NOTE 13 - STOCKHOLDERS’ EQUITY (DEFICIT)

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

NOTE 13 - STOCKHOLDERS’ EQUITY (DEFICIT)

NOTE 13 - STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred Stock

The Company has authorized 25,000,000 preferred shares with a par value of $0.001 per share. The Board of Directors is authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes.

Special 2019 Series A Preferred Stock

The Company has designated one (1) share of Series A Preferred Stock, par value $0.001.

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.

The holder of the Special 2019 Series A Preferred Stock is entitled to 60% of all votes 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.

On September 6, 2022, the Company repurchased for $60,000 and cancelled the Special 2019 Series A Preferred Stock held by Mr. Morris via the issuance of related party note payable (see Note 10 - Related Party Transactions).

As of December 31, 2022 and 2021, the Company had 0 and 1 share, respectively, of 2019 Series A Preferred stock issued and outstanding.

Series B Preferred Stock

At December 31, 2022 and 2021, the Company had designated 0 and 0 shares of Series B Preferred Stock, par value $0.001. 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:

Holders of the Series B Preferred Stock shall after two years of issuance, convert this Class B Preferred Stock based on each Class B Preferred Share equaling .00001% of the total issued and outstanding Common shares of the Company. In the event of a merger, reorganization, recapitalization or similar event of or with respect to the Corporation (other than a Corporate Change in which the Corporation is the surviving entity), this Class B Preferred Stock shall be converted based on each Class B Preferred Share equaling .00001% of the total issued and outstanding shares of common stock of the Company.

During 2021, the Company converted the 2 shares of Series B Preferred to 2,650 shares of common stock valued at $6,000 to the Company’s Founder in satisfaction of debt (see Note 10 - Related Party Transactions).

As of December 31, 2022 and 2021, the Company had 0 shares of Series B preferred stock issued and outstanding.

Series C Convertible Preferred Stock

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

During the year ended December 31, 2022, the Company declared dividends of $64,292, of which $22,133 was paid via the issuance of 116,799 shares of common stock, $20,026 was paid in cash, and $22,133 remained declared but unpaid at December 31, 2022.

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

• If all of the Series C Convertible Preferred Stock are redeemed within 90 calendar days from the issuance date thereof, the Company shall have the right to redeem the Series C Convertible Preferred Stock upon three business days of written notice at a price equal to 115% of the Stated Value together with any accrued but unpaid dividends.

•
If all of the Series C Convertible Preferred Stock are redeemed after 90 calendar days from the issuance date thereof, the Company shall have the right to redeem the Series C Convertible Preferred Stock upon three business days of written notice at a price equal to 120% of the Stated Value together with any accrued but unpaid dividends; and

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

The Series C Convertible Preferred Stock will vote together with the common stock on an as-converted basis subject to the Beneficial Ownership Limitations (as set forth in the Certificate of Designation).

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

On March 4, 2022, the Company entered into a Securities Purchase Agreement (the “GHS Securities Purchase Agreement”) with GHS Investments, LLC (“GHS”), whereby GHS agreed to purchase, in tranches, up to $700,000 of the Company’s Series C Convertible Preferred Stock in exchange for 700 shares of Series C Convertible Preferred Stock.

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

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

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

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

On March 9, 2022, the Company issued 168 shares of Series C Convertible Preferred stock to Proactive Capital Partners LP as per the Securities Purchase Agreement. Proactive delivered gross proceeds of $155,000 to the Company (excluded were legal fees).

On April 24, 2022 the Company issued the second tranche of 200 shares of Series C Convertible Preferred Stock and 562,149 warrant shares as per its Securities Purchase Agreement (the “GHS Securities Purchase Agreement”) with GHS Investments, LLC (“GHS”), of March 4, 2022. GHS delivered gross proceeds of $184,000 to the Company (excluded were legal fees and a transaction fee charged by Spartan Capital).

On May 25, 2022 the Company issued the third tranche of 100 shares of Series C Convertible Preferred Stock and 281,074 warrant shares as per its Securities Purchase Agreement (the “GHS Securities Purchase Agreement”) with GHS Investments, LLC (“GHS”), of March 4, 2022. GHS delivered gross proceeds of $92,000 to the Company (excluded were legal fees and a transaction fee charged by Spartan Capital).

On June 24, 2022 the Company issued the fourth tranche of 100 shares of Series C Convertible Preferred Stock and 281,074 warrant shares as per its Securities Purchase Agreement (the “GHS Securities Purchase Agreement”) with GHS Investments, LLC (“GHS”), of March 4, 2022. GHS delivered gross proceeds of $92,000 to the Company (excluded were legal fees and a transaction fee charged by Spartan Capital).

On September 7, 2022, our wholly owned subsidiary, Bubblr Limited, entered into a new loan agreement (the “Loan Agreement”) with Mr. Morris for £434,060 ($525,291USD at December 31, 2022). In order to enter into the new loan, GHS Investments, LLC agreed to waive a prohibition on borrowing over $200,000 found in our Certificate of Designation for the Series C Preferred Stock, in exchange for our company issuing 345,220 shares of common stock: 281,000 shares of common stock to GHS and 64,220 shares of common stock to Proactive. The resulting common shares were valued at $71,703, which was recorded as interest expense.  

