What changed in this filing

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Item 1. Financial Statements

2026-05-20 compared with 2025-10-16 · 576 added, 413 removed, 27 unchanged (97% of the section changed)

Financial Statements

Blackboxstocks Inc.

REalloys, Inc.

and Subsidiaries

Condensed Consolidated Balance Sheets

As of September 30, 2025 and December 31, 2024

September 30,

(In thousands, except share and per share data)

March 31, 2026 December 31, 2025

(unaudited) (audited)

Current assets:

Accounts receivable

Note receivable

Prepaid expenses and other current assets

Cash $ 42,548 $ 2,824

Restricted cash 7,500 -

Accounts receivable, net of allowance for credit losses of $ 0

Inventory 3 -

Prepaid expenses 19,794 34,987

Project deposits

Total current assets 73,498 38,541

Long term assets:

Property and equipment, net

Right of use lease

Total long term assets

Non-current assets:

Goodwill 2,077 2,077

Intangible assets, net 1,257 1,316

Mineral Properties 50,532 50,532

Machinery and equipment, net 306 321

Operating lease right-of-use asset, net 789 602

Investments 2,000 -

Total non-current assets 56,961 54,848

Total assets 130,458 93,389

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

Accrued interest

Accounts payable and accrued expenses 5,004 3,433

Deposit Liability 7,500 -

Accrued expenses, related party 700 610

Unearned subscriptions 630 -

Lease liability right of use, current

Senior secured convertible debenture, net of issuance costs

Convertible note payable

Merchant cash advance

Advances payable

Advances payable, related party

Evtec advances payable

Current portion of operating lease liabilities 278 2

Other notes payable 317 -

Note payable, related party 144 94

SAFE liability, related party - 1,320

SAFE liability - 1,695

Total current liabilities 14,573 7,154

Long term liabilities:

Lease liability right of use, long term

Total long term liabilities

Commitments and contingencies (Note 7)

Non-current liabilities:

Contingent consideration - 34,561

Deferred tax liability 13,644 13,644

Long-term debt 154 154

Long-term operating lease liabilities 518 536

Total non-current liabilities 14,316 48,895

Total liabilities 28,890 56,049

Mezzanine equity

Series C redeemable preferred stock, $ 0.001 par value;

15,000 shares authorized, 0 and 684 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Stockholders’ equity

Preferred stock, $ 0.001 par value, 2,600,000 shares authorized;

no shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

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

3,269,998 issued and outstanding at September 30, 2025 and December 31, 2024, respectively

Series B Convertible Preferred Stock, $ 0.001 par value, 2,400,000 shares authorized;

no shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

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

3,962,093 and 3,538,038 issued and outstanding at September 30, 2025 and December 31, 2024, respectively

Treasury stock

Series A preferred stock, $ 0.001 par value;

3,269,998 shares authorized, 3,269,998 and 0 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Common stock, $ 0.001 par value, 350,000,000 shares authorized, 61,214,537 and 49,293,557 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Additional paid in capital 289,348 116,946

2 unchanged sentences

Total liabilities and Stockholders’ equity

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

Blackboxstocks Inc.

$ 130,458 $ 93,389

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

Share and per share amounts have been retroactively restated to reflect the 0.4129 exchange ratio applied in the February 24, 2026 reverse recapitalization.

Series X Preferred Stock is no longer presented as a separate class of equity in these unaudited condensed consolidated statements of mezzanine equity and stockholders' equity, as all such amounts have been reflected on a retrospective basis consistent with the recapitalization presentation.

REalloys, Inc.

and Subsidiaries

Condensed Consolidated Statements of Operations

For the Three and Nine months ended September 30, 2025 and 2024

For the three months ended

For the nine months ended

September 30,

Subscriptions

Other revenues

Total revenues

Cost of revenues

(In thousands, except share and per share data)

Three Months Ended March 31,

(unaudited) (unaudited)

Operating expenses:

Cost of sales

Software development costs 34 -

Selling, general and administrative

General and administrative

Advertising and marketing 2,541 -

1 unchanged sentence

Total operating expenses 88,363 867

Operating loss

Other (income) expense:

Loss from operations

( 87,657 ) ( 867 )

Interest expense 8 91

Financing costs

Amortization of debt issuance costs

Loss on disposition of assets

Gain on settlement of assets and liabilities

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 consolidated financial statements.

Blackboxstocks Inc.

Condensed Consolidated Statement of Stockholders ’ Equity

For the Nine Months Ended September 30, 2025 and 2024

Preferred Stock

Balances, December 31, 2023

Stock based compensation

Balances, March 31, 2024

Stock based compensation

Retirement of treasury stock

Balances, June 30, 2024

Stock based compensation

Issuance of stock for cash

Balances, September 30, 2024

Balances, December 31, 2024

Stock based compensation

Shares issued for cashless exercise of options

Shares issued for financing costs

Balances, March 31, 2025

Stock based compensation

Shares issued for cashless exercise of options

Balances, June 30, 2025

Issuance of shares to treasury

Issuance of stock for cash

Shares issued for cashless exercise of options

Shares issued for the conversion of senior secured convertible debenture

Stock based compensation

Balances, September 30, 2025

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

Blackboxstocks Inc.

Condensed Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2025 and 2024

For the nine months ended

September 30,

Cash flows from operating activities:

Change in fair value of contingent consideration 3,439 784

Impairment expense

Accretion of discount on issuance of Series C Preferred Stock 9,220 -

Total other expense 19,061 875

Net loss ( 106,718 ) ( 1,742 )

Basic and diluted net loss per share ( 1.98 ) ( 0.05 )

Weighted-average shares used in computation of net loss per share:

Basic and diluted 53,954,052 32,593,867

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

Share and per share amounts have been retroactively restated to reflect the 0.4129 exchange ratio applied in the February 24, 2026 reverse recapitalization.

REalloys, Inc.

and Subsidiaries

Condensed Consolidated Statements of Changes in Mezzanine Equity and Stockholders’ Equity (Deficit) (Unaudited)

(In thousands, except share data)

Three Months Ended March 31, 2026

Series C Preferred Shares Series A Preferred Shares

Common Shares

Shares Amount Shares Amount Shares Amount Additional Paid-In Capital Accumulated Deficit Total Stockholders' Equity (Deficit)

Balances as of December 31, 2025 2,000 $ 1,506 - - 119,383,766 $ 12 $ 116,976 $ ( 81,125 ) $ 35,863

Retroactive application of recapitalization ( 1,316 ) - - - ( 70,090,209 ) 37 ( 37 ) - -

Adjusted balances, as of December 31, 2025 684 1,506 - - 49,293,557 49 116,939 ( 81,125 ) 35,863

Issuance of Preferred Stock for cash 4,442 2,600 3,269,998 3 - - - - 3

Commitment shares issued for cash - - - - 1,077,353 1 - - 1

Issuance of Common Stock under SAFE - - - - 160,606 - 3,015 - 3,015

Common stock issued at Blackboxstocks Inc.

merger - - - - 4,480,437 4 6,230 - 6,234

Conversion of Special Warrants - - - - 2,093,664 2 37,998 - 38,000

Issuance of Common Stock, net of offering costs - - - - 2,702,702 3 47,008 - 47,011

Accretion of discount on issuance of Series C preferred stock - 9,220 - - - - - - -

Conversion of Series C preferred stock ( 5,126 ) ( 13,326 ) - - 1,374,018 1 13,325 - 13,326

Exercise of stock options - - - - 32,200 - - - -

Stock-based compensation expense - - - - - - 64,830 - 64,830

Imputed interest treated as a capital contribution - - - - - - 3 - 3

Net loss — Q1 2026 - - - - - - - ( 106,718 ) ( 106,718 )

Balances as of March 31, 2026 - $ - 3,269,998 3 61,214,537 $ 60 $ 289,348 $ ( 187,843 ) $ 101,568

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

Share and per share amounts have been retroactively restated to reflect the 0.4129 exchange ratio applied in the February 24, 2026 reverse recapitalization.

Three Months Ended March 31, 2025

Series C Preferred Shares Series A Preferred Shares

Common Shares

Shares Amount Shares Amount Shares Amount Additional Paid-In Capital Accumulated Deficit Total Stockholders' Equity (Deficit)

Balances as of December 31, 2024 - - - - 76,500,000 8 213 ( 5,449 ) ( 5,228 )

Retroactive application of recapitalization - - - - ( 44,913,150 ) 24 ( 24 ) - -

Adjusted balances, as of December 31, 2024 - - - - 31,586,850 32 189 ( 5,449 ) ( 5,228 )

Issuance of common stock for acquisition of business - - - - 5,780,600 6 4,833 - 6

Issuance of preferred stock and common stock for cash 413 - - - 2,064,500 2 769 - 771

Issuance of common shares for services - - - - 1,858,050 - - - -

Imputed interest treated as a capital contribution - - - - - - 91 - 91

Net loss - - - - - - - ( 1,742 ) ( 1,742 )

Balances as of March 31, 2025 413 $ - - - 41,290,000 $ 40 $ 5,882 $ ( 7,191 ) $ ( 1,269 )

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

Share and per share amounts have been retroactively restated to reflect the 0.4129 exchange ratio applied in the February 24, 2026 reverse recapitalization.

