payable | |||||||
| Less: current portion of convertible notes | |||||||
| Long-term convertible notes | $ | $ | |||||
During the years ended December 31, 2020 and 2019,
the Company recorded $
| F-32 |
NOTE 9 – LOAN PAYABLE
On November 12, 2019, the Company entered into a financing
arrangement to purchase a vehicle. The term of this loan is
At December 31, 2020, future minimum payments under the loan, are as follows:
| December 31, | ||||
| 2021 | $ | |||
| 2022 | ||||
| 2023 | ||||
| 2024 | ||||
| Less: Imputed interest | ( | |||
| Loan payable | ||||
| Loan payable - current | ||||
| Loan payable - non-current | $ | |||
NOTE 10 - RELATED PARTY TRANSACTIONS
Loans Payable - Related Parties
The Company has a loan from our Founder of $
The Company also received two loans from minority shareholders during 2020 totaling (2019: ). The loan of is non-interest bearing and matured on January 31, 2021. The loan of carries an interest rate of and matured on December 31, 2020. Once matured, both loans are repayable on demand.
NOTE 11 - INCOME TAXES
The Company provides for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.
For the years ended December 31, 2020 and 2019, the local (“United States of America”) and foreign components of loss before income taxes were comprised of the following:
| Year Ended | |||||||
| December 31, | |||||||
| 2020 | 2019 | ||||||
| Tax jurisdiction from: | |||||||
| - Local | $ | ( | ) | $ | |||
| - Foreign | ( | ) | ( | ||||
| Loss before income taxes | $ | ( | ) | $ | ( | ||
| F-33 |
The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the statutory rate to the income tax amount recorded as of December 31, 2020 and 2019, are as follows:
| Year Ended | |||||||
| December 31, | |||||||
| 2020 | 2019 | ||||||
| Net Operating loss carryforward | $ | $ | |||||
| Effective tax rate | |||||||
| Deferred tax asset | |||||||
| Foreign taxes | ( | ) | ( | ||||
| Less: valuation allowance | ( | ) | ( | ||||
| Net deferred tax asset | $ | $ | |||||
The Company has provided for a full valuation allowance against the deferred
tax assets, on the expected future tax benefits from the net operating loss carryforwards, as the management believes it is more likely
than not that these assets will not be realized in the future. The valuation allowance increased by $
United States of America
Bubblr Inc. is registered in the State of Wyoming and is subject to the
tax laws of United States of America at a standard tax rate of
As of December 31, 2020, the operations in the United States of America
incurred approximately $
The Company’s tax returns are subject to examination by United States tax authorities beginning with the year ended December 31, 2017.
United Kingdom
The Company’s subsidiaries operating in the United Kingdom (“UK”) are subject to tax at a standard income tax rate of 19% on the assessable income arising in the UK during its tax year.
As of December 31, 2020, the operations in the UK incurred $
The Company’s tax returns are subject to examination by HM Revenue & Customs, for the years ended 2019 and 2020.
NOTE 12 - 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.
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Special 2019 Series A Preferred Stock
The Company has designated one ()
share of Series A Preferred Stock, par value .
Bubblr Limited paid ,
in a private transaction to acquire the shares in November 2019. As a result of the reverse merger with Bubblr Limited, the Company essentially
reacquired these shares, and as such has reported them as treasury stock upon consolidation at its $
Convertible Class A Preferred Stock
As of December 31, 2020 and 2019, the Company had and shares of Convertible Class A preferred stock issued and outstanding, respectively.
On March 31, 2021, the Company amended and restated its Articles of Incorporation, pursuant to which the Convertible Class A Preferred stock was retired.
Series B Preferred Stock
The Company had designated shares of Series B Preferred Stock, par value .
On November 6, 2020, the Company issued
shares of Series B Preferred stock to an officer of the Company for $
As of December 31, 2020 and 2019, the Company had and , shares of Series B preferred stock issued and outstanding, respectively.
On March 31, 2021, the Company amended and restated its Articles of Incorporation, pursuant to which the Convertible Series B Preferred stock was retired.
Convertible Preferred Series C Stock
The Company had designated shares of Convertible preferred Series C Stock par value .
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As of December 31, 2020 and 2019, the Company had shares of Convertible Preferred Series C stock issued and outstanding.
On March 31, 2021, the Company amended and restated its Articles of Incorporation, pursuant to which the Convertible Preferred Series C Stock was retired.
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 Company is sought.
