What changed in this filing

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Item 1. Financial Statements

2024-08-15 compared with 2024-05-15 · 198 added, 107 removed, 254 unchanged (55% of the section changed)

1 unchanged sentence

Blackboxstocks Inc.

Condensed Balance Sheets

As of March 31, 2024 and December 31, 2023

Condensed Consolidated Balance Sheets

As of June 30, 2024 and December 31, 2023

Current assets:

Accounts receivable, net of allowance for doubtful accounts of $ 68,589 at March 31, 2024 and December 31, 2023, respectively

Accounts receivable, net of allowance for doubtful accounts of $ 68,589 at June 30, 2024 and December 31, 2023, respectively

Marketable securities

3 unchanged sentences

Property and equipment:

Software, office, computer and related equipment, net

Property and equipment, net

Right of use lease

3 unchanged sentences

Accounts payable

Accrued liabilities

Accrued interest

Unearned subscriptions

1 unchanged sentence

Note payable, current portion

Merchant cash advance

Other liabilities

Total current liabilities

5 unchanged sentences

Preferred stock, $ 0.001 par value, 5,000,000 shares authorized;

no shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

no shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Series A Convertible Preferred Stock, $ 0.001 par value, 5,000,000 shares authorized;

3,269,998 issued and outstanding at March 31, 2024 and December 31, 2023, respectively

3,269,998 issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Series B Convertible Preferred Stock, $ 0.001 par value, 10,000,000 shares authorized;

no shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

no shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Common stock, $ 0.001 par value, 100,000,000 shares authorized:

3,226,145 and 3,223,015 issued and outstanding at March 31, 2024 and December 31, 2023, respectively

3,215,528 and 3,223,015 issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Treasury stock

3 unchanged sentences

Total liabilities and stockholders' equity

The accompanying notes are an integral part of these condensed financial statements.

The accompanying notes are an integral part of these condensed consolidated financial statements.

Blackboxstocks Inc.

Condensed Statements of Operations

For the Three Months Ended March 31, 2024 and 2023

Condensed Consolidated Statements of Operations

For the Three Months and Six Months Ended June 30, 2024 and 2023

For the three months ended

For the six months ended

Subscriptions

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Advertising and marketing

Loss on disposition of fixed assets

Depreciation and amortization

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Interest expense

Investment income

Total other income

Financing costs

Investment (income) loss

Total other (income) expense

Loss before income taxes

Weighted average number of common shares outstanding - basic and diluted

Net loss per share - basic and diluted

The accompanying notes are an integral part of these condensed financial statements.

Weighted average number of common shares outstanding - basic

Net loss per share - basic

The accompanying notes are an integral part of these condensed consolidated financial statements.

Blackboxstocks Inc.

Condensed Statement of Stockholders ’ Equity

For the Three Months Ended March 31, 2024 and 2023

Condensed Consolidated Statement of Stockholders ’ Equity

For the Six months Ended June 30, 2024 and 2023

Preferred Stock

5 unchanged sentences

Vesting of warrants for compensation

Issuance of options for compensation

Issuance of stock for compensation

Vesting of options for compensation

Vesting of stock for compensation

Balances, March 31, 2023

Issuance of stock for fractional shares resulting from reverse split

Purchase of treasury stock

Vesting of warrants for compensation

Vesting of options for compensation

Issuance of stock for compensation

Issuance of stock for investment

Balances, June 30, 2023

Balances, December 31, 2023

Vesting of warrants for compensation

Issuance of options for compensation

Vesting of options for compensation

Issuance of stock for compensation

Balances, March 31, 2024

The accompanying notes are an integral part of these condensed financial statements.

Vesting of warrants for compensation

Vesting of options for compensation

Vesting of stock for compensation

Retirement of treasury stock

Balances, June 30, 2024

The accompanying notes are an integral part of these condensed consolidated financial statements.

Blackboxstocks Inc.

Condensed Statements of Cash Flows

For the Three Months Ended March 31, 2024 and 2023

For the three months ended

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2024 and 2023

For the six months ended

Cash flows from operating activities:

1 unchanged sentence

Depreciation and amortization expense

Financing costs

Stock based compensation

Loss on disposition of assets

Right of use lease

Investment income

Investment (income) loss

Changes in operating assets and liabilities:

2 unchanged sentences

Prepaid expenses and other current assets

Accounts payable and accrued liabilities

Accounts payable

Other liabilities

Unearned subscriptions

1 unchanged sentence

Cash flows from investing activities:

Purchase of property and equipment

Purchase of marketable securities

2 unchanged sentences

Cash flows from financing activities:

Purchase of treasury stock

Proceeds from other liabilities

Proceeds from merchant cash advance

Principal payments on notes payable

Net cash used in financing activities

Net decrease in cash

Payments on merchant cash advance

Purchase of treasury stock

Net cash provided by (used in) financing activities

Net increase (decrease) in cash

Cash - beginning of period

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Non-cash investing and financing activities:

Treasury stock purchased with other assets

Treasury stock purchased from related party with other assets

Retirement of treasury stock

The accompanying notes are an integral part of these condensed financial statements.

