10-Q: Bubblr Inc. Reports Q3 2024 Results, Revenue Growth Offset by Increased Losses

Bubblr Inc. saw a revenue increase in Q3 2024 compared to Q3 2023, but also experienced a significant net loss and ongoing concerns about its ability to continue as a going concern.

Summary

• Bubblr Inc. reported a net loss of $496,838 for the three months ended September 30, 2024, compared to a net loss of $1,170,933 for the same period in 2023.
• The company's revenue increased to $1,415 in Q3 2024 from $1,151 in Q3 2023.
• For the nine months ended September 30, 2024, the net loss was $1,632,206, compared to $3,128,756 for the same period in 2023.
• The company's accumulated deficit stood at $17,310,000 as of September 30, 2024.
• Current liabilities exceeded current assets by $2,009,279 as of September 30, 2024.
• Management has expressed substantial doubt about the company's ability to continue as a going concern without additional financing.
• The company is developing an Ethical Web platform and AI Seek app, with the Ethical Web platform being the technical manifestation of their granted patent.
• The company has intellectual property protection with patents granted in multiple countries and pending in others.

Sentiment

Score: 3

Explanation: The document highlights significant financial losses, a substantial working capital deficit, and management's doubt about the company's ability to continue as a going concern. While there is some revenue growth, the overall financial health and operational risks are concerning, leading to a low sentiment score.

Positives

• The company experienced a 22.9% increase in revenue in Q3 2024 compared to Q3 2023.
• The net loss decreased by 57.6% in Q3 2024 compared to Q3 2023.
• The company has secured patents for its technology in multiple countries.
• The company is actively developing new products, including the Ethical Web platform and AI Seek app.

Negatives

• The company has a significant accumulated deficit of $17,310,000.
• Current liabilities exceed current assets by $2,009,279.
• The company's management has expressed substantial doubt about its ability to continue as a going concern.
• The company has material weaknesses in its internal control over financial reporting.
• The company has limited written documentation of its internal control policies and procedures.
• There is insufficient segregation of duties within accounting functions.
• The company has insufficient personnel with expertise in finance and accounting.
• The company does not have a functioning audit committee, compensation committee, or an outside independent director on its board of directors.

Risks

• The company's ability to continue as a going concern is in doubt due to its significant losses and working capital deficit.
• The company may not be able to secure additional financing on acceptable terms.
• The company faces intense competition from larger companies with more resources.
• The company has material weaknesses in its internal control over financial reporting, which could lead to misstatements in its financial statements.
• The company is subject to various laws and regulations that could impact its business.
• The company relies on key personnel, and the loss of these individuals could negatively impact operations.
• The company's products may not be accepted by the target market.
• The company may struggle to attract and retain qualified employees.

Future Outlook

The company intends to raise additional operating funds through equity or debt offerings, but there is no assurance that it will be successful. The company is also exploring options such as the sale or licensing of its patents and IP to secure funding.

Management Comments

• Management intends to raise additional operating funds through equity or debt offerings.
• Management has expressed substantial doubt about the company's ability to continue as a going concern.
• Management is committed to improving its internal controls when adequate resources are available.

Industry Context

The company operates in the competitive AI and software industry, facing challenges from larger companies with more resources. The company is attempting to differentiate itself through its focus on ethical engagement, consumer privacy, and its unique patent-protected technology.

Comparison to Industry Standards

• The company's revenue is significantly lower than established players in the AI and software industry, such as Google, Microsoft, and Amazon, which have billions in revenue.
• The company's net losses are substantial compared to profitable companies in the sector, indicating a need for significant improvements in revenue generation and cost management.
• The company's reliance on related-party loans is not typical for established companies in the industry, which often have access to traditional financing options.
• The company's lack of a functioning audit committee and independent directors is a significant deviation from corporate governance best practices in the industry.
• The company's material weaknesses in internal controls are a concern, as most public companies in the sector have robust internal control systems.

Management Changes

Corporate Governance

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 significant loans payable to related parties, including Stephen Morris and Paul Morrissey.
• The company has entered into various agreements with related parties, including employment agreements and consulting agreements.

Stakeholder Impact

• Shareholders face significant risk due to the company's financial instability and going concern issues.
• Employees may be concerned about job security due to the company's financial challenges.
• Customers may be hesitant to engage with the company due to its uncertain future.
• Suppliers and creditors face increased risk of non-payment due to the company's liquidity issues.

Next Steps

• The company plans to raise additional operating funds through equity or debt offerings.
• The company plans to appoint independent directors and establish an audit committee and compensation committee.
• The company plans to adopt sufficient written policies and procedures for accounting and financial reporting.

Key Dates

Keywords

Ethical Web, AI Seek, Artificial Intelligence, Patents, Software, Financial Results, Going Concern, Internal Controls, Technology, Search Mechanism