REalloys Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

Three Months Ended March 31,

Net loss $ ( 106,718 ) $ ( 1,742 )

Adjustments to reconcile net loss to net cash used in operating activities:

Amortization of debt issuance costs

Financing costs

Shares issued for financing costs

Stock based compensation

Loss on disposition of assets

Right of use lease

Investment income

Gain on settlement of other liabilities and note receivable

Changes in operating assets and liabilities:

Imputed interest expense 3 91

Change in operating lease ROU assets 82 -

Depreciation and amortization expense 87 -

Accretion of discount on preferred stock 9,220 -

Stock-based compensation expense 81,771 -

Change in fair value of contingent consideration 3,439 784

Impairment of investment 6,394 -

Change in operating assets and liabilities:

Prepaid expenses ( 4,118 ) -

Accounts payable and accrued expenses ( 169 ) 516

Accounts receivable ( 523 ) -

Other receivable

Prepaid expenses and other current assets

Accounts payable

Accrued interest

Unearned subscriptions

Advances payable

Advances payable, related party

Other liabilities

Operating lease liability ( 18 ) -

Net cash used in operating activities ( 10,550 ) ( 352 )

Cash flows from investing activities

Purchase of marketable securities

Sale of marketable securities

Issuance of note receivable

Cash acquired in reverse recapitalization 398 -

Purchase of fixed assets ( 2 ) -

Net cash provided by investing activities 396 -

Cash flows from financing activities

Proceeds from issuances of stock

Proceeds from issuance of notes payable

Proceeds from merchant cash advance

Principal payments on notes payable

Payments on merchant cash advance

Net cash provided by (used in) financing activities

Net increase (decrease) in cash

Cash - beginning of period

Cash - end of period

Supplemental disclosures:

Interest paid

Income taxes paid

Non-cash investing and financing activities:

Discount on note payable

Discount on note payable from fees payable

Fees payable settled through convertible note payable

Note payable issued for settlement of other liabilities and note receivable

Issuance of stock for settlement of senior secured convertible debenture

Retirement of treasury stock

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

Blackboxstocks Inc.

Notes to Condensed Consolidated Financial Statements

Summary of Significant Accounting Policies

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 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, 2025.

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, 2024.

Going Concern.

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 year ended December 31, 2024, the Company incurred an operating loss of $ 3,309,064 and a net loss of $ 3,471,227 .

For the nine months ended September 30, 2025, the Company incurred an operating loss of $ 2,470,009 and a net loss of $ 2,819,009 .

Cash flows used in operations totaled $ 2,819,753 for the nine months ended September 30, 2025.

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

On March 10, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with RABLBX Merger Sub Inc., a Nevada corporation and wholly owned subsidiary of the Company (“Merger Sub”) and REalloys Inc., a Nevada corporation (“REalloys”).

Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, REalloys is expected to merge with and into Merger Sub, at which time Merger Sub will cease to exist and REalloys will become a wholly-owned subsidiary of the Company (the “Merger”).

At the closing of the Merger (the “Closing”), the holders of capital stock and outstanding instruments convertible into or exercisable for capital stock of REalloys will receive shares of common and preferred stock of the Company, $ 0.001 par value, based on an exchange ratio formula in the Merger Agreement (the “Exchange Ratio”) or as otherwise agreed to in the Merger Agreement, which is subject to adjustment in the event the parties raise capital in excess of certain thresholds.

Immediately following Closing, based upon the Exchange Ratio, pre-Closing stockholders of the Company are expected to collectively retain approximately 7.3 % of the post-Close aggregate common stock of the Company, par value $ 0.001 (the “Company Common Stock”) and holders of REalloys capital stock and instruments convertible into or exercisable for capital stock of the REalloys will receive as merger consideration common and convertible preferred stock of the Company Common Stock representing approximately 92.7 % of the post-Close aggregate as common of the Company.

The Company believes that REalloys will be able to raise substantial capital and already has completed a financing that will provide $ 5,000,000 upon completion of the Merger.

Closing of the Merger is subject to various customary closing conditions including but not limited to the SEC declaring the registration statement effective, approval of REalloys initial listing application by Nasdaq, and stockholder approval.

In addition, the Company entered into a Securities Purchase Agreement with Five Narrow Lane LP, on January 17, 2025 (which was later amended on January 27, 2025, pursuant to which the Company agreed to issue, and Five Narrow Lane LP agreed to purchase a debenture (the “Purchase Agreement”).

The Purchase Agreement provides for financing of up to an aggregate principal amount $ 2,300,000 of which $ 2,050,000 was received during the period ended September 30, 2025.

There can be no assurance that the merger with REalloys will be completed and the related financing will be received.

The Company has historically been able to raise capital in order to fund its operations and on January 31, 2025, the Company filed a registration statement on Form S-3 for the sale of up to $ 50,000,000 of securities.

Pursuant to General Instruction I.B.6 of Form S-3, in no event will we sell securities in a primary offering with a value exceeding more than one-third of our public float in any 12-month period so long as our public float remains below $75,000,000.

On July 1, 2025 the Company entered into an At-The-Market Issuance Sales Agreement (the “ATM Agreement”) with Alexander Capital, L.P.

(“Alexander Capital”).

Pursuant to the ATM Agreement, the Company may from time to time issue and sell to or through Alexander Capital, acting as the Company’s sales agent, shares of the Company’s common stock having an aggregate offering price of up to $ 5,795,000 .

Sales of the shares are to be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

As sales agent, Alexander Capital will offer the shares at prevailing market prices and use its commercially reasonable efforts, consistent with its sales and trading practices, to sell on the Company’s behalf all of the shares requested to be sold by the Company, subject to the terms and conditions of the ATM Agreement.

As of October 15, 2025, the Company has raised gross proceeds of $ 1,445,712 under the ATM Agreement from the sale of 191,644 shares of its common stock.

There can be no assurance that the Company will be able to raise any capital or on acceptable terms.

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.

Subsequent Events.

The Company has evaluated all transactions through the date the financial statements were issued for subsequent event disclosure or adjustment consideration.

Blackboxstocks Inc.

Notes to Condensed Consolidated Financial Statements

Earnings or (Loss) Per Share.

Basic earnings per share (or loss per share), is computed by dividing the earnings (loss) for the period by the weighted average number of common stock shares outstanding for the period.

Diluted earnings per share reflects the potential dilution of securities by including other potentially issuable shares of common stock, including shares issuable upon conversion of convertible securities or exercise of outstanding stock options and warrants, in the weighted average number of common shares outstanding for the period.

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 period of loss.

The Company had total potential additional dilutive securities outstanding at September 30, 2025, as follows.

Series A Convertible Preferred Shares

Conversion rate

Common shares after conversion

Option shares

Warrant shares

Senior Secured Debentures

Conversion rate

Convertible note

Conversion rate

On January 13, 2025, pursuant to Section 8.1 of that certain, Share Exchange Agreement dated December 12, 2023, among the Company, Evtec Aluminium Limited (“Evtec”) and certain other parties, the Company and Evtec centered into a termination agreement (the “Termination Agreement”) pursuant to which the parties mutually agreed to terminate the Share Exchange Agreement.

As a result of the Termination Agreement, the Share Exchange Agreement is of no further force and effect (other than certain customary limited provisions that survive termination pursuant to the terms of the Share Exchange Agreement) and any ancillary agreements entered into in connection with the Share Exchange Agreement will also automatically terminate in accordance with their respective terms.

On January 22, 2025, the Company withdrew its Registration Statement on Form S-4 previously filed in connection with the Share Exchange Agreement.

Prior to the Termination Agreement, Evtec provided $ 1,293,000 of financial support to the Company.

On August 13, 2025, the Company and Evtec entered into a settlement agreement whereby Evtec and the Company cancelled the $ 1,150,000 note due by Evtec and the $ 1,293,000 advance due by the Company in return for a $ 100,000 note from Blackbox.io to Evtec due on July 1, 2026.

The Company recorded a gain of $ 93,000 on the settlement agreement.