Issuance of stock for investment

The accompanying notes are an integral part of these condensed consolidated financial statements.

Blackboxstocks Inc.

Notes to Condensed Financial Statements

Notes to Condensed Consolidated Financial Statements

Blackboxstocks Inc.

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The platform was initially made available to subscribers in September 2016.

Subscriptions for the use of the platform are sold on a monthly and/or annual subscription basis to individual consumers through the Company website at http://www.blackboxstocks.com.

Subscriptions for the use of the platform are sold on a monthly and/or annual subscription basis to individual consumers through the Company website at http://blackboxstocks.com .

On April 1, 2024, the Company formed Blackbox.io Inc., a Delaware corporation, and on April 18, 2024, the Company and Blackbox.io Inc entered into a contribution agreement (the “Contribution Agreement”) pursuant to which the Company transferred certain specified business assets (the “Contributed Assets”) to Blackbox.io Inc.

In consideration for the Contributed Assets, Blackbox.io Inc issued to the Company 3,226,145 shares of common stock, par value $ 0.001 per share and 3,369,998 shares of Series A convertible preferred stock, $ 0.001 par value per share, of Blackbox.io Inc, free and clear of all liens (the “Blackbox.io Operating Equity”), and assumed certain specified liabilities of the business of the Company (the “Assumed Liabilities”).

Simultaneously with the execution of the Contribution Agreement, the Company delivered fully executed documents of conveyance to effect the contribution of the Contributed Assets and the assignment of the Assumed Liabilities to Blackbox.io Inc, including (i) a bill of sale, (ii) an assignment and assumption agreement and (iii) an intellectual property assignment and Blackbox.io Inc delivered certificates and notices of issuance of stock transferable on the books of Blackbox.io Inc evidencing the issuance of the Blackbox.io Operating Equity.

As a result of the Contribution Agreement, Blackbox.io Inc.

is a wholly-owned corporate subsidiary of the Company that now holds the Company’s legacy assets and continues its legacy business operations.

The Company is listed on the Nasdaq Capital Market (“Nasdaq”) under the symbol “BLBX”.

Summary of Significant Accounting Policies

Basis of Presentation The accompanying interim unaudited condensed financial statements and footnotes of Blackboxstocks Inc.

Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements and footnotes of Blackboxstocks Inc.

have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions to Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (the “SEC”).

Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

In the opinion of management, these unaudited financial statements contain all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results of the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 31, 2024.

These condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

The accompanying condensed financial statements have been prepared in assumption of the continuation of the Company as a going concern, which is dependent upon the Company's ability to obtain sufficient financing or establish itself as a profitable business.

In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results of the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 31, 2024.

These condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

The accompanying condensed consolidated financial statements have been prepared in assumption of the continuation of the Company as a going concern, which is dependent upon the Company's ability to obtain sufficient financing or establish itself as a profitable business.

For the year ended December 31, 2023, the Company incurred an operating loss of $ 5,297,671 and a net loss of $ 4,664,455 .

In addition, for the three months ended March 31, 2024, the Company incurred an operating loss of $ 863,966 and a net loss of $ 863,711 .

Cash flows used in operations totaled $ 3,166,067 for the year ended December 31, 2023 and $ 353,803 for the three months ended March 31, 2024.

The Company had cash and cash equivalents of $ 114,968 as of March 31, 2024.

In addition, for the six months ended June 30, 2024, the Company incurred an operating loss of $ 1,718,823 and a net loss of $ 1,741,654 .

Cash flows used in operations totaled $ 3,166,067 for the year ended December 31, 2023 and $ 687,198 for the six months ended June 30, 2024.

The Company had cash of $ 1,055,482 as of June 30, 2024.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

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The financial statements do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation.

Principles of Consolidation.

The condensed consolidated financial statements include the accounts of Blackboxstocks Inc and its wholly owned subsidiary Blackbox.io Inc., a Delaware corporation.

All intercompany transactions and account balances between the Company and its subsidiary have been eliminated in consolidation.

Transactions with its consolidated subsidiary are generally settled in cash.

Use of Estimates.

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Recently Issued Accounting Pronouncements.