During the year ended December 31, 2020, the Company issued common shares as follows:
| · | shares for conversion
of debt of $ |
| · | shares for proceeds
of $ |
During the year ended December 31, 2019, the Company issued common shares as follows:
| · | shares for the conversion
of debt of $ |
| · | shares for proceeds
of $ |
As at December 31, 2020 and 2019, the Company had and shares of common stock issued and outstanding, respectively.
NOTE 13 - COMMITMENTS AND CONTINGENCIES
In 2020 and
2019, the Company paid $
See Note 14 – Subsequent Events for a description of our commitments to various officers, directors, and consultants entered into after December 31, 2021.
NOTE 14 - SUBSEQUENT EVENTS
The Company has evaluated subsequent events through October 15, 2021, the date of issuance of these consolidated financial statements.
On or about January 18, 2021, Bubblr Limited caused a controlling interest in the Company to be conveyed to an officer of the Company. Upon closing, an officer of the Company acquired 60% voting control of the Company.
On or about January 18, 2021, the two (2) shares of Series B Preferred Stock were converted into 2,650 shares of common stock.
On January 31, 2021, the Company issued 306,120 shares of common stock to Barr L Shoob, Matt Loab and Otto Berkes in consideration of services rendered in the provision of the Advisory Board.
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On January 31, 2021, the Company issued 24,000 shares of common stock to PCG Advisory Inc in consideration of investor relations services rendered
On March 31, 2021 the Company amended and restated its Articles of Incorporation. In doing so, it retained one class of preferred stock “Special 2019 Series A Preferred Stock”. All other previous classes of preferred stock were retired.
On or about May 3, 2021, the Company issued 7,000,000 shares of common stock to a third-party in settlement of the agreement dated March 31, 2021 and subsequent judication of April 23, 2021 of the United States District Court for the District of Maryland Northern Division, an order approving, among other things, fairness of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended (the “Securities Act”), against the past-due obligations and accounts payable of the Company. The debt consisted of the 2019 Convertible promissory Note of $25,000, plus an accrued consultancy fee of $50,000
On June 26, 2021, the Company issued 204,080 shares of common stock to Cecil Peters and Richard L. Willard in consideration of services rendered in the provision of the Advisory Board.
On or about July 1, 2021 the Company amended the employment agreement with Steven Saunders, our Chief Executive Officer and Director. The term is three years. Mr. Saunders is to receive monthly cash compensation of $15,000, reduced by $4,200 until at least $5,000,000 funding has been received.
On or about July 1, 2021 the Company amended into employment agreement with Stephen Morris, our Founder and CTO, the term is three years. Mr. Morris is to receive monthly cash compensation of $15,000, reduced by $5,750 until at least $5,000,000 has been received.
On or about August 15, 2021 the Company has entered into an employment agreement with Rik Willard to act as Head of Strategy of the Company and as Director. The term is 1 year. Mr. Willard is to receive monthly cash compensation of $15,000, reduced by $7,500 until at least $5,000,000 funding has been received through the Reg A offering. Mr. Willard was also granted a signing bonus of 102,040 restricted shares.
On or about October 1, 2021, the Company has entered into a consulting contract employment agreement with Neeta Shah to act as the CFO of the Company. Mrs. Shah is to receive monthly cash compensation of $7,500 until at least $5,000,000 funding has been received, whereas Mrs. Shah will become a full-time employee on a monthly cash compensation of $15,000. Mrs. Shah will also be granted a signing bonus of 51,020 restricted shares.
On or about October 11, 2021 the Company issued 33,000 shares for Investor relations services, as per the contract signed July 1, 2021 and 51,020 shares for CFO services
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Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. Other Expenses of Issuance and Distribution
The estimated costs of this Offering are as follows:
| Expenses* | ||||
| Securities and exchange Commission Registration Fee | $ | 2,169.13 | ||
| Transfer Agent Fees | $ | 2,000.00 | ||
| Accounting Fees and Expenses | $ | 10,000.00 | ||
| Legal Fees and Expenses | $ | 6,000.00 | ||
| Total* | $ | 20,169.13 |
* All amounts are estimates, other than the SEC's registration fee
We are paying all expenses of the Offering listed above. No portion of these expenses will be paid by the selling security holders. The selling security holders, however, will pay any other expenses incurred in selling their shares, including any brokerage commissions or costs of sale.
ITEM 14. Indemnification of Directors and Officers
ITEM 15. Recent Sales of Unregistered Securities
In the two years preceding the filing of this registration statement, we have issued and sold the following securities that were not registered under the Securities Act of 1933, as amended:
On September 9, 2020, we issued 127,811,328 shares of common stock in connection with the acquisition of Bubblr Limited.
