BBLR.OIDBubblr INC
10-Q: Bubblr Inc. Reports First Quarter 2024 Results with Revenue Growth but Continued Losses
Sentiment:
Quarterly Report
Bubblr Inc. reported a net loss of $460,867 for the first quarter of 2024, despite generating $1,504 in revenue, marking a significant increase from the same period last year.
Capital raiseManagement intends to raise additional operating funds through equity and/or debt offerings.The company is exploring future fundraising options, including equity, debt, the sale of/or the licensing of the company's patent(s) and/or IP.
Worse than expectedThe company's net loss increased from $254,336 to $460,867 compared to the same period last year.The company's operating expenses increased significantly, outpacing the increase in revenue.The company's working capital deficit worsened from $1,392,300 to $1,678,521.
Summary
- Bubblr Inc. reported a net loss of $460,867 for the three months ended March 31, 2024, compared to a net loss of $254,336 for the same period in 2023.
- The company generated $1,504 in revenue for the first quarter of 2024, a substantial increase from no revenue in the first quarter of 2023.
- Operating expenses totaled $438,125 for the quarter, up from $201,961 in the prior year, with significant increases in general and administrative costs.
- The company's current liabilities exceed current assets by $1,678,521 as of March 31, 2024, raising concerns about its ability to continue as a going concern.
- Bubblr is developing an Ethical Web platform and AI Seek application, with plans to launch the platform commercially and license the AI technology to academic institutions.
- The company has a working capital deficit of $1,678,521 as of March 31, 2024, compared to $1,392,300 at the end of 2023.
- As of May 7, 2024, there were 159,690,447 outstanding shares of the company's common stock.
Sentiment
Score: 3
Explanation: The document highlights significant financial losses, a substantial working capital deficit, and material weaknesses in internal controls, which are major concerns for investors. While there is some positive news about revenue growth and product development, the overall financial health and operational challenges overshadow these aspects.
Positives
- The company generated $1,504 in revenue for the first quarter of 2024, a significant increase from no revenue in the same period last year.
- Bubblr is developing an Ethical Web platform and AI Seek application, with plans to launch the platform commercially and license the AI technology to academic institutions.
- The company has a patent on an internet search mechanism and has filed additional patents related to AI and data processing.
- The company's intellectual property has been independently valued at $4.7 billion in a hypothetical acquisition scenario.
Negatives
- The company's net loss for the quarter was $460,867, which is higher than the $254,336 loss in the first quarter of 2023.
- Operating expenses increased to $438,125, primarily due to higher general and administrative costs.
- The company's current liabilities exceed current assets by $1,678,521, indicating a substantial working capital deficit.
- The company has a working capital deficit of $1,678,521 as of March 31, 2024, compared to $1,392,300 at the end of 2023.
- 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 significant losses and working capital deficit.
- There is no assurance that the company will be able to raise additional operating funds through equity or debt offerings.
- The company faces intense competition from larger companies with greater financial resources.
- The company has identified material weaknesses in its internal control over financial reporting, which could lead to misstatements in its financial statements.
- The company's success depends on the acceptance of its products by the target market and its ability to compete effectively.
- The company's ability to generate significant revenues and achieve profitability is uncertain.
Future Outlook
The company plans to launch its community-centric super app platform commercially and license its AI Seek technology to academic institutions. Management intends to raise additional operating funds through equity and/or debt offerings.
Management Comments
- Management intends to raise additional operating funds through equity and/or debt offerings.
- Management believes that the company has competitive strengths and protection via its IP which is defensible under the umbrella protection of its granted patents.
- 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 companies and facing challenges related to data privacy and regulatory compliance. The company's focus on ethical technology and community empowerment differentiates it from many 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 need for significant improvement in financial performance to reach industry benchmarks.
- The company's working capital deficit of $1,678,521 is a major concern compared to industry standards, where companies typically maintain a positive working capital.
- The company's reliance on related-party loans is not uncommon for early-stage companies but may raise concerns about financial stability compared to companies with access to traditional financing.