During the three months ended March 31, 2024, there were no new accounting pronouncements issued that management believes the adoption of which will have a material impact on the Company’s financial statements.

Recently Issued Accounting Pronouncements.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-09 (“ASU 2023-09”), Income Taxes, which enhances the transparency of income tax disclosures by expanding annual disclosure requirements related to the rate reconciliation and income taxes paid.

The amendments are effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The amendments should be applied on a prospective basis.

Retrospective application is permitted.

The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures.

In November 2023, the FASB issued Accounting Standards Update 2023-07 (“ASU 2023-07”), Segment Reporting, which improves reportable segment disclosure requirements.

ASU 2023-07 primarily enhances disclosures about significant segment expenses by requiring that a public entity disclosure significant segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of segment profit or loss.

This ASU also (i) requires that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment, and a description of its composition;

(ii) requires that all annual disclosures are provided in the interim periods;

(iii) clarifies that if the CODM uses more than one measure of profitability in assessing segment performance and deciding how to allocate resources, that one or more of those measures may be reported;

(iv) requires disclosure of the title and position of the CODM and a description of how the reported measures are used by the CODM in assessing segment performance and in deciding how to allocate resources;

(v) requires that an entity with a single segment provide all new required disclosures.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 and requires retrospective application.

Early adoption is permitted.

The amendments under ASU 2023-07 relate to financial disclosures and its adoption will not have an impact on the Company’s results of operations, financial position or cash flows.

The Company will adopt ASU 2023-07 for the annual reporting period ending December 31, 2024 and for interim reporting periods thereafter.

Adoption is not expected to have any impact on the Company’s disclosures.

Earnings or (Loss) Per Share.

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Therefore, because including shares issuable upon conversion of convertible securities and/or exercise of outstanding options and warrants would have an anti-dilutive effect on the loss per share, only the basic earnings (loss) per share is reported in the accompanying financial statements for periods of loss.

The Company had total potential additional dilutive securities outstanding at March 31, 2024, as follows.

The Company had total potential additional dilutive securities outstanding at June 30, 2024, as follows.

Series A Convertible Preferred Shares

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Commission revenues are recognized as they are earned and revenues from the sale of promotional products are recognized upon shipment.

Evtec Group Limited (“Evtec”) operates through a single subsidiary, Evtec Automotive Limited, as a supplier of critical automotive parts to the automobile manufacturing industry.

Evtec is based in the UK and provides complete assemblies to auto manufacturers, simplifying sourcing, saving time on procurement, and increasing production efficiency.

Evtec Group Limited (“Evtec Group”) operates through a single subsidiary, Evtec Automotive Limited, as a supplier of critical automotive parts to the automobile manufacturing industry.

Evtec Group is based in the UK and provides complete assemblies to auto manufacturers, simplifying sourcing, saving time on procurement, and increasing production efficiency.

Their pick and pack service supplies aftermarket automotive products, as well as offering kitting and fulfilment for non-automotive businesses.

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Upon conversion of the Series B Stock, the 2,400,000 shares would represent approximately 43 % of the total common shares outstanding.

The Evtec Group preferred shares are convertible into common shares of Evtec Group on a one-for-one basis upon a change in control or the listing of Evtec Group on Nasdaq or the London Stock Exchange.

The Evtec Group preferred shares were convertible into common shares of Evtec Group on a one-for-one basis upon a change in control or the listing of Evtec Group on Nasdaq or the London Stock Exchange.

The preferred shares of Evtec Group were converted into common shares representing approximately 13 % of Evtec Group.

The Company’s initial investment in Evtec was measured at $ 8,424,000 in accordance with ASC 820-10-30.

The Company’s initial investment in Evtec Group was measured at $ 8,424,000 in accordance with ASC 820-10-30.

The value of the Series B Stock issued by the Company was set by the closing price of its common stock on the day prior to closing of $ 3.51 as reported by Nasdaq.

As a result, the 2,400,000 Series B Stock shares were valued at $ 8,424,000 .

The investment was reviewed for impairment as of March 31, 2024.

On November 24, 2023, the Company entered into a Binding Amendment to Amended Letter of Intent (the “LOI Amendment”) with Evtec Group, Evtec Automotive Limited, and Evtec Aluminium (the “Evtec Companies), which amended a non-binding Amended Letter of Intent (the “LOI”) dated April 14, 2023.

As a result, the 2,400,000 Series B Stock shares were valued at $ 8,424,000 which was determined to be the cost of the investment recorded pursuant to ASC 321-10-35.

The investment was reviewed for impairment as of June 30, 2024.