Stockholders ’ Equity

During the nine months ended September 30, 2025, the Company issued 30,000 shares of common stock valued at $ 104,300 for consulting services.

During the nine months ended September 30, 2025, the Company issued 15,000 shares of common stock valued at $ 49,650 for financing costs.

During the nine months ended September 30, 2025, the Company issued 10,610 shares of common stock for the cashless exercise of options.

On July 1, 2025 the Company entered into an At-The-Market Issuance Sales Agreement with Alexander Capital, L.P..

Sales of the shares are to be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended.

As of September 30, 2025, the Company has raised gross proceeds of $ 1,120,795 from the ATM from the sale of 160,276 shares of its common stock and incurred $ 83,824 in expenses including fees of Alexander Capital and legal fees.

During the period ended September 30, 2025, the Company calculated the fair value of the warrants granted based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs:

the price of the Company’s common stock on the date of issuance;

risk-free interest rate of 3.96 %, expected volatility of 150 % based on the volatility of the Company’s common stock, exercise price of $ 5.46 , and terms of 5 years.

During the period ended September 30, 2025, the Company issued a warrant for 33,700 shares with an exercise price of $ 5.46 and a term of 5 years to its placement agent in connection with the issuance of the Senior Secured Debenture (See Note 3).

The warrant was valued at $ 233,010 and vested at issuance.

Incentive Stock Plan

During the period ended September 30, 2025, the Company calculated the fair value of the options granted based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs:

the price of the Company’s common stock on the date of issuance;

risk-free interest rate of 4.43 %, expected volatility of 153 % based on the volatility of the Company’s common stock, exercise price of $ 3.46 , and terms of 10 years.

During the period ended September 30, 2025, 46,787 shares of restricted common stock valued at $ 161,430 were granted.

The restricted common stock shares vest in equal amounts on March 31, 2025, June 30, 2025, September 30, 2025, and December 31, 2025.

During the period ended September 30, 2025, 10,000 shares of restricted common stock valued at $ 29,000 were granted.

The restricted common stock vested at issuance.

Blackboxstocks Inc.

Notes to Condensed Consolidated Financial Statements

The following table presents the Company’s options as of September 30, 2025:

Exercise Price

Remaining Life

Options as of December 31, 2024

Options as of September 30, 2025

At September 30, 2025, options to purchase 128,875 shares of common stock were vested and options to purchase 3,750 shares of common stock remained unvested.

The Company expects to incur expenses for the unvested options totaling $ 12,800 as they vest.

Related Party Transactions

During the nine months ended September 30, 2025, Mr.

Kepler advanced the Company $ 360,000 and the Company repaid Mr.

Kepler $ 436,209 .

At September 30, 2025, and December 31, 2024, advances totaling approximately $ 0 and $ 101,000 , respectively, remained due to Mr.

Senior Secured Debenture

The Company entered into a Securities Purchase Agreement dated with Five Narrow Lane LP (“FNL”), on January 17, 2025 which was later amended on January 27, 2025 (the “FNL Purchase Agreement”), pursuant to which the Company agreed to issue, and FNL agreed to purchase, a debenture (defined therein as the “Additional Debenture”).

The FNL Purchase Agreement provides for financing of up to an aggregate principal amount of $ 2,300,000 of which $ 2,050,000 has been received.

In addition, pursuant to the terms of the Additional Debenture, upon consummation of the Merger with REalloys, the Company shall, at its option, either (i) pay FNL in cash the entire principal amount of the Additional Debenture then outstanding, together with all accrued and unpaid interest thereon, the exit fee and any other amounts due thereunder, or (ii) issue to FNL such number of shares of Series C Convertible Preferred Stock, par value $ 0.001 per share, to be established by the Company upon closing of the Merger (the “Series C Stock”) for aggregate stated value equal to (x) 3.0 multiplied by (y) the entire principal amount of the Additional Debenture then outstanding, together with all accrued and unpaid interest thereon, the exit fee and other amounts due thereunder.

The Company has filed a registration statement (the “Resale Registration Statement”) with the SEC registering the resale of common stock underlying the Additional Debenture (the “Resale Securities”) which was declared effective by the SEC on May 5, 2025.

Prior to the consummation of the Merger, the Additional Debenture is convertible into common stock at a conversion price of $ 5.46 per share.

As of September 30, 2025, FNL had converted $ 609,650 of the Additional Debenture into 111,658 shares of common stock.

The Company incurred issuance costs of approximately $ 255,000 related to the Additional Debenture, which are being amortized over the life of the Additional Debenture.

The Additional Debenture is secured by substantially all of the assets of the Company, including its wholly owned subsidiary, and contains customary negative and affirmative covenants.

The Company was in compliance with these covenants at September 30, 2025.

The Additional Debenture matures on the earlier of January 17, 2026, or the date on which the Merger with REalloys is completed.

Convertible Note Payable

In connection with the Senior Secured Debenture with FNL, the Company incurred issuance costs of $ 164,000 payable to Palladium Capital Group (“Palladium”), the placement agent.

The Company and Palladium entered into a 7 % convertible note payable to settle the issuance costs.

The convertible note, has a present conversion price $ 5.46 per share of common stock, matures on the earlier of January 17, 2026, or the effective date of the Merger.

In connection with the sale of the Additional Debenture to FNL, the Company incurred issuance costs of $ 164,000 payable to Palladium Capital Group (“Palladium”), the placement agent.

The Company issued Palladium a 7 % convertible note payable to settle the issuance costs.

The convertible note has a present conversion price $ 5.46 per share of common stock and matures on the earlier of January 17, 2026, or the effective date of the Merger with REalloys.

On August 13, 2025, the Company and Evtec entered into a settlement agreement whereby Evtec and the Company cancelled the $ 1,150,000 note due by Evtec and the $ 1,293,000 advance due by the Company to Evtec in return for a $ 100,000 note from Blackbox.io to Evtec due on July 1, 2026.

The Note is unsecured and bears interest at 10 % per annun.

Blackboxstocks Inc.

Notes to Condensed Consolidated Financial Statements

Merchant Cash Advances

During February 2025, the Company’s September 27, 2024 merchant cash advance was amended to reduce the weekly payments.

Under the amended agreement, the merchant cash advance was to be repaid through eight weekly payments of $ 1,214 , two weekly payments of $ 4,585 , and eight weekly payments of $ 3,643 .

During February 2025, the Company’s October 31, 2024 merchant cash advance was amended to reduce the weekly payments.

Under the amended agreement, the merchant cash advance was to be repaid through eight weekly payments of $ 2,040 , seven weekly payments of $ 8,160 , and eight weekly payments of $ 36,120 .

The Company issued 15,000 shares of common stock with a value of $ 49,650 in consideration for amending the two merchant cash advances.

The amendments of the cash advances were accounted for as a debt extinguishment and reissuance in accordance with ASC 470-50-40-10.

As of September 30, 2025, the merchant cash advances had been fully repaid.

Commitments and Contingencies

Merger Agreement

On March 10, 2025 the Company entered into its Merger Agreement with RABLBX Merger Sub Inc., a Nevada corporation and wholly owned subsidiary of the Company and REalloys.

Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, REalloys will merge with and into Merger Sub, Merger Sub will cease to exist and REalloys will become a wholly-owned subsidiary of the Company.

At the Closing of the Merger, the holders of capital stock and outstanding instruments convertible into or exercisable for capital stock of REalloys will receive shares of common and preferred stock of the Company, $ 0.001 par value, based on an Exchange Ratio formula in the Merger Agreement or as otherwise agreed to in the Merger Agreement, which is subject to adjustment in the event the parties raise capital in excess of certain thresholds.

Immediately following Closing, based upon the Exchange Ratio, pre-Closing stockholders of the Company are expected to collectively retain approximately 7.3 % of the post-Close aggregate Company Common Stock of the Company, par value $ 0.001 and holders of REalloys capital stock and instruments convertible into or exercisable for capital stock of the REalloys will receive as merger consideration newly issued shares of Company Common Stock representing approximately 92.7 % of the post-Close aggregate as common and preferred stock of the Company.

The Merger will be accounted for as a reverse merger with REalloys being the accounting acquiror.

On July 1, 2025, the Company, Merger Sub and REalloys entered into a First Amendment to Agreement and Plan of Merger (the “First Amendment”) in order to reflect Blackboxstocks’ intent to conduct an at-the-market offering of its common stock, pursuant to which up to 250,000 shares of Blackboxstocks common stock may be sold and issued without affecting the calculation of Company Merger Shares (as defined in the Merger Agreement) to be issued in the Merger.

Specifically, the First Amendment provides that:

The definition of “Permitted Shelf Takedown” was added to Section 1.1 of the Merger Agreement and means “an at-the-market offering of Parent common stock under its shelf registration statement on Form S-3 (File No.