- The company's focus on open-source and community-centric platforms is a unique approach compared to the proprietary models of many competitors.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Former Chief Commercial Officer, and Director | Steven Saunders | NA | 2023-01-31 | Separation Agreement |
| Former Chief Executive Officer, and Director | Rik Willard | NA | 2023-01-31 | Separation Agreement |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Internal Control Weaknesses | The company identified material weaknesses in its internal control over financial reporting, including lack of controls to validate data accuracy, limited written documentation, insufficient segregation of duties, insufficient personnel expertise, and ineffective oversight. | 2024-03-31 | These weaknesses could lead to misstatements in the financial statements and require remediation. |
Legal Proceedings
- The company is not currently a party to any legal proceedings that are believed to be material.
Related Party Transactions
- The company has loans from its founder, Stephen Morris, totaling $1,316,435 as of March 31, 2024.
- The company has a loan from Professor Paul Morrissey for $34,395 as of March 31, 2024.
Stakeholder Impact
- Shareholders face the risk of further dilution if the company raises additional capital through equity offerings.
- Employees may be affected by the company's financial instability and potential need for cost-cutting measures.
- Customers may benefit from the company's innovative products and services, but the company's financial challenges could impact its ability to deliver on its promises.
- Suppliers and creditors face the risk of non-payment if the company's financial situation does not improve.
Next Steps
- The company plans to launch its community-centric super app platform commercially.
- The company plans to license its AI Seek technology to academic institutions.
- The company plans to raise additional operating funds through equity and/or debt offerings.
- The company plans to appoint independent directors and establish an audit committee in 2024.
- The company plans to enhance and improve the design of its internal controls over financial reporting.
Key Dates
| Date | Description |
|---|---|
| 2016-02-18 | Bubblr Holdings Ltd. was formed in the UK. |
| 2019-10-22 | U.S. Wireless Online, Inc. (UWRL) was formed in Wyoming. |
| 2019-11-01 | The company purchased a vehicle under a capital finance arrangement. |
| 2020-03-26 | Bubblr Holdings Ltd. merged into U.S. Wireless Online, Inc. (UWRL). |
| 2021-03-30 | The company's corporate name changed to Bubblr, Inc. |
| 2021-04-01 | The company's internet search mechanism patent was granted in the US. |
| 2022-03-04 | The company entered into a Securities Purchase Agreement with GHS Investments, LLC. |
| 2022-03-09 | The company entered a Securities Purchase Agreement with Proactive Capital Partners LP. |
| 2022-05-23 | The company amended a loan agreement with Stephen Morris. |
| 2022-09-06 | The company entered into a second amendment with Bubblr Limited and Mr. Morris. |
| 2022-09-07 | Bubblr Limited entered into a new loan agreement with Mr. Morris. |
| 2022-09-08 | The company entered into a new loan agreement with Professor Paul Morrissey. |
| 2022-12-20 | The company entered into a third amendment with Bubblr Limited and Mr. Morris. |
| 2023-01-31 | The company entered into Separation Agreements with Steven Saunders and Rik Willard. |
| 2023-02-14 | The company entered a Consulting Agreement with Beyond Media SEZC. |
| 2023-03-04 | The company filed a Certificate of Designation with the Wyoming Secretary of State, establishing Series C Convertible Preferred Stock. |
| 2023-04-01 | The company entered into Amended Employment Agreements with Stephen Morris, David Chetwood, and Timothy Burks. |
| 2023-04-06 | The company entered into a Non-executive Director Agreement with Paul Morrissey. |
| 2023-05-12 | The company agreed to grant Mr. Chetwood an option to purchase shares of common stock. |
| 2023-06-15 | The company entered a Consulting Agreement with Launchpad LLC. |
| 2023-07-01 | The company agreed to grant Mr. Burks an option to purchase shares of common stock. |
| 2023-07-06 | The company agreed to grant Mr. Morrissey an option to purchase shares of common stock. |
| 2023-12-27 | Stephen Morris converted $821,431.87 in principal amount of promissory notes into common stock. |
| 2023-12-31 | The company entered into Second Amended Employment Agreements with Stephen Morris and David Chetwood, and an Amended Employment Agreement with Timothy Burks and an Amended Non-Executive Director Agreement with Morrissey. |
| 2024-03-31 | End of the reporting period for the quarterly report. |
| 2024-05-07 | Date of the quarterly report filing. |
Keywords
Ethical Web, AI Seek, Generative AI, Intellectual Property, SaaS, Open-Source, Super App, Patent, Financial Results, Working Capital, Internal Controls
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