On November 24, 2023, the Company entered into a Binding Amendment to Amended Letter of Intent (the “LOI Amendment”) with Evtec Group, Evtec Automotive Limited, and Evtec Aluminium (collectively the “Evtec Companies), which amended a non-binding Amended Letter of Intent (the “LOI”) dated April 14, 2023.

Pursuant to the LOI Amendment, the Company has agreed to continue to negotiate in good faith to consummate a proposed acquisition of the Evtec Companies contemplated by the LOI (the “ Proposed Transaction ”), subject to the terms of the LOI Amendment.

As a condition to the Company’s continued good faith negotiations regarding the Proposed Transaction, the Evtec Companies agreed to (i) pay the Company aggregate extension fees totaling $ 400,000 which were guaranteed by a credit worthy affiliate of the Evtec Companies, (ii) provide extension loans of up to $ 400,000 to the Company if the Proposed Transaction has not closed on or before April 1, 2024, (iii) pay the Company amounts in cash equal to any documented legal fees and third-party expenses incurred or payable by the Company in connection with the Proposed Transaction up to $ 175,000 , including any such expenses incurred prior to the date of the LOI Amendment, (iv) forfeit and return 2,400,000 shares of the Series B Stock acquired by Evtec Group under the terms of that certain Securities Exchange Agreement, and (v) permit the Company to convert each of the 4,086 preferred shares of Evtec Group issued to the Company pursuant to the Securities Exchange Agreement into one ordinary share of Evtec Group.

$ 475,000 and $ 0 was outstanding and classified as other receivables on the balance sheet as of December 31, 2023 and March 31, 2024, respectively.

As provided for in the LOI Amendment, Evtec Group entered into a Forfeiture Agreement with the Company dated November 28, 2023 in which Evtec Group agreed to forfeit all of its right, title and interest in and to the 2,400,000 shares of Series B Stock acquired by Evtec Group pursuant to the Securities Exchange Agreement in order to further induce the Company to continue to negotiate in good faith to consummate the Proposed Transaction.

As a condition to the Company’s continued good faith negotiations regarding the Proposed Transaction, the Evtec Companies agreed to (i) pay the Company aggregate extension fees totaling $ 400,000 which were guaranteed by a credit worthy affiliate of the Evtec Companies, (ii) provide extension loans of up to $ 400,000 to the Company if the Proposed Transaction has not closed on or before April 1, 2024, (iii) pay the Company amounts in cash equal to any documented legal fees and third-party expenses incurred or payable by the Company in connection with the Proposed Transaction up to $ 175,000 , including any such expenses incurred prior to the date of the LOI Amendment, (iv) forfeit and return the 2,400,000 shares of the Series B Stock acquired by Evtec Group under the terms of the Securities Exchange Agreement, and (v) permit the Company to convert each of the 4,086 preferred shares of Evtec Group issued to the Company pursuant to the Securities Exchange Agreement into one ordinary share of Evtec Group.

$ 475,000 and $ 0 was outstanding and classified as other receivables on the balance sheet as of December 31, 2023 and June 30, 2024, respectively.

As a result of the transaction not closing by April 1, 2024, Evtec Aluminium has provided $400,000 of financial support to the Company that has been classified as other liabilities as of June 30, 2024.

As provided for in the LOI Amendment, Evtec Group entered into a Forfeiture Agreement with the Company dated November 28, 2023 pursuant to which Evtec Group forfeited all of its right, title and interest in and to the 2,400,000 shares of Series B Stock acquired by Evtec Group pursuant to the Securities Exchange Agreement in order to further induce the Company to continue to negotiate in good faith to consummate the Proposed Transaction.

Pursuant to the Forfeiture Agreement, the Company has no obligation to make any payment to Evtec Group, in cash or otherwise, for any such Series B Stock that are so forfeited.

The Series B Stock forfeited by Evtec Group were cancelled as of the date as of the date of the Forfeiture Agreement.

In addition, Evtec Group agreed to convert the preferred shares into 4,086 common shares.

The shares of Series B Stock forfeited by Evtec Group were cancelled as of the date of the Forfeiture Agreement.

In addition, Evtec Group converted the Evtec Group preferred shares held by the Company into 4,086 common shares.

On December 12, 2023, the Company entered into a Share Exchange Agreement (the Share Exchange Agreement") with Evtec Aluminium, and the shareholders of Evtec Aluminium (“Sellers”).

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Immediately following Closing, based upon the Exchange Ratio, the Sellers are expected to collectively own 73.2 % of the aggregate common stock of the Company.

Discussions for the Company to acquire Evtec Group are ongoing.