333-284626) which became effective on February 10, 2025, which constitutes a “Permitted Shelf Takedown” as contemplated under the terms of that certain Amendment to Securities Purchase Agreement, dated January 27, 2025, by and between Parent and Five Narrow Lane LP, and the transactions contemplated thereby.”

The definition of “Parent Outstanding Shares” was changed in Section 1.1 of the Merger Agreement and means “ without duplication, (including, without limitation, the effects of the Split, if completed) the total number of shares of Parent Common Stock outstanding immediately prior to the Effective Time expressed on a fully-diluted basis, and assuming, without limitation or duplication, the issuance of shares of Parent Common Stock in respect of all In the Money Parent Options, warrants or other rights or commitments to receive shares of Parent Common Stock or Parent Preferred Stock (or securities convertible or exercisable into shares of Parent Common Stock or Parent Preferred Stock other than Parent Series A Stock), whether conditional or unconditional, that are outstanding as of immediately prior to the Effective Time;

provided, however, (i) the total number of Parent Common Stock issuable upon conversion of the outstanding Parent Series A Stock shall not be included in the calculation of Parent Outstanding Shares, (ii) up to 250,000 shares of Parent Common Stock or such lesser number of shares actually sold and issued in the Parent’s Permitted Shelf Takedown shall not be included in the Calculation of Parent Outstanding Shares, and (iii) for purposes of calculating the Parent Outstanding Shares, the Parent Outstanding Shares shall be increased by one third (1/3) of the total Parent Financing Preferred Stock Conversion Shares rounded down to the nearest whole number.”

Blackboxstocks Inc.

Notes to Condensed Consolidated Financial Statements

On August 22, 2025, the Company, Merger Sub and REalloys entered into a Second Amendment to Agreement and Plan of Merger (the “Second Amendment”) in order to delete and restate in its entirety the definition of “Permitted Transfer” in the CVR Agreement, which is attached as Exhibit E to the Merger Agreement, as follows:

“Permitted Transfer” means (i) the transfer of any or all of the CVRs (upon the death of the Holder) by will or intestacy;

(ii) transfer by instrument to an inter vivos or testamentary trust in which the CVRs are to be passed to beneficiaries upon the death of the trustee;

(iii) transfers made pursuant to a court order of a court of competent jurisdiction (such as in connection with divorce, bankruptcy or liquidation);

(iv) a transfer made by operation of law (including a consolidation or merger);

(v) a transfer from a participant’s account in a tax-qualified employee benefit plan to the participant or to such participant’s account in a different tax-qualified employee benefit plan or to a tax-qualified individual retirement account for the benefit of such participant;

(vi) a transfer from a participant in a tax-qualified employee benefit plan, who received the CVRs from such participant’s account in such tax-qualified employee benefit plan, to such participant’s account in a different tax-qualified employee benefit plan or to a tax-qualified individual retirement account for the benefit of such participant;

or (vii) in the case of CVRs held in book-entry form or other similar nominee form, from a nominee to a beneficial owner (and, if applicable, through an intermediary) or from such nominee to another nominee for the same beneficial owner, in each case as allowable by DTC.

Registration Statement

On January 31, 2025, the Company filed a registration statement on Form S-3 for the sale of up to $ 50,000,000 of securities.

From time to time in the normal course of business, the Company may be party to lawsuits or other claims.

No such matters are expected to have a material impact on the Company’s financial position or results of operations.

Subsequent Event

Between October 1, 2025 and October 15, 2025, FNL converted an additional $ 982,800 of the Additional Debenture into 180,000 shares of common stock.

FNL has converted a total of $ 1,592,450 of the $ 2,050,000 Additional Debenture of into common stock.

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

We urge you to read the following discussion in conjunction with management’s discussion and analysis contained in our Annual Report on Form 10-K for the year ended December 31, 2024, as well as with our financial statements and the notes thereto included elsewhere herein.

In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions.

Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed in the section titled “ Risk Factors ” and elsewhere in this Report.

Blackboxstocks, Inc.

is a financial technology and social media hybrid platform offering real-time proprietary analytics and news for stock and options traders of all levels.

Our web-based software (the “Blackbox System”) employs “predictive technology” enhanced by artificial intelligence to find volatility and unusual market activity that may result in the rapid change in the price of a stock or option.

We continuously scan the New York Stock Exchange (“NYSE”), NASDAQ, Chicago Board Options Exchange (the “CBOE”) and other options markets, analyzing over 10,000 stocks and over 1,500,000 options contracts multiple times per second.

We provide our users with a fully interactive social media platform that is integrated into our dashboard, enabling our users to exchange information and ideas quickly and efficiently through a common network.

We have also introduced a live audio/video feature that allows our members to broadcast on their own channels to share trading strategies and market insight within the Blackbox community.

We employ a subscription based Software as a Service (“SaaS”) business model and maintain a base of users that spans over 40 countries.

We believe the Blackbox System is a unique and disruptive financial technology platform combining proprietary analytics and broadcast enabled social media to connect traders of all types worldwide on an intuitive, user-friendly system.

The complexity of our backend analytics is neatly hidden from the end user by our simple and easy to navigate dashboard which includes real-time alerts, scanners, financial news, institutional grade charting and proprietary analytics.

We launched the Blackbox System web application for domestic use and made it available to subscribers in September 2016.

Subscriptions for the use of the Blackbox System web application are currently sold on a monthly and/or annual subscription basis to individual consumers through our website at https://blackboxstocks.com.

Our principal office is located at 5430 LBJ Freeway, Suite 1485, Dallas, Texas 75240 and our telephone number is (972) 726-9203.

Our Common Stock is quoted on the Nasdaq Stock Market LLC (the “Nasdaq”) under the symbol “BLBX.” Our corporate website is located at https://blackboxstocks.com.

We are not including the information contained in our website as part of, or incorporating it by reference into, this Report on Form 10-Q.

Proceeds from notes payable 217 -

Proceeds from notes payable, related party 50 -

Proceeds from SAFE Liability - 100

Payment of deferred cash consideration - ( 139 )

Proceeds from share subscription liability

Proceeds from public offering of common stock

Proceeds from issuance of Series C Preferred Stock 2,600 -

Net cash provided by financing activities 57,378 841

Net increase in cash and restricted cash 47,224 490

Cash and restricted cash, beginning of period 2,824 113

Cash and restricted cash, end of period 50,048 603

Supplemental disclosures of non-cash investing and financing activities:

Acquisition of a business - $ 3,545

SAFE liabilities converted to equity 3,015 $ -

Special Warrants converted to equity 38,000 $ -

Common stock issued 48 $ -

Net assets acquired in recapitalization 6,234 $ -

Conversion of Series C Preferred Stock 13,327 $ -

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

Share and per share amounts have been retroactively restated to reflect the 0.4129 exchange ratio applied in the February 24, 2026 reverse recapitalization.

REalloys, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Amounts in thousands, except as noted and share and per share amounts)

Note 1 – Description of Business and Basis of Presentation

Description of Business

REalloys, Inc.

(the “Company” or “REalloys”) is a development-stage company building a North American integrated rare earth to high-performance neodymium iron boron (“NdFeB”) magnet materials and magnet supply chain focused on meeting the demands of the protected markets of the United States, which includes the U.S.

National Defense Stockpiles (“NDS”), Defense Industrial Base (“DIB”), Nuclear Industrial Base (“NIB”), robotics, electric aviation, and critical infrastructure industries.

The Company trades on The Nasdaq Capital Market under the ticker symbol “ALOY.”

The Company has adopted a structured approach to building its North American rare earth to high performance NdFeB magnet materials and magnet supply chain through producing magnet materials and magnets that meet the performance requirements of US Protected Markets clients and building capacity to meet the demand of US Protected Market clients on a timetable to meet such demand

In line with this strategy, the Company initially acquired 100 % of Strategic Metals Development Inc., on May 29, 2024, which owns 100 % of the Hoidas Lake Rare Earth Element Project in Saskatchewan, Canada, which comprises 14 contiguous mineral claims totaling 12,522 hectares.

The Company believes that the Hoidas Lake project has the potential to be a long-term North American source of rare earth materials as a primary feedstock for its magnet materials and integrated supply chain.

The Company also acquired PMT Critical Metals Inc.

(“PMTCM”), on March 31, 2025, which became a wholly owned subsidiary, and which operates the Euclid Magnet Facility in Euclid, Ohio.

The Euclid Magnet Facility produces rare earth metals and magnet materials for the Defense Logistics Agency, the U.S.

