10-K: Bubblr Reports Steep Revenue Decline, Going Concern Doubts Persist

Bubblr, Inc. (EthicalWeb AI) reported a 37% revenue decrease and an expanded working capital deficit for fiscal year 2025, raising substantial doubt about its ability to continue as a going concern.

Summary

• Bubblr, Inc., operating as EthicalWeb AI, is an artificial intelligence company focused on patented search and data security solutions for generative AI.
• The company reported a significant revenue decline of 37% to $3,369 in 2025 from $5,349 in 2024.
• Net loss for 2025 was $(1,270,416), a slight improvement from $(1,313,026) in 2024.
• The working capital deficit worsened by 45% to $(2,899,722) in 2025 from $(2,000,369) in 2024.
• Cash on hand decreased substantially to $7,322 at the end of 2025 from $41,184 in 2024.
• The company's auditor issued a going-concern opinion, highlighting dependence on future financing or profitable operations.
• Research and development expenses increased by 248% to $192,381 in 2025, as products were generally released to customers, discontinuing capitalization of development costs.
• Sales and marketing expenses surged by 315% to $101,643 in 2025, driven by higher consultancy costs.
• Management concluded that internal control over financial reporting was ineffective as of December 31, 2025, due to inadequate segregation of duties and limited resources.
• The company is involved in a civil lawsuit where a preferred stock holder, GHS Investments, LLC, is seeking the appointment of a custodian or receiver.
• Bubblr's securities were downgraded from the OTCQB market to the OTCID market on February 13, 2026, due to not meeting minimum bid price requirements.
• The company issued convertible loan notes totaling $445,219 in 2025, with interest rates of 18% and 12%, and conversion features at discounted prices.
• Stephen Morris, the founder, was appointed Chief Executive Officer on June 11, 2025, following a series of CEO changes.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing with a highly negative sentiment due to severe liquidity issues, a significant revenue decline, an auditor's going-concern opinion, and ineffective internal controls, all pointing to substantial operational and financial distress.

Positives

• Net loss slightly improved in 2025 to $(1,270,416) from $(1,313,026) in 2024.
• Research and development spending increased significantly by 248% to $192,381, indicating continued investment in product development and general release of products.
• The company continues to expand its intellectual property portfolio with new patent applications for AI Seek AI LLM and Sensitive Data Protection for Generative AI.
• AI Vault, an innovative solution for secure generative AI use, is available on AWS Marketplace, targeting organizations with data security concerns.
• AI Seek, a customizable search application, is available on the Apple App Store, with a primary commercial strategy focused on partnership models.

Negatives

• Revenue decreased by 37% to $3,369 in 2025 from $5,349 in 2024, indicating a struggle to generate significant sales.
• The company reported an accumulated deficit of $18,131,202 as of December 31, 2025, and has consistently operated at a loss.
• Current liabilities exceeded current assets by $2,899,722 as of December 31, 2025, reflecting a deteriorating working capital position.
• Cash on hand significantly declined to $7,322 at year-end 2025 from $41,184 at year-end 2024.
• The independent auditor issued a going-concern opinion, highlighting substantial doubt about the company's ability to continue operations without additional financing.
• Management concluded that internal control over financial reporting was ineffective due to inadequate segregation of duties and limited resources.
• The company is facing a civil lawsuit from a preferred stock holder seeking the appointment of a custodian or receiver.
• Securities were downgraded from OTCQB to OTCID due to failure to meet minimum bid price requirements, indicating reduced market visibility and liquidity.
• The company has significant related-party loans from its founder, Stephen Morris, totaling $1,253,210 as of December 31, 2025.
• The company has not paid dividends on Series C Convertible Preferred Stock due to insolvency, and accrued dividends for prior years were reversed.