On September 9, 2020, we issued 4,574,453 shares of common stock in connection with the acquisition of Bubblr Limited.
On January 18, 2021, we issued 2,650 shares of common stock in conversion of the Series B Preferred Stock.
On January 31, 2021, we issued 330,120 shares of common stock for services.
On May 3, 2021, we issued 7,000,000 shares of common stock for the settlement of debt.
On June 28 2021, we issued 204,080 shares of common stock for services.
On October 11, 2021, we issued 51,020 shares to Neeta Shah, as per her consulting agreement October 01
On October 11, 2021, we issued 33,000 shares for Investor Relation services, as per the contract signed July 1, 2021
The offers, sales, and issuances of the securities described above were deemed to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder as transactions by an issuer not involving a public offering. The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions was an accredited or sophisticated person and had adequate access, through employment, business or other relationships, to information about us.
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ITEM 16. Exhibits and Financial Statement Schedules
(a) Exhibits
See the Exhibit Index immediately following the signature page included in this registration statement, which is incorporated herein by reference.
(b) Financial Statement Schedules.
See “Index to Financial Statements” which is located on page __ of this prospectus.
ITEM 17. Undertakings
(A) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increases or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i) If the registrant is relying on Rule 430B:
(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
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(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or
(ii) If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(6) To provide to the underwriter at the closing specified in the underwriting agreements certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.
(B) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(C) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on February 11, 2022.
| By: | /s/ Rik Willard |
| Rik Willard | |
| Chief Executive Officer, Principal Executive Officer and Director | |
| By: | /s/ Stephen Morris |
| Stephen Morris | |
| Chief Technology Officer, Founder, President & Director |
| By: | /s/ Virginia Mackin |
| Virginia Mackin | |
| Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer |
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Rik Willard and Steven Morris with full power to act alone and without the others, his true and lawful attorney-in-fact, with full power of substitution, and with the authority to execute in the name of each such person, any and all amendments (including without limitation, post-effective amendments) to this registration statement, to sign any and all additional registration statements relating to the same offering of securities as this registration statement that are filed pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file such registration statements with the Securities and Exchange Commission, together with any exhibits thereto and other documents therewith, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, which amendments may make such other changes in the registration statement as the aforesaid attorney-in-fact executing the same deems appropriate.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| By: | /s/ Rik Willard |
|
Rik Willard Chief Executive Officer, Principal Executive Officer and Director | |
| February 11, 2022 | |
| By: | /s/ Stephen Morris |
| Stephen Morris | |
| Chief Technology Officer, Founder, President & Director | |
|
February 11, 2022
| |
| By: | /s/ Steven Saunders |
| Steven Saunders | |
| Chief Commercial Officer & Director | |
| February 11, 2022 |
| By: | /s/ Matthew Loeb |
|
Matthew Loeb Chairman and Director | |
| February 11, 2022 |
| By: | /s/ Virginia Mackin |
| Virginia Mackin | |
| Interim Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer | |
| February 11, 2022 |
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EXHIBIT INDEX
| Exhibit No. | Exhibit Description | |
| 3.1 | Amended and Restated Articles of Incorporation of Bubblr Inc., a Wyoming corporation (1) | |
| 3.2 | Bylaws of Bubblr Inc. (1) | |
| 4.1 | Form of Convertible Promissory Note(1) | |
| 5.1 | Consent of The Doney Law Firm (with consent to use)** | |
| 10.1 | Form of Note Purchase Agreement(1) | |
| 10.2 | Employment Agreement(1) | |
| 10.3 | Employment Agreement(1) | |
| 10.4 | Employment Agreement(1) | |
| 10.5 | Loan Agreement (2) | |
| 10.6 | Common Stock Purchase Agreement(3) | |
| 10.7 | Registration Rights Agreement(3) | |
| 21.1 | List of Subsidiaries(1) | |
| 23.1 | Consent of Pinnacle Accountancy Group of Utah** | |
| 23.2 | Consent of the Doney Law Firm (contained in Exhibit 5.1)** | |
| 24.1 | Power of Attorney (contained on signature page hereto)** |
** filed herewith
| (1) | Incorporated by reference to the Form S-1, filed by the Company with the Securities and Exchange Commission on November 9, 2021. |
| (2) | Incorporated by reference to the Form S-1/A, filed by the Company with the Securities and Exchange Commission on December 23, 2021.
| |
| (3) | Incorporated by reference to the Form 8-K, filed by the Company with the Securities and Exchange Commission on February 2, 2022. |
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