As a result of the above transactions, the Company received total net proceeds of $789,000, of which $721,275 has been allocated to the warrants and Series C Preferred Stock based on the warrants’ fair market values on each contract date, with the residual loss of $28,043 allocated to day-one loss on warrant liability associated with the March 2022 issuances, and excess proceeds of $95,768 allocated to the Series C Preferred Stock associated with the April, May, and June 2022 issuances. As at December 31, 2022 and 2021, the Company had 903 and 0 shares of Series C Preferred Stock issued and outstanding, respectively.

Common Stock

The Company has authorized 3,000,000,000 common shares with a par value of $0.01 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

During the years ended December 31, 2022 and 2021, the Company issued common shares as follows:

Year ended December, 2021

• 561,220 shares for Advisory Board services valued at $1,463,355.

• 57,000 shares for Investor Relations services valued at $131,610.

• 2,651 shares for conversion of B preferred shares in satisfaction of related party debt of $6,000.

• 7,000,000 shares for the conversion of debt valued at $70,000. The debt consisted of the 2019 Convertible promissory Note of $25,000, plus an accrued consulting fee of $50,000. The Company recorded other income with respect to a gain on the settlement of the accrued consulting fee of $5,000 (see Note 8 - Convertible Note Payable)

Year ended December 31, 2022

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

• 7,874,108 shares for Investor Relations and Consulting services valued at $2,044,061.

• 140,000 shares for Debt conversion of Investor Relations fee valued at $28,000.

• 793,039 shares as commitment shares under the Equity Financing Agreement valued at $379,814.  

• 345,220 shares as compensation for loan waiver under Series C Preferred Stock share purchase agreement valued at $71,703.

• 4,706,096 shares for conversion of convertible notes issued in 2021 valued at $2,353,048.

• 116,799 shares for dividend due on Series C Preferred Stock to September 30, 2022 valued at $22,133.

As at December 31, 2022 and 2021, the Company had 154,309,318 and 140,186,096 shares, respectively, of common stock issued and outstanding.

Warrants

The Company identified conversion features embedded within warrants issued during the year ended December 31, 2022. The Company has determined that the conversion feature of the Warrants represents an embedded derivative since the conversion price includes a reset provision which could cause adjustments in redemption value and number of shares issued upon exercise (see Note 11 - Warrant Liability).

A summary of activity during the period ended December 31, 2022 follows:

	Warrants Outstanding
	Number of		Weighted Average		Weighted Average Remaining life
	Warrants		Exercise Price		(years)
Outstanding, December 31, 2021		—	$	—		—
Granted		2,538,101		0.32		4.27
Exercised		—		—		—
Forfeited/canceled		—		—		—
Outstanding, December 31, 2022		2,538,101	$	0.32		4.27
Exercisable Warrants, December 31, 2022		2,538,101	$	0.32		4.27

The following table summarizes information relating to outstanding and exercisable warrants as of September 30, 2022:

Warrants Outstanding						Warrants Exercisable
Number of		Weighted Average Remaining		Weighted Average		Number of		Weighted Average
Warrants		Contractual life (in years)		Exercise Price		Shares		Exercise Price
	941,599		4.18	$	0.34		941,599	$	0.34
	472,205		4.19		0.34		472,205		0.34
	562,149		4.32		0.35		562,149		0.35
	281,074		4.40		0.22		281,074		0.22
	281,074		4.48		0.22		281,074		0.22
	2,538,101		4.27	$	0.32		2,538,101	$	0.32

As at December 31, 2022 the intrinsic value of the warrants is $0, as the price of the Company’s stock was below the warrant exercise price.

Equity Incentive Plan

On May 25, 2022, our board of directors and majority shareholders approved the adoption of the Bubblr, Inc. 2022 Equity Incentive Plan (the “2022 Equity Incentive Plan”) and, unless earlier terminated, will continue until May 25, 2032. A total of 28,400,000 shares of common stock may be issued under the 2022 Equity Incentive Plan. The purpose of the 2022 Equity Incentive Plan is to foster and promote our long-term financial success and increase stockholder value by motivating performance through incentive compensation. The 2022 Equity Incentive Plan is intended to encourage participants to acquire and maintain ownership interests in our company and to attract and retain the services of talented individuals upon whose judgment and special efforts the successful conduct of our business is largely dependent.

If the employee is terminated for cause, the employee will forfeit the Restricted Stock Units (“RSUs”) awarded to date.

During the year ended December 31, 2022, the Company issued pursuant to the 2022 Equity Incentive Plan, a total of 8,400,000 RSUs to two Company executives pursuant to their employment agreements. (See Note 14 - Commitments and Contingencies) 4,200,000 shares of performance-based stock compensation were scheduled to vest on each of June 1, 2023 and June 1, 2024, respectively. The Company had elected to treat the award as a single award of 8,400,000 shares that vests ratably over the vesting period.

The RSUs were valued at $2,259,600, based on the market price of the Company’s common stock on the respective grant dates of the agreements, which was $0.269 per share, and were to be recognized as compensation expense over their two-year vesting period on a straight-line basis. During the year ended December 31, 2022, the Company recorded stock-based compensation of $659,052 and had unrecognized stock compensation of $1,600,548 as of December 31, 2022. The remaining unvested award was scheduled to vest $1,129,800 and $470,748 during the years ended December 31, 2023 and 2024, respectively.

The award of 8,400,000 RSUs was forfeited by the executives upon their termination of employment on January 31, 2023, on which date the remaining unrecognized stock compensation of $1,600,548 was expensed in full. (See Note 15 – Subsequent Events)

Equity Financing Agreements

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

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

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

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

The registration statement on Form S-1 was effective as of June 24, 2022. During the year ended December 31, 2022 GHS has provided $0 under the EFA.

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