Risks

• The auditor has issued a going-concern opinion, indicating increased investment risk due to continued losses and dependence on future financing.
• A limited operating history makes it difficult to accurately evaluate operations and increases the likelihood of failure for new companies.
• Operating results may fluctuate due to general economic conditions, budgetary constraints of customers, success of strategic growth initiatives, and litigation matters.
• Failure of the market for open-source platforms and AI products to grow, or lack of broad acceptance for products, could prevent revenue growth.
• Inability to gauge trends and respond to partners' changing preferences in a timely manner could impair sales and lead to business failure.
• Failure to manage growth successfully could strain management, operations, and financial systems, leading to disruptions and negative impacts.
• Commercial success depends on avoiding infringement of third parties' intellectual property rights, and litigation could consume resources or force product cessation.
• A decline in general economic conditions could lead to reduced consumer/business adoption, negatively impacting business operations and financial condition.
• Failure to maintain and enhance reputation and brand, or incurring excessive marketing expenses, could adversely affect business.
• Challenges in effectively managing the use of artificial intelligence could result in reputational and competitive harm, legal liability, and adverse operational results.
• Reliance on information technology means a significant disruption or cybersecurity breach could affect communications, operations, expose to liability, and cause customer loss.
• Inability to scale operations further with technology successfully could harm service quality, key personnel retention, and business.
• Developing and implementing new and updated applications, features, and services may be more difficult, take longer, and cost more than expected, without sufficient revenue increases.
• Inability to obtain, maintain, and enforce proprietary rights, or successfully defending against infringement claims, could materially adversely affect business.
• Network system or open-source platform failures or unavailability would harm product delivery, reputation, and ability to attract/retain customers.
• Significant competition from larger, better-resourced companies in the online search, integrated internet products, and social media markets.
• Changes in regulations or user concerns regarding privacy and protection of user data, or non-compliance, could adversely affect business.
• Legal liability arising from the provision of online services or content, including claims of content violation, errors, or malicious use.
• Dependence on continued, unimpeded access to the Internet for users, as providers may block, degrade, or charge for access to services.
• Dependence on the continued services of key executives (CEO, CFO, CRO) and ability to attract/retain qualified personnel.
• Future equity offerings will dilute existing shareholders' proportionate interest and could reduce investment value.
• The market price of common stock is likely to be highly volatile due to various factors beyond control.
• Subject to Penny Stock rules, which can reduce trading activity and make it harder for investors to liquidate securities.
• No expectation of paying dividends in the near future, limiting return on investment to stock price appreciation.
• As a development-stage company with a limited operating history, there is a significant risk of failing to achieve business goals or profitability.
• Reliance on emerging growth company and smaller reporting company exemptions may make shares less attractive to investors and complicate comparisons with other public companies.
• The requirements of being a public company may strain resources and divert management's attention, increasing compliance costs.
• Foreign currency exchange rates may adversely affect financial results due to sales and purchases in non-U.S. dollar currencies.
• Current economic and political conditions make tax rules subject to significant change, and ongoing tax audits could result in additional taxes.

Future Outlook

The company anticipates continued revenue growth driven by the launch of its enterprise products, AI Vault and AI Seek, leveraging emerging technological opportunities in generative AI. It plans to pursue viable commercial partnerships for its patented EthicalWeb.AI search platform. However, the company acknowledges that it will not achieve higher revenues without successful development, marketing, support, and delivery of its products and services, and there is no assurance of achieving significant revenue or profitability. The company expects to continue incurring significant losses in the near future and is dependent on securing additional financing to continue operations and expand its business.

Management Comments

• "We are now entering a period of revenue growth driven by the launch of its enterprise products, which aim to leverage emerging technological opportunities."
• "EW recognizes an apparent market demand for a solution that helps enterprises boost productivity while minimizing the risks of directly managing and overseeing the data used to generate output."
• "We are already making substantial progress in partnering with a global service provider to include our offering in a broader package. This will guarantee very low customer acquisition costs and create opportunities for rapid growth."
• "We are confident that our competitive advantages and protections are defensible through our granted patents and intellectual property."
• "Our management believes that this lawsuit is flawed and defensible in Court. We cannot predict the outcome of this lawsuit at present time, as we are in negotiations with the plaintiff about the dismissal of the case."
• "We will not achieve higher revenues unless we can develop, market, support, and deliver our products and service offerings. There can be no assurance that we will achieve significant revenue despite our efforts."
• "Unless we can attract additional investment, our ability to operate as a going concern is in doubt."
• "Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our internal control over financial reporting as of December 31, 2025... Based on this evaluation, our management concluded that as of December 31, 2025, our internal control over financial reporting was ineffective."

Industry Context

StockSavvy.ai notes that Bubblr operates in the highly competitive and rapidly evolving artificial intelligence and online search markets. While the generative AI market for enterprise security products is nascent, as the company states, it is also attracting significant investment and innovation from larger, more established technology firms. Bubblr's focus on patented data security for generative AI (AI Vault) and customizable search (AI Seek) positions it in a niche with high potential demand, given widespread corporate concerns about data privacy with tools like ChatGPT. However, its limited resources and minimal revenue generation stand in stark contrast to the substantial R&D budgets and market penetration capabilities of potential competitors. The company's strategy of pursuing partnership models is crucial for scaling in this environment, but execution remains a significant challenge given its current financial state and operational inefficiencies.

Comparison to Industry Standards

• Bubblr's revenue of $3,369 is extremely low compared to established players in the AI and search industry, such as Google (Alphabet), which generates billions in search and AI-related revenue, or even smaller, venture-backed AI startups that often secure multi-million dollar funding rounds before significant commercialization.
• The reported net loss of $(1.27) million is substantial relative to its minimal revenue, indicating a high burn rate without corresponding sales growth, a common challenge for early-stage tech companies but exacerbated by the lack of significant revenue traction.
• The working capital deficit of $(2.9) million and cash on hand of $7,322 are critically low, far below the liquidity levels typically maintained by even small public technology companies, which often hold cash reserves sufficient for at least 12-18 months of operations.
• The auditor's going-concern opinion is a severe red flag, indicating a financial instability level that is not typical for a healthy publicly traded company, even a smaller reporting company.
• The increase in R&D (248%) and Sales & Marketing (315%) expenses, while positive for product development and market entry, is not yet translating into revenue, suggesting a disconnect between investment and commercialization effectiveness compared to industry benchmarks where such investments typically precede or coincide with revenue ramp-up.
• The downgrade from OTCQB to OTCID due to bid price non-compliance reflects a market valuation and liquidity issue that is significantly below the standards for most publicly traded companies, even those on over-the-counter markets.