Department of Energy’s AMES National Laboratory and industry clients, and the Company intends to expand production capacity to meet a portion of U.S.

protected market demand.

The Company is continuing to evaluate additional opportunities to strengthen its integrated North American magnet and magnet materials supply chain and improve resiliency, capabilities and capacity.

Reverse Recapitalization

On February 24, 2026, the Company completed a reverse recapitalization transaction with Blackboxstocks Inc.

(“Blackbox”) pursuant to the Agreement and Plan of Merger, as amended.

For accounting purposes, REalloys was determined to be the accounting acquirer.

The transaction was not a business combination under ASC 805 because substantially all of the fair value of Blackbox’s gross assets was concentrated in its developed technology platform.

Accordingly, the transaction was accounted for as a reverse recapitalization:

Blackbox’s assets and liabilities were recorded at their historical carrying values;

no goodwill or intangible assets were recognized in connection with the transaction;

the historical financial statements of REalloys became those of the combined entity;

and the equity structure was retroactively restated to reflect the legal capital structure of Blackbox.

Following the close of the transaction, former REalloys stockholders owned approximately 92.2 % of the outstanding common stock of the combined company, with former Blackbox stockholders owning approximately 7.8 %.

The Company commenced trading on The Nasdaq Capital Market under the symbol “ALOY” on February 25, 2026.

Basis of Presentation

For the nine months ended September 30, 2025, the Company incurred an operating loss of $2,470,009 and a net loss of $2,819,009.

In addition, for the year ended December 31, 2024, the Company incurred an operating loss of $3,309,064 and a net loss of $3,471,227.

Cash flows used in operations were $2,649,753 for the nine months ended September 30, 2025, and $705,725 for the year ended December 31, 2024.

The Company had cash of $93,186 as of September 30, 2025.These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

On March 10, 2025, the Company entered into a Merger Agreement with RABLBX Merger Sub Inc., a Nevada Corporation, and wholly owned subsidiary of the Company (“Merger Sub”) and REalloys.

Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, REalloys is expected to merge with and into Merger Sub, at which time Merger Sub will cease to exist and REalloys is expected to become a wholly-owned subsidiary of the Company.

At the Closing of the Merger, the holders of capital stock and outstanding instruments convertible into or exercisable for capital stock of REalloys will receive shares of common and preferred stock of the Company, $0.001 par value, based on an Exchange Ratio formula in the Merger Agreement or as otherwise agreed to in the Merger Agreement, which is subject to adjustment in the event the parties raise capital in excess of certain thresholds.

Immediately following Closing, based upon the Exchange Ratio, pre-Closing stockholders of the Company are expected to collectively retain approximately 7.3% of the post-Close aggregate Company Common Stock and holders of REalloys capital stock and instruments convertible into or exercisable for capital stock of the REalloys will receive as merger consideration common and convertible preferred stock of Company Common Stock representing approximately 92.7% of the post-Close aggregate as common stock of the Company.

The Company believes that REalloys will be able to raise substantial capital and REalloys has completed a financing that will provide $5,000,000 upon completion of the Merger.

In addition, the Company entered into a Securities Purchase Agreement dated with Five Narrow Lane LP (“FNL”), on January 17, 2025 (which was later amended on January 27, 2025 pursuant to which the Company agreed to issue, and FNL agreed to purchase debentures (the “FNL Purchase Agreement”).

The FNL Purchase Agreement provides for financing of up to an aggregate principal amount of $2,300,000 of convertible debentures of which $2,050,000 has been received.

An additional $250,000 is expected to be funded when the Merger Registration Statement is declared effective by the SEC.

There can be no assurance that the Merger with REalloys will be completed and the related financing will be received.

The Company has historically been able to raise capital in order to fund its operations and on January 31, 2025, the Company filed a shelf registration statement on Form S-3 for the sale of up to $50,000,000 of securities.

There can be no assurance that the Company will be able to raise any capital or on acceptable terms.

On July 1, 2025 the Company entered into an At-The-Market Issuance Sales Agreement (the “ATM Agreement”) with Alexander Capital, L.P.

(“Alexander Capital”).

As sales agent, Alexander Capital will offer the shares at prevailing market prices and will use its commercially reasonable efforts, consistent with its sales and trading practices, to sell on the Company’s behalf all of the Shares requested to be sold by the Company, subject to the terms and conditions of the ATM Agreement.

As of October 15, 2025, the Company has raised gross proceeds of $1,445,712 from the ATM Agreement.

Significant Accounting Policies

There have been no changes from the Summary of Significant Accounting Policies described in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on March 21, 2025.

Liquidity and Capital Resources

At September 30, 2025, we had cash totaling $93,186 as compared to cash totaling $17,036 at December 31, 2024.

Our cash flows used in operations were $2,649,753 for the nine months ended September 30, 2025, as compared to $381,353 for the nine months ended September 30, 2024.

2024 cash flows from operations included $1,518,000 in cash flows from financial support provided by Evtec Aluminium Limited (“Evtec”) in connection with the transaction contemplated by our Share Exchange Agreement which was terminated in January 2025.

Net cash used in investing activities was $0 and $1,096,697 for the nine months ended September 30, 2025 and 2024 respectively.

Investing cash flows for the 2024 period included $1,100,000 for the issuance of a convertible note to Evtec.

We do not expect investing activities to require significant capital in the next twelve months.

Net cash provided by financing activities was $2,725,903 for the nine months ended September 30, 2025, as compared to $1,366,274 for the prior year period.

The 2025 financing activity cash flow was primarily due to proceeds from the sale and issuance of our Additional Debenture to FNL in the amount of $2,050,000 and issuances under our ATM Agreement resulting in proceeds of $1,036,645 after deducting transaction costs which were partially offset by payments made on merchant cash advances.

As noted above, the Company expects one additional funding from FNL remaining in the amount of $250,000 which is due upon the SEC declaring the Merger consideration registration statement on form S-4 effective.

Under the terms of the FNL Purchase Agreement, we may have to utilize up to 50% of the proceeds from any sale of securities under our shelf Registration Statement on Form S-3 to repay the outstanding Additional Debenture held by FNL .Pursuant to the Company’s ATM Agreement, it is able to sell up to $5,795,000 of the Company’s common stock of which $1,445,712 has been sold as of October 15, 2025.

As noted above, the Company intends to pursue the planned Merger with REalloys, however there can be no assurance that it will be able to complete the Merger or that such Merger 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.

There can be no assurance that the Company will be able to do so or on acceptable terms.

Results of Operations

Comparison of Three Months Ended September 30, 2025 and 2024

For the three months ended September 30, 2025, our revenue was $696,995, as compared to $647,842, for the three months ended September 30, 2024.

The increase in revenue of $49,153 or 7.6% was due to additional revenue generated from the Company’s educational classes.

Average subscribers for the three months ended September 30, 2025, was 2,876 as compared to 2,940 for the prior year period.

Average monthly revenue per subscriber was $74.68 for the three months ended September 30, 2025, as compared to $73.34 in the prior year period.

Cost of revenues for the three months ended September 30, 2025, and 2024 were $322,905 and $293,426, resulting in gross margins of 53.7% and 54.7%, 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.

For the three months ended September 30, 2025, operating expenses were $812,980 as compared to $1,088,582 for the same period in 2024, a decrease of $275,602 or 25.3%.

Software development costs increased only slightly in the current period to $106,642.

Selling, general and administrative expenses decreased from $891,282 for the three months ended September 30, 2024, to $655,904 for the three months ended September 30, 2025.

The decrease of $235,378 was primarily driven by lower professional fees and lower stock based compensation in the 2025 period.

Advertising and marketing expenses decreased by $43,642 or 47.0% to $49,911 for the three months ended September 30, 2025 from the 2024 period.

The Company reduced its advertising expenses as it rolled out new pricing tiers for its products in late September.

Instead of offering a single product for either monthly or annual subscriptions, the Company provides subscriptions for Options Basic, Options Plus, Equities Plus or Equities and Options Premium on either a monthly or annual subscription.

Pricing for monthly subscriptions range from $59 for Options Basic to $149 for Equities and Options Premium.

Annual subscriptions range from $566 to $1,430.

Advertising expense is expected to increase in the fourth quarter due to holiday promotions.

The Company may incur additional marketing expense in connection with its educational products the during the balance of 2025.

Our loss from operations for the three months ended September 30, 2025, was $438,890 as compared to a loss from operations of $734,166 for the prior year period.

The $275,602 decrease in the operating loss was primarily due to lower operating expenses as described above.

Other income and expense included $55,172 in interest expense primarily related to the FNL debenture issued in 2025 as well as amortization of debt issuance costs of $78,016 related to the FNL debenture and financing costs of $242,529.