On May 13, 2024 the Company filed a Registration Statement on Form 4 including an information statement/prospectus and a notice of action taken by written consent pursuant to section 14(C) of the Securities Exchange Act of 1934 as required under the terms of the Securities Exchange Agreement with Evtec Aluminium.

The registration statement is subject to review and approval by the Securities and Exchange Commission and has not yet been declared effective.

Stockholders ’ Equity

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Prior to the stockholder approval, the Series B Stock is not convertible into more than 19.9 % of the Company’s outstanding common stock.

The Series B Stock was forfeited in December 2023.

All previously outstanding shares of Series B Stock were forfeited in December 2023.

Warrants to Purchase Common Stock

The following table presents the Company’s warrants as of March 31, 2024:

The following table presents the Company’s warrants as of June 30, 2024:

Exercise Price

1 unchanged sentence

Warrants as of December 31, 2023

Warrants as of March 31, 2024

At March 31, 2024, warrants for the purchase of 106,111 shares were vested and warrants for the purchase of 3,473 shares remained unvested.

Warrants as of June 30, 2024

At June 30, 2024, warrants for the purchase of 91,849 shares were vested and warrants for the purchase of 1,389 shares remained unvested.

The Company expects to incur expenses for the unvested warrants totaling $ 21,256 as they vest.

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The 2021 Plan allows the Company, under the direction of the Board of Directors or a committee thereof, to make grants of stock options, restricted and unrestricted stock and other stock-based awards to employees, including our executive officers, consultants and directors.

The following table presents the Company’s options as of March 31, 2024:

The following table presents the Company’s options as of June 30, 2024:

Options as of December 31, 2023

Options as of March 31, 2024

At March 31, 2024, options to purchase 176,335 shares were vested and options to purchase 24,540 shares remained unvested.

Options as of June 30, 2024

At June 30, 2024, options to purchase 190,174 shares were vested and options to purchase 10,701 shares remained unvested.

The Company expects to incur expenses for the unvested options totaling $ 68,257 as they vest.

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During December 2021, the terms of the note were amended to carry an interest rate of 1 % and mature on May 4, 2025.

As of March 31, 2024, the unpaid balance of the note totaled $ 32,385 .

As of June 30, 2024, the unpaid balance of the note totaled $ 25,139 .

Merchant Cash Advance

On May 28, 2024, the Company entered into a merchant cash advance agreement with proceeds totaling $ 198,500 and total future receivables purchased totaling $ 272,000 .

The merchant cash advance is to be repaid through 28 weekly payments equal of $ 9,714 .

The finance expense for the advance has been calculated using the effective interest rate method.

As of June 30, 2024, the unpaid balance of the merchant cash advance totaled $ 182,655 .

Commitments and Contingencies

The Company leases approximately 2,685 square feet of office space in Dallas Texas pursuant to an office lease with Teachers Insurance and Annuity Association of America that expires on September 30, 2028.

During the period ended March 31, 2024, the Company’s related rent expenses totaled approximately $ 23,000 .

During the period ended June 30, 2024, the Company’s related rent expenses totaled approximately $ 46,000 .

The table below shows the future lease payment obligations:

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Weighted-average discount rate

The Company is defendant to a lawsuit filed by Feenix Payment Systems, LLC before the New York State Supreme Court, County of New York on June 20, 2023.

The Company is named as a defendant in a lawsuit filed by Feenix Payment Systems, LLC before the New York State Supreme Court, County of New York on June 20, 2023.

The plaintiff seeks damages in the amount of $ 500,000 from an alleged breach of an exclusivity agreement between the plaintiff and the Company.

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Subsequent Events

As required by the Share Exchange Agreement, on April 1, 2024, the Company formed Blackbox.io Inc., a Delaware Corporation, and on April 18, 2024, the Company and Blackbox.io Inc entered into a contribution agreement (the “Contribution Agreement”) pursuant to which the Company transferred certain specified business assets (the “Contributed Assets”) to Blackbox.io Inc.

In consideration for the Contributed Assets, Blackbox.io Inc issued to the Company 3,226,145 shares of common stock, par value $ 0.001 per share, of Blackbox .io Inc.

and 3,369,998 shares of Series A convertible preferred stock, $ 0.001 par value per share, of Blackbox.io Inc, free and clear of all liens (the “Blackbox.io Operating Equity”), and assumed certain specified liabilities of the business of the Company (the “Assumed Liabilities”).

The Contribution Agreement contains customary representations, warranties and covenants.

As a result of the Contribution Agreement, Blackbox.io Inc.

is a wholly-owned corporate subsidiary of the Company that now holds the Company’s legacy assets and continues its legacy business operations.

The registration statement is subject to review and approval by the Securities and Exchange Commission and has not yet been declared effective.