Management Changes

Corporate Governance

Legal Proceedings

• The company is currently engaged in a civil lawsuit in the United States District Court for the District of Wyoming (Case 1:26-CV-20-ABJ).
• The plaintiff, GHS Investments, LLC, a holder of the company's preferred stock, is seeking the Court's appointment of a custodian or receiver for Bubblr, Inc.
• Management believes the lawsuit is flawed and defensible, and is in negotiations with the plaintiff regarding its dismissal.

Related Party Transactions

• The company has two loans from its Founder, Stephen Morris, totaling $1,253,210 as of December 31, 2025.
• Loan 1 (January 16, 2016) from Stephen Morris had a balance of $668,405 as of December 31, 2025. It is unsecured, carries no interest, and is payable on demand or upon completion of an equity offering of no less than $5,000,000, or three years from the September 30, 2024 amendment date.
• Loan 2 (September 7, 2022) from Stephen Morris had a balance of $584,805 as of December 31, 2025. It is unsecured, carries no interest, is non-convertible, and is due three years after the September 30, 2024 amendment date.
• Stephen Morris's employment agreement was amended on December 31, 2023, reducing his base pay from $450,000 to $90,000 per annum and forfeiting $270,000 of deferred compensation, with payments withheld until the company secures $2 million in funding.
• David Chetwood's employment agreement was amended on December 31, 2023, reducing his base pay from $450,000 to $180,000 per annum and forfeiting $236,200 of deferred compensation. A further amendment on October 17, 2024, reduced his base pay to $90,000 per annum, with payments withheld until the company secures $2 million in funding.

Stakeholder Impact

• **Shareholders**: Face significant dilution risk from future equity offerings and conversions of preferred stock and convertible notes. The going-concern opinion and stock downgrade to OTCID indicate substantial risk to investment value. The ongoing lawsuit seeking a receiver could further destabilize the company and impact shareholder rights.
• **Employees**: Compensation for key executives (Stephen Morris, David Chetwood, Patrick Ensor) is partially withheld until the company secures $2 million in funding, creating financial uncertainty for management. The company has a small team (1 US, 4 UK full-time), and its ability to retain and attract talent is critical but challenged by financial instability.
• **Customers/Partners**: The company's focus on AI Vault and AI Seek for enterprise and consumer markets suggests potential benefits in data security and customizable search. However, the company's financial instability and ineffective internal controls could raise concerns about long-term service reliability and data integrity for potential partners and customers.
• **Creditors**: Holders of convertible loan notes and related-party loans face repayment risk given the company's minimal revenue, accumulated deficit, and going-concern doubts. The conversion features of the notes could lead to equity dilution rather than cash repayment.
• **Regulatory Authorities**: The company is subject to SEC scrutiny, as evidenced by the auditor change due to SEC suspension. Ineffective internal controls and ongoing legal proceedings could attract further regulatory attention.

Next Steps

• Secure additional operating funds through equity or debt offerings, bank loans, related-party loans, or revolving credit facilities.
• Continue negotiations with GHS Investments, LLC regarding the dismissal of the civil lawsuit seeking a custodian or receiver.
• Develop, market, support, and deliver products and service offerings to achieve significant revenue.
• Improve and expand operations, including financial and management information systems, and recruit, train, and manage sales personnel to manage growth effectively.
• Address and remediate identified material weaknesses in internal control over financial reporting, particularly regarding segregation of duties and accounting functions.
• Monitor and adapt to evolving domestic and international laws and regulations concerning data privacy and protection.
• Continue to invest in cybersecurity to strengthen defenses and resilience against new threats.
• Evaluate the effect of adopting new accounting pronouncements, including ASU No. 2024-03, ASU No. 2025-01, ASU No. 2025-06, and ASU No. 2025-05.

Key Dates

Recommendation

The filing presents a dire financial picture for Bubblr, Inc. The 37% revenue decline, escalating working capital deficit, critically low cash reserves, and the auditor's explicit 'going concern' opinion indicate severe financial distress. The company's internal controls are deemed ineffective, and it faces a lawsuit seeking a receiver, further eroding confidence. The recent downgrade of its securities to the OTCID market underscores its precarious position. While there's investment in R&D and new products, the lack of revenue generation and significant operational challenges make the company a high-risk investment with a strong likelihood of further value erosion. A seasoned investor would view these factors as overwhelmingly negative, suggesting an immediate exit.

Keywords

AI, Artificial Intelligence, Generative AI, SEC Filing, 10-K, Financial Report, Bubblr, EthicalWeb AI, AI Vault, AI Seek, Intellectual Property, Patents, Going Concern, Financial Performance, Risk Factors, Corporate Governance, Stock Options, Convertible Notes, OTC Markets, Penny Stock, Data Privacy, Cybersecurity