The Company also recorded a one time gain of $93,000 related to the settlement of the Evtec note and advances.

Other income and expense for the quarter ended September 30, 2024 was $46,667 and consisted primarily of financing costs related to merchant cash advances.

Comparison of Nine months ended September 30, 2025 and 2024

For the nine months ended September 30, 2025, our revenue was $1,802,856 as compared to $1,981,874, for the nine months ended September 30, 2024.

The decline in revenue of $179,118 or 9.0% was due to fewer subscribers in the current year as well as slightly lower revenue per subscriber.

Average subscribers for the nine months ended September 30, 2025, was 2,759 as compared to 2,975 for the prior year period.

Average monthly revenue per subscriber was $69.48 for the nine months ended September 30, 2025, as compared to $73.93 in the prior year period.

The lower average revenue per subscriber was driven by promotional offerings of $29.97 per month offered earlier in 2025.

Cost of revenues for the nine months ended September 30, 2025 and 2024 were $1,017,467 and $1,007,401, resulting in gross margins of 43.6% and 49.2%, respectively.

The decrease in the gross profit margin was driven by lower absorption of fixed costs and lower average revenue per subscriber.

For the nine months ended September 30, 2025, operating expenses were $3,255,398 as compared to $3,397,622 for the same period in 2024, a decrease of $142,224 or 4.2%.

Software development costs of $315,534 for the nine months ended September 30, 2025 were approximately the same as the prior year.

Selling, general and administrative were $2,744,695 for the nine months ended September 30, 2025, as compared to $2,735,480 for the nine months ended September 30, 2024.

Advertising and marketing expenses decreased by $146,853 or 43.5% from $337,227 for the nine months ended September 30, 2024, to $190,434 for the nine months ended September 30, 2025, as the Company continues to reposition its marketing strategy including the introduction of new pricing tiers as described above.

The Company may incur additional marketing expense in connection with its educational products the during the balance of 2025.

Our loss from operations for the nine months ended September 30, 2025, was $2,470,009 as compared to a loss from operations of $2,423,049 for the prior year period.

The increase in the loss from operations of $46,960 was due to lower gross profits which were largely offset by lower operating expenses as discussed above.

Other income and expense for the nine months ended September 30, 2025 was $349,000.

Interest and amortization of debt issuance costs relating primarily to the debentures totaling $265,292 and other financing costs of $335,254 were partially offset by other income relating to employee retention credits of $158,546 and a gain from the settlement of the Evtec note and advance of $93,000.

Other expenses for the nine months ended September 30, 2024 consisted primarily of financing costs related to merchant cash advances of 69,621 and a loss on disposition of assets of $29,940.

EBITDA (Non-GAAP Financial Measure)

We report our financial results in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

However, management believes the presentation of certain non-GAAP financial measures provides useful information to management and investors regarding financial and business trends relating to the Company’s financial condition and results of operations, and that when GAAP financial measures are viewed in conjunction with the non-GAAP financial measures, investors are provided with a more meaningful understanding of the Company’s ongoing operating performance.

In addition, these non-GAAP financial measures are among the primary indicators management uses (i) to compare operating performance on a consistent basis, (ii) for planning purposes including the preparation of its internal annual operating budget and (iii) as a basis for evaluating performance.

For all non-GAAP financial measures in this release, we have provided corresponding GAAP financial measures for comparative purposes in the report.

EBITDA is defined by us as net income (loss) before interest expense, income tax, depreciation and amortization expense and certain non-cash.

EBITDA is not a measure of operating performance under GAAP and therefore should not be considered in isolation nor construed as an alternative to operating profit, net income (loss) or cash flows from operating, investing or financing activities, each as determined in accordance with GAAP.

Also, EBITDA should not be considered as a measure of liquidity.

Moreover, since EBITDA is not a measurement determined in accordance with GAAP, and thus is susceptible to varying interpretations and calculations, EBITDA, as presented, may not be comparable to similarly titled measures presented by other companies.

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

For the three months ended

For the nine months ended

September 30,

Interest expense (income)

Amortization of debt issuance costs

Other depreciation and amortization expense

Financing costs

Stock based compensation

Total adjustments

Off Balance Sheet Arrangements

As of September 30, 2025, we did not have any material off-balance sheet arrangements.

Quantitative and Qualitative Disclosures About Market Risk

We are a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act, and as such, we are not required to provide the information required under this Item.

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the SEC applicable to interim financial reporting.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted as permitted by such rules and regulations.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation have been included.

The unaudited Condensed Consolidated Financial Statements include the accounts of REalloys, Inc.

and its wholly owned subsidiaries.

All intercompany balances and transactions have been eliminated in consolidation.

Results of operations and cash flows for the interim periods presented herein are not necessarily indicative of the results that would be achieved during a full year of operations or in future periods.

These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited financial statements and related notes included in the Company's Current Report on Form 8-K/A filed on May 12, 2026, and in Blackbox's Annual Report on Form 10-K for the year ended December 31, 2025.

Note 2 – Summary of Significant Accounting Policies

The Company’s significant accounting policies are described in the notes to the audited financial statements included in the Company's Current Report on Form 8-K/A filed on May 12, 2026 (amending the Current Report on Form 8-K filed on February 25, 2026), and in Blackbox's Annual Report on Form 10-K for the year ended December 31, 2025, which is incorporated by reference into such Current Reports.

There have been no material changes to the Company’s significant accounting policies during the three months ended March 31, 2026 except as described below.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of expenses during the reporting period.

Actual results could differ from those estimates.

Significant estimates include, but are not limited to, accounting for the reverse recapitalization transaction, the valuation of equity instruments and stock-based compensation, the assessment of the recoverability of long-lived assets, including mineral properties, and the evaluation of the Company’s ability to continue as a going concern.

The accounting for payments under the Saskatchewan Research Council (SRC) arrangements requires judgment in determining whether amounts should be recorded as prepaid assets, research and development expense, project development expense, construction in progress, or property and equipment.

This assessment depends on the nature of the underlying goods or services received, whether specific equipment or materials have been acquired, whether such equipment or materials have alternative future use, and whether costs are directly attributable to preparing a long-lived asset for its intended use.

Restricted Cash

Restricted cash consists of cash deposits that are not available for general corporate purposes due to contractual or other restrictions.

The Company presents restricted cash together with cash and cash equivalents in the statement of cash flows and includes such amounts within current or non‑current assets on the consolidated balance sheets based on the expected timing of release of the restrictions.

As of March 31, 2026, restricted cash was $ 7.5 million and consisted of deposits received from prospective investors in connection with potential investment transactions.

These deposits were subject to contractual conditions and were therefore not available for use in the Company’s operations.

In April 2026, following a joint decision by the Company and the prospective investors not to proceed with the potential investments, the Company returned the full $ 7.5 million of

restricted cash to the investors.

Accordingly, no restricted cash balance remained outstanding subsequent to the return of the deposits.

The following table provides a reconciliation of cash and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows (in thousands).

(in thousands) March 31, 2026 December 31, 2025

Cash $ 42,548 $ 2,824

Restricted cash 7,500 -

Total cash and restricted cash $ 50,048 $ 2,824

Simple Agreements for Future Equity (SAFEs)

All outstanding SAFEs converted into shares of common stock upon the February 24, 2026 listing.

Investments — Equity securities without a readily determinable fair value (ASC 321)

The Company holds an investment in EVTEC Holdings Group Limited ("EVTEC"), a private UK-based automotive components manufacturer, acquired through the February 24, 2026 reverse recapitalization with Blackbox.

The Company applies the measurement alternative for equity securities without a readily determinable fair value under ASC 321.

Under this method, the investment is carried at cost minus impairment, plus or minus adjustments from observable price changes in orderly transactions for identical or similar investments of the same issuer See Note 4 – Blackbox Reverse Recapitalization.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, when control of goods or services is transferred to customers.

PMTCM recognizes revenue from the sale of rare earth metals and magnet materials primarily under the output method or right-to-invoice practical expedient as production is completed and delivered to customers.

Subscription revenue from the Blackbox trading analytics platform is recognized ratably over the subscription period on a straight-line basis.

Note 3 – Going Concern

In the Company’s previously issued interim financial statements for the period ended September 30, 2025, management concluded that substantial doubt existed about the Company’s ability to continue as a going concern.In connection with the preparation of the Company's issued Audited Consolidated Financial Statements for the year ending December 31, 2025, management reevaluated the Company’s liquidity position in accordance with ASC 205-40.

The Company completed a public offering on March 9, 2026, generating net proceeds of approximately $ 46.8 million.