On July 1, 2024, the Company entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) pursuant to which the Company sold 312,500 shares of its common stock, par value $ 0.001 (“Common Stock”), at a price per share of $ 4.00 for gross proceeds of $ 1,250,000 .

Gust Kepler, a director, our President and Chief Executive Officer, purchased $ 100,000 of the Common Stock under the terms of the Stock Purchase Agreement.

Quadrofoglio Holdings LLC, a Florida limited liability company, purchased the remaining $ 1,150,000 of Common Stock.

The Stock Purchase Agreement contains standard representations and warranties from the Company and the purchasers.

The Company had received $ 1,100,000 of these proceeds prior as of June 30, 2024 and prior to the execution of any definitive agreements with the purchasers.

As a result the $ 1,100,000 was classified as other liabilities on the accompany consolidated condensed balance sheet.

On July 1, 2024, the Company entered into a Convertible Loan Agreement with Evtec Aluminium pursuant to which the Company loaned Evtec Aluminum $ 1,150,000 (the “Evtec Loan”).

The Evtec Loan is unsecured, bears interest at 12 % per annum and has a maturity date of one year from the date of issuance.

The Evtec Loan is convertible into Evtec Aluminum ordinary shares at the rate of $ 1,197.92 per share at any time at the option of Blackboxstocks and converts automatically upon the closing of the Share Exchange Agreement (as defined below).

If converted, the Evtec Loan converts into approximately 3.2 % of the outstanding ordinary shares of Evtec Aluminum inferring a post money valuation of approximately $ 48,136,000 .

On July 3, 2024, the Company and Evtec entered into a First Amendment to Share Exchange Agreement (the “Amendment”) in order to reflect the effects of the Stock Purchase Agreement transaction and the proposed issuance of Evtec warrants in connection with its pre-closing financing efforts.

Specifically, the Amendment provides:

That the Company will issue replacement warrants to holders of any outstanding warrants to acquire Evtec Aluminium ordinary shares which will permit holders to acquire shares of the Company’s Common Stock on substantially the same terms after adjusting the number of shares issuable and exercise price based upon the Exchange value of Evtec Aluminium ordinary shares and the Exchange Ratio.

Evtec Aluminium’s issuance of warrants is subject to approval by the Company in its reasonable discretion.

The definition of “Exchange Ratio” was changed to mean initially 294.17 shares of the Company’s Common Stock for each Evtec Aluminum share, which is subject to further adjustment, so that the consideration shares issuable to Evtec Sellers would equal 70.6 % of the total outstanding shares of the Company post-Closing

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations

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The accompanying financial statements have been prepared in assumption of the continuation of the Company as a going concern, which is dependent upon the Company's ability to obtain sufficient financing or establish itself as a profitable business.

For the Three Months ended March 31, 2024 the Company incurred an operating loss of $863,969 and a net loss of $863,711.

For the six months ended June 30, 2024, the Company incurred an operating loss of $1,718,823 and a net loss of $1,741,654.

In addition, for the year ended December 31, 2023, the Company incurred an operating loss of $5,297,671 and a net loss of $4,664,455.

Cash flows used in operations were $353,803 for the three months ended March 31, 2024 and $(3,166,067) for the year ended December 31, 2023.

The Company has cash and cash equivalents of $114,968 as of March 31, 2024.These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company has executed a share exchange agreement with Evtec Aluminium Ltd (“Evtec”), whereby the Company expects to acquire all of the issued and outstanding share capital of Evtec with the result of Evtec becoming a wholly-owned subsidiary of the Company (the “Exchange”).

in the Exchange will be accounted for as a reverse acquisition with Evtec being the accounting acquiror.

The Company believes that the merger with Evtec will attract additional capital investment as Evtec is substantially larger than Blackbox and has a strong acquisition pipeline.

Cash flows used in operations were $687,198 for the six months ended June 30, 2024, and $3,166,067 for the year ended December 31, 2023.

The Company has cash of $1,055,482 as of June 30, 2024.These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company has executed a share exchange agreement with Evtec Aluminium Limited (“Evtec Aluminium”), whereby the Company expects to acquire all of the issued and outstanding share capital of Evtec Aluminium with the result of Evtec Aluminium becoming a wholly-owned subsidiary of the Company (the “Exchange”).

in the Exchange will be accounted for as a reverse acquisition with Evtec Aluminium being the accounting acquiror.

The Company believes that the merger with Evtec Aluminium will attract additional capital investment as Evtec Aluminium is substantially larger than Blackbox and has a strong acquisition pipeline.

Management has also implemented a number of initiatives aimed at improving operating cash flow including, new product development, revised marketing strategies and expense reductions.

In addition, the Company has historically been able to raise debt or equity financing to meet its capital needs and is also evaluating strategic alternatives with respect to possible mergers or acquisitions.

There can be no assurance that the Company’s operational changes will impact its cash flow or if it will be able to raise additional capital or on what terms or if it will be able to execute the planned merger with Evtec.

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Liquidity and Capital Resources

At March 31, 2024, we had cash and marketable securities totaling $114,968 as compared to cash and marketable securities totaling $475,652 at December 31, 2023.

Our cash flows used in operations were $353,803 for the three months ended March 31, 2024 as compared to $1,250,895 for the same period in the prior year.

Net cash from investing activities for the three months ended March 31, 2024 was $3,303 as compared to $1,082,291 for the prior year period.

At June 30, 2024, we had cash and marketable securities totaling $1,055,482 as compared to cash and marketable securities totaling $475,652 at December 31, 2023.

Our cash flows used in operations were $687,198 for the six months ended June 30, 2024, as compared to $2,717,168 for the same period in the prior year.

Net cash from investing activities for the six months ended June 30, 2024, was $3,303 as compared to $2,593,776 for the prior year period.

The decrease in the cash flow from investing activities was due to the liquidation of marketable securities in order to fund the Company’s operations during the prior year.

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We do not expect capital expenditures to be significant for the remainder of 2024.

Net cash used in financing activities was $7,229 for the three months ended March 31, 2024 as compared to $7,186 for the prior year period.

As noted above, the Company intends to pursue the planned acquisition transaction with Evtec however there can be no assurance that it will be able to complete the transaction or that such a transaction will provide the Company with sufficient liquidity to fund its operations.

Net cash provided by financing activities was $1,266,680 for the six months ended June 30, 2024, as compared to net cash used in financing activities of $29,622 for the prior year period.

The increase in financing activities was the result of additional funding received in 2024 recorded as other liabilities and merchant cash advances.

As noted above, the Company intends to pursue the planned acquisition transaction with Evtec Aluminium however there can be no assurance that it will be able to complete the transaction or that such a transaction will provide the Company with sufficient liquidity to fund its operations.

In addition, the Company may need to raise additional debt or equity capital in order to fund its operations.

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Results of Operations

Comparison of Three Months Ended March 31, 2024 and 2023

For the three months ended March 31, 2024, our revenue was $649,420, as compared to $859,004, for the three months ended March 31, 2023.

The decline in revenue of 24.4% was due to a combination of fewer subscribers and lower average revenue per subscriber.

Average users for the three months ended March 31, 2024 was 2,944 as compared to 3,555 for the prior year period.

Average monthly revenue per user was $71,99 for the three months ended March 31, 2024 as compared to $80,17 in the prior year period.

The decline in average revenue per subscriber was due to the sale of a large number of two year subscriptions for $1,198 during the Black Friday Cyber Monday holiday promotions in 2023.

Cost of revenues for the three months ended March 31, 2024 and 2023 were $357,958 and $447,641, resulting in gross margins of 45% and 48%, respectively.

Comparison of Three Months Ended June 30, 2024 and 2023

For the three months ended June 30, 2024, our revenue was $684,712, as compared to $737,398, for the three months ended June 30, 2023.

The decline in revenue of 7% was due to fewer subscribers in the current year that was partially offset by higher average revenue per subscriber.

Average subscribers for the three months ended June 30, 2024, was 2,983 as compared to 3,987 for the prior year period.

Average monthly revenue per subscriber was $72.18 for the three months ended June 30, 2024, as compared to $61.42 in the prior year period.

The increase in average revenue per subscriber was due to a large promotion with heavily discounted memberships in the second quarter of 2023.

Cost of revenues for the three months ended June 30, 2024, and 2023 were $356,017 and $426,975, resulting in gross margins of 48% and 42%, respectively.

The primary components of cost of revenues include costs related to data and news feed expenses for exchange information which comprise the majority of the costs, as well as the costs for program moderators.

The gross margin percentage declined due to lower revenues and a higher percentage of fixed versus variable costs.

For the three months ended March 31, 2024, operating expenses were $1,155,428 as compared to $2,358,177 for the same period in 2022, a decrease of $1,202,749 or 51%.

The gross margin percentage is expected to remain between 45% and 50%.

For the three months ended June 30, 2024, operating expenses were $1,183,552 as compared to $1,741,722 for the same period in 2023, a decrease of $558,170 or 32%.

We significantly reduced expenditures in software development costs, advertising and marketing and selling general and administrative expenses for the 2024 period.

Selling, general and administrative expenses decreased from $1,777,634 for the three months ended March 31, 2023 to $905,929 for the three months ended March 31, 2024, a decrease of $871,705 or 49%.

Selling, general and administrative expenses decreased from $1,350,378 for the three months ended June 30, 2023, to $938,249 for the three months ended June 30, 2024, a decrease of $412,129 or 31%.

The decrease was primarily driven by lower stock-based compensation expense which was partially offset by higher professional fees associated with the pending Exchange with Evtec Aluminum.

Advertising and marketing expenses decreased by $82,258 or 38% from $214,981 for the three months ended March 31, 2023 to $132,723 for the three months ended March 31, 2024 as the Company continues to reposition its marketing strategy.

Software development costs decreased by $246,641 or 70% from $355,044 in the three months ended March 31, 2023 to $108,403 for the three months ended March 31, 20243.

The decreased software development costs reflected lower development costs for our new product Stock Nanny as it nears release.

Our loss from operations for the three months ended March 31, 2024, was $863,966 as compared to a loss from operations of $1,946,804 for the prior year period.

The improvement in the loss from operations was driven by lower operating expenses and was partially offset by the lower sales and gross profits.

Advertising and marketing expenses decreased by $41,752 or 27% from $153,415 for the three months ended June 30, 2023, to $111,663 for the three months ended June 30, 2024, as the Company continues to reposition its marketing strategy.

Software development costs decreased by $126,608 or 56% from $227,250 in the three months ended June 30, 2023, to $100,642 for the three months ended June 30, 2024.

The decreased software development costs reflected lower development costs for our new product Stock Nanny.

Our loss from operations for the three months ended June 30, 2024, was $854,857 as compared to a loss from operations of $1,431,299 for the prior year period.

The improvement in the loss from operations was driven by lower operating expenses and was partially offset by the lower sales.

Comparison of Six Months Ended June 30, 2024 and 2023

For the six months ended June 30, 2024, our revenue was $1,332,722, as compared to $1,589,638, for the six months ended June 30, 2023.

The decline in revenue of 16% was due to fewer subscribers in the current year that was partially offset by higher average revenue per subscriber.

Average subscribers for the six months ended June 30, 2024, was 2,989 as compared to 3,756 for the prior year period.

Average monthly revenue per subscriber was $74.30 for the six months ended June 30, 2024, as compared to $70.53 in the prior year period.

The increase in average revenue per subscriber was due to a large promotion with heavily discounted memberships in the second quarter of 2023.

Cost of revenues for the six months ended June 30, 2024, and 2023 were $713,975 and $874,606, resulting in gross margins of 46% and 45%, respectively.

The gross margin percentage is expected to remain between 45% and 50%.

For the six months ended June 30, 2024, operating expenses were $2,338,980 as compared to $4,099,899 for the same period in 2023, a decrease of $1,760,919 or 43%.

We significantly reduced expenditures in software development costs, advertising and marketing and selling general and administrative expenses for the 2024 period.

Selling, general and administrative expenses decreased from $3,128,012 for the six months ended June 30, 2023, to $1,844,178 for the six months ended June 30, 2024, a decrease of $1,283,834 or 41%.

The decrease was primarily driven by lower stock-based compensation expense which was partially offset by higher professional fees associated with the pending Exchange with Evtec Aluminum.

Advertising and marketing expenses decreased by $124,010 or 34% from $368,396 for the six months ended June 30, 2023, to $244,386 for the six months ended June 30, 2024, as the Company continues to reposition its marketing strategy.

Software development costs decreased by $373,249 or 64% from $582,294 in the six months ended June 30, 2023, to $209,045 for the six months ended June 30, 2024.

The decreased software development costs reflected lower development costs for our new product Stock Nanny.

Our loss from operations for the six months ended June 30, 2024, was $1,718,823 as compared to a loss from operations of $3,378,103 for the prior year period.

The improvement in the loss from operations was driven by lower operating expenses and was partially offset by the lower sales.

EBITDA (Non-GAAP Financial Measure)

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The following table sets forth a reconciliation of net loss to EBITDA:

Adjusted EBITDA Calculation

Three Months Ended June 30,

Interest expense

Investment income

Depreciation and amortization expense

Interest and financing expense

Financing costs

Stock based compensation

Total adjustments

Six Months Ended June 30,

Interest expense

Investment income

Depreciation and amortization expense

Financing costs

Stock based compensation

Total adjustments

Adjusted EBITDA

Off Balance Sheet Arrangements

As of March 31, 2024, we did not have any material off-balance sheet arrangements.

As of June 30, 2024, we did not have any material off-balance sheet arrangements.

Quantitative and Qualitative Disclosures About Market Risk

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements