10-Q/A: Bubblr Inc. Files Amended Quarterly Report After Auditor Issues

Bubblr Inc. has filed an amended quarterly report for the period ending March 31, 2024, due to issues with its previous auditor and has reported a net loss of $460,867.

Summary

• Bubblr Inc. filed an amended quarterly report for the period ending March 31, 2024, due to an SEC order against their previous auditor, BF Borgers CPA PC.
• The company's new auditor, BCRG Certified Public Accountants, reviewed the financial information in the amended report.
• The company reported a net loss of $460,867 for the quarter, compared to a net loss of $254,336 for the same period last year.
• Revenue for the quarter was $1,504, a significant increase from no revenue in the same period last year.
• Operating expenses totaled $438,125, compared to $201,961 in the prior year.
• The company's current liabilities exceed current assets by $1,678,521 as of March 31, 2024.
• The company has an accumulated deficit of $16,095,315 as of March 31, 2024.
• Management intends to raise additional operating funds through equity and/or debt offerings.
• There is substantial doubt about the company's ability to continue as a going concern.

Sentiment

Score: 3

Explanation: The document highlights significant financial losses, a going concern issue, and material weaknesses in internal controls, which are major concerns for investors. While there are some positives like revenue growth and innovative products, the overall sentiment is negative due to the financial instability and operational challenges.

Positives

• The company generated $1,504 in revenue for the quarter, a significant increase from the same period last year.
• The company has a new auditor, BCRG Certified Public Accountants, which is a qualified, independent, PCAOB registered public accountant.
• The company is developing innovative AI platforms, including a community-centric super app and AI Seek.

Negatives

• The company reported a net loss of $460,867 for the quarter, a significant increase from the $254,336 loss in the same period last year.
• Operating expenses have increased significantly to $438,125.
• Current liabilities exceed current assets by $1,678,521.
• The company has an accumulated deficit of $16,095,315.
• There is substantial doubt about the company's ability to continue as a going concern.
• The company has identified material weaknesses in its internal control over financial reporting.

Risks

• The company's ability to continue as a going concern is in doubt due to its financial losses and working capital deficit.
• The company may not be able to raise additional operating funds through equity or debt offerings.
• The company has material weaknesses in its internal control over financial reporting.
• The company faces intense competition from larger companies with greater financial resources.
• The company is subject to various foreign and domestic laws and regulations that could impact its business.
• The company relies on key personnel and may struggle to retain or replace them.
• The company may not be able to achieve significant revenues or profitability.

Future Outlook

Management intends to raise additional operating funds through equity and/or debt offerings, but there is no assurance of success. The company is also exploring the sale or licensing of its patents and IP to secure funding.

Management Comments

• Management intends to raise additional operating funds through equity and/or debt offerings.
• Management concluded that as of March 31, 2024, our internal control over financial reporting was not effective because of the identification of material weaknesses.
• Our Management is committed to improving its internal controls when we have adequate resources.

Industry Context

The company operates in the rapidly evolving AI and online marketplace sectors, competing with larger, well-established companies. The company's focus on ethical AI and open-source platforms differentiates it from competitors.

Comparison to Industry Standards

• The company's revenue of $1,504 is significantly lower than established players in the AI and online marketplace sectors, such as Amazon, Google, and Facebook.
• The company's net loss of $460,867 indicates a significant struggle to achieve profitability, which is common for early-stage tech companies but concerning given the going concern issues.
• The company's reliance on related-party loans and the need for additional funding are typical for startups but highlight the financial risks.
• The company's focus on open-source platforms and ethical AI is a differentiating factor compared to competitors who often prioritize data collection and targeted advertising.

Related Party Transactions

• The company has loans payable to related parties, including Stephen Morris and Professor Paul Morrissey.
• Stephen Morris converted $821,431.87 in principal amount of promissory notes into 2,489,186 shares of common stock.

Stakeholder Impact

• Shareholders face significant risk due to the company's financial instability and going concern issues.
• Employees may be impacted by potential cost-cutting measures or the company's inability to continue operations.
• Customers may be affected by the company's ability to deliver its products and services.
• Creditors face the risk of non-payment due to the company's financial difficulties.

Next Steps

• The company plans to appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management.
• The company plans to adopt sufficient written policies and procedures for accounting and financial reporting.
• The company is exploring future fundraising options, including equity, debt, and the sale or licensing of its patents and IP.

Key Dates

Keywords

AI, Ethical Web, Generative AI, Super App, AI Seek, Open-Source Platform, Financial Reporting, Auditor, Internal Controls, Going Concern