Management performed the ASC 205-40 assessment by comparing projected baseline cash requirements for the twelve months following the issuance date against available liquidity.

Baseline obligations (operating costs, lease payments, and contractual commitments that cannot be deferred or eliminated) are estimated to be substantially below available liquidity.

Expenditures under the SRC agreements represent discretionary project spend capable of being sequenced or financed separately and were excluded from the baseline analysis.

Based on this assessment, management concluded that substantial doubt about the Company’s ability to continue as a going concern did not exist.

There has been no change in the circumstances or the assessment of the Company's ability to continue as a going concern in the preparation of these interim condensed consolidated financial statements.

The Company expects that additional capital will be required for longer-term strategic growth;

however, this conclusion does not depend on any specific future financing transaction.

Note 4 – Blackbox Reverse Recapitalization

As described in Note 1 , on February 24, 2026, the Company completed its reverse recapitalization with Blackbox.

The transaction was determined not to be a business combination under ASC 805 because the screen test was met:

substantially all of the fair value of Blackbox’s gross assets was concentrated in a single group of identifiable assets (the developed technology platform underlying the Blackbox subscription service).

As all of the gross asset value was concentrated in this single asset class, no further analysis was required and the acquired set was not considered a business.

Under reverse recapitalization accounting, the Company’s historical financial statements represent a continuation of REalloys (the accounting acquirer).

Blackbox’s assets and liabilities were recorded at historical carrying values as of the closing date.

No goodwill or intangible assets were recognized in connection with the transaction.

The equity structure prior to the transaction has been retroactively adjusted to reflect the exchange ratio of 0.4129 (the number of Blackbox shares issued for each REalloys share).

The EVTEC Holdings Group Limited investment ("EVTEC"), held by Blackbox, was initially recorded at its historical carrying value of $ 8.4 million as of the closing date.

Management performed a fair value assessment of the investment as of February 24, 2026 in accordance with ASC 820 and ASC 321.

Based on that assessment which reflected the failure of two contemplated public-market transaction pathways, persistent operational disruption resulting from a cyber-attack on EVTEC's primary customer, reduced FY2026 revenue guidance, and concentrated customer exposure, management concluded that the fair value of the investment as of the closing date was approximately $ 2.0 million.

An impairment of approximately $ 6.4 million was recognized at the merger date, reducing the carrying value to $ 2.0 million.

For further details on the reverse recapitalization's impact on equity see Note 8 and for impacts to stock-based compensation see Note 9 .

Note 5 – Prepaid Expenses and Project Deposits

Prepaid expenses and project deposits consist primarily of the unamortized value of consulting service agreements settled through issuance of common stock and advance payments to the Saskatchewan Research Council pursuant to the Company's pilot metallization project.

Under stock-based consulting arrangements, the grant-date fair value of common shares issued for future services is recorded as a prepaid asset and amortized over the applicable service period in accordance with ASC 718

On November 20, 2025, the Company entered into a series of strategic arrangements with SRC to develop capabilities in rare-earth processing and metallization.

The arrangements include, among other matters, a pilot-scale processing arrangement designed to evaluate and define processing parameters for dysprosium and terbium metallization and a commercial-scale engineering and processing facility arrangement intended to support development of a commercial-scale metallization facility.

During the three months ended March 31, 2026, the Company paid deposits of $ 1.4 million related to the Pilot process and $ 1.0 million related to the commercial-scale metallization facility.

As of March 31, 2026, the Company had not received equipment, goods, or services related to these deposits, and no equipment or facility assets had been delivered, commissioned, or placed into service.

Accordingly, the Company recorded the $ 2.4 million as current prepaid deposits in the accompanying unaudited condensed consolidated balance sheet.

The Pilot project is intended to support pilot-scale process development and validation activities.

The pilot process and related pilot equipment are expected to provide the technical information necessary to determine processing specifications, equipment configuration, operating parameters, and other requirements for the Company’s planned commercial-scale metallization facility.

Amounts paid relating to the Pilot are expected to be recognized as research and

project development expenses as the related services are performed, unless specific equipment, materials, or other assets are acquired that have an alternative future use and otherwise qualify for capitalization.

Amounts paid relating to the commercial-scale metallization facility are expected to be capitalized as construction in progress or property and equipment only when the Company receives or obtains control of identifiable equipment, materials, construction activity, or other directly attributable costs that qualify for capitalization.

Until such time, advance payments are recorded as current prepaid deposits and assessed for recoverability each reporting period.

The agreements are time-and-materials arrangements, and total costs, timing, and scope remain subject to SRC work programs, procurement, technical results, and the Company’s approval of future expenditures.

The Company has not recognized a liability for future amounts that may become payable under the arrangements because such amounts relate to future goods, services, or construction activities that had not been received or incurred as of March 31, 2026.

The following table presents prepaid expenses and project deposits as of March 31, 2026 and December 31, 2025 (in thousands).

Prepaid Expenses and Project Deposits March 31, 2026 ($)

December 31, 2025 ($)

Equity-based consulting prepaid (shares-for-services) $ 17,820 $ 34,987

Saskatchewan Research Council advance payments 2,400

Advertising and marketing prepaid 974

Professional fees and other prepaid 1,000

Total prepaid expenses and project deposits $ 22,194 $ 34,987

Note 6 – Mineral Properties and Machinery and Equipment

The Hoidas Lake Rare Earth Element Project comprises 14 contiguous mineral claims totaling 12,522 hectares in Saskatchewan, Canada.

The property is in the exploration and evaluation stage.

Costs associated with acquisition of mineral properties are capitalized;

exploration costs are expensed as incurred.

No depletion has been recognized as the property has not been placed into production.

Mineral claims remain in good standing through assessment credits with minimum required expenditures deferred through dates ranging from October 2027 to June 2029.

As of March 31, 2026, no impairment indicators were identified with respect to the Hoidas Lake mineral property or the Euclid Magnet Facility fixed assets.

Depreciation expense for the three months ended March 31, 2026 was included in depreciation and amortization expense in the condensed consolidated statements of operations.

Machinery and equipment are recorded at cost and consist primarily of equipment and leasehold improvements.

Depreciation is computed using the straight-line method over the estimated useful lives of the related assets.

The Company evaluates mineral properties and machinery and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Mineral properties and machinery and equipment were $ 50.8 million and $ 50.9 million as of March 31, 2026 and December 31, 2025, respectively.

The following table presents mineral properties and machinery and equipment as of March 31, 2026 and December 31, 2025 (in thousands)

Mineral Properties and machinery and equipment March 31, 2026 ($)

December 31, 2025 ($)

Mineral properties

$ 50,532 $ 50,532

Property and equipment 655 655

Leasehold improvements and other 135

Accumulated depreciation

( 483 ) ( 334 )

Total mineral properties and machinery and equipment $ 50,838 $ 50,852

Note 7 – Accrued Liabilities

Accrued liabilities consist primarily of accrued professional fees, including legal, accounting, and consulting services, as well as other general and administrative liabilities incurred in the normal course of business.

Accrued liabilities were $ 2.1 million and $ 3.3 million as of March 31, 2026 and December 31, 2025, respectively.

Note 8 – Stockholders' Equity (Deficit)

The Company i s authorized to issue 350,000,000 shares of common stock, par value $ 0.001 per share.

As of March 31, 2026 and December 31, 2025, there were approximately 61,214,537 and 49,293,557 shar es of common stock issued and outstanding, respectively.

Reverse Recapitalization Impact on Equity

On February 24, 2026, the Company completed a reverse recapitalization transaction (the Merger) with Blackbox, which resulted in a recapitalization of the Company’s equity structure.

As part of the transaction, the historical equity of REalloys was retroactively adjusted to reflect the legal capital structure of Blackbox.

Accordingly, all share and per-share amounts presented in the accompanying Condensed Consolidated Financial Statements have been retroactively adjusted to reflect this transaction.

In connection with the reverse recapitalization, the Company assumed 123,875 outstanding options of Blackbox.

All such options were fully vested as of the closing date of the reverse recapitalization and did not require any post‑closing service from the holders.

Accordingly, no additional compensation cost was recognized in connection with the assumption of these awards and no stock‑based compensation expense is recognized for these options in periods subsequent to the reverse recapitalization.

Following the transaction, the assumed options continue to be classified as equity instruments and are presented within additional paid‑in capital in the Company’s condensed consolidated balance sheets.

After the Merger's close and on or before March 31, 2026, 62,500 options were exercised with a weighted average exercise price of $ 9.81 , The options acquired have a weighted average remaining life of 6.1 years and weighted average exercise price of $ 9.81 per option.

Additionally, in connection with the reverse recapitalization, the Company assumed warrants for an aggregate of 100,245 common shares, with a weighted average remaining life of 2.6 years and weighted average exercise price of $ 13.19 per warrant.

Following the transaction, the assumed options and warrants continue to be classified as equity instruments and are presented within additional paid‑in capital in the Company’s condensed consolidated balance sheets.

The Company's March 2025 warrants to purchase up to 5,000,000 shares of the Company's common stock at an exercise price of $ 10.00 per share were converted on the closing of the reverser recapitalization pursuant to the terms of the warrant and the Blackbox merger agreement.

The converted aggregate number of the Company's common stock available under the warrants is 2,064,500 with a converted exercise price of $ 24.22 per share with a remaining life of approximately 9 years.

Following the transaction, the warrants continue to be classified as equity instruments and are presented within additional paid‑in capital in the Company’s condensed consolidated balance sheets.

Series A Preferred Stock

At the close of the Merger, the Company recognized 10,000,000 shares of authorized preferred stock at $ 0.001 par value, 5,000,000 of which are designated as “Series A Convertible Preferred Stock” at $ 0.001 par value, and 2,400,000 of which are designated as “Series B Convertible Preferred Stock” at $ 0.001 par value.

Shares of the Series A Convertible Preferred Stock (the “Series A Stock”) rank pari passu with the Company’s Common Stock with respect to dividend and liquidation rights.

Additionally, each share entitles the holder to 100 votes on matters submitted to Company stockholders.

There are 3,269,998 shares of Series A Stock outstanding of which 1,634,999

shares each are owned by Gust Kepler, former CEO of Blackbox and Leonard Sternheim, the Company's CEO and Director.

Series A Preferred Stock Option Agreements

Prior to the closing of the Merger, Company and Gust Kepler, former CEO of Blackbox, executed an Option Agreement (the “Option Agreement”), pursuant to which the Company has the right to call for redemption and Gust Kepler shall have the right to cause the Company to redeem all of the issued and outstanding Series A Convertible Preferred Stock of the Company held by Gust Kepler in exchange for shares of Series A Convertible Preferred Stock of Blackbox.io, Inc.

(“Blackbox Operating”), a Delaware corporation and wholly owned subsidiary of the Company.

See Note 15 for details of the subsequent redemption of the call option by Mr.

Contingent Value Rights Agreements

At the Closing of the Merger, the Company entered into a Contingent Value Rights Agreement (the “CVR Agreement”).

The CVR Agreement provides that each share of Blackbox Common Stock held by stockholders immediately prior to the Merger's closing will receive a dividend of one contingent value right (“CVR”) entitling such holders to receive, in connection with certain transactions involving Blackbox Operating (a “CVR Transaction”), an amount equal to the net proceeds received by the Company at the closing of such transaction.

A CVR Transaction is generally a transaction pursuant to which (i) Blackbox Operating grants, sells, licenses or otherwise transfers some or all of the rights to the Blackbox Operating assets, or other monetizing event of all or any part of the Blackbox Operating assets and (ii) the Company receives or Blackbox Operating determines to distribute net proceeds from such transaction as a dividend to its stockholders.

The CVR payment obligations will expire February 24, 2028.

The CVRs are not be transferable, except in certain limited circumstances, are not be certificated or evidenced by any instrument, will not accrue interest and will not be registered with the SEC or listed for trading on any exchange.

There is no guarantee that any CVR Transaction or payment pursuant thereto will be earned.

Additional Paid-In Capital

Additional paid-in capital primarily consists of amounts received in excess of par value from the issuance of common stock, as well as the impact of the reverse recapitalization transaction.

Transaction costs directly attributable to the reverse recapitalization were recorded as a reduction to additional paid-in capital.

Wa rrants and Other Equity Instruments

The Company has issued warrants and other equity-linked instruments in connection with prior financing transactions.

These instruments are evaluated for classification as either equity or liabilities in accordance with applicable accounting guidance.

Certain warrants are classified as liabilities and are remeasured at fair value each reporting period, with changes in fair value recognized in the condensed consolidated statements of operations.

Public Offering — March 9, 2026

On March 9, 2026, the Company completed an underwritten public offering (the “Offering”) pursuant to an effective registration statement on Form S-3, at a price of $ 18.50 per share.

The Company issued 2,702,702 shares of common stock and received gross proceeds of $ 50.0 million, resulting in net proceeds of approximately $ 46.8 million after deducting underwriting discounts and offering expenses.

Concurrently with the Offering, the Company terminated the at-the-market equity offering program (effective March 5, 2026), under which Blackbox had raised approximately $ 2.2 million between its inception and February 19, 2026, the last day of active sales under the program.

Special Warrants Conversion

Prior to the reverse recapitalization closing, REalloys Solutions Inc.

had issued Special Warrants to certain investors for aggregate gross proceeds that were contractually entitled to convert into $ 38.0 million worth of REalloys shares upon a qualifying go-public transaction.

At the February 24, 2026 closing, 2,093,664 shares of common stock were issued in connection with the conversion of all outstanding Special Warrants ( 2,093,664 shares × $ 18.15 per share = $ 38.0 million).

The carrying value of the Special Warrant liability was adjusted from $ 34.6 million to $ 38.0 million (a $ 3.4 million loss on remeasurement) immediately prior to derecognition, and the $ 38.0 million was reclassified to additional paid-in capital upon conversion.

See Note 10 - Fair Value Measurements .

SAFE Conversions

All outstanding Simple Agreements for Future Equity converted into 166,116 shares of common stock upon the February 24, 2026 qualifying go-public transaction.

The aggregate carrying value of SAFE liabilities of $ 3.0 million was reclassified to additional paid-in capital upon conversion.

Series X and Series C Preferred Stock Conversion

On February 23, 2026, substantially contemporaneously with the Merger, the Company closed the second tranche of its previously announced private placement of Series X Preferred Stock, issuing 3,000 shares for aggregate gross proceeds of $ 3,000 .

Each share of Series X Preferred Stock was exchanged on the Effective Date for one share of Series C Convertible Preferred Stock of the combined company.

The Company incurred costs of $ 400 related to the issuance of Series C Convertible Preferred Stock during the three months ended March 31, 2026.

During the three months ended March 31, 2026, all outstanding shares of Series C Convertible Preferred Stock were converted into shares of the Company’s common stock in accordance with their terms.

In accordance with the reverse recapitalization accounting, the Series X Preferred Stock outstanding at December 31, 2025 and at any time during the three months ended March 31, 2026, have been retroactively recast as Series C preferred stock, and the previously reported Series X Preferred Stock is no longer presented as a separate class of equity in these unaudited condensed consolidated balance sheets or unaudited condensed consolidated statements of mezzanine equity and stockholders’ equity, as all such amounts have been reflected on a retrospective basis consistent with the recapitalization presentation.

Note 9 – Stock-Based Compensation

In December 2025, the Company’s board of directors adopted the REalloys Inc.

2025 Long‑Term Incentive Plan (the “2025 Plan”), which provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), deferred share units (“DSUs”), performance awards and other share‑based awards to employees, directors and eligible service providers.

The 2025 Plan became effective in connection with the Company’s go‑public transaction and listing on The Nasdaq Stock Market on February 25, 2026.

The maximum number of shares of common stock that may be issued under the 2025 Plan is 8,500,000 , subject to adjustment in the event of stock splits, stock dividends, recapitalizations and other similar events as provided in the 2025 Plan.

Pursuant to the Blackbox recapitalization, the 2021 Blackbox, Inc.

Incentive Stock Plan (the “2021 Plan”), remains in effect, with 612,500 shares authorized to be issued under the plan.

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 executive and director stock, non-performance and non-market based RSU awards and unvested stock options granted under the 2021 plan are accounted for as equity-classified share-based payment arrangements under ASC 718, with compensation cost recognized over the applicable requisite service periods and a corresponding increase to additional paid-in capital.

Performance-based RSU awards are recognized only when achievement of the applicable performance condition is considered probable.

Market-based awards are measured at grant-date fair value and recognized over the requisite service period regardless of whether the market condition is ultimately achieved, provided the requisite service is rendered.

For service agreements in which common shares are issued in exchange for services with non-employees, other than Directors and Officers, the grant-date fair value is recorded as a prepaid asset and amortized on a straight-line basis over the service period.

Awards modified in connection with the reverse recapitalization

Prior to the Transaction, Private REalloys Inc., granted restricted share units (“RSUs”) and restricted performance share units (“RPSUs”) under its equity incentive plan.

In connection with the reverse recapitalization described in Note 1 - Reverse Recapitalization , each outstanding RSU and RPSU was converted in accordance with the REalloys Inc.

2025 Long‑Term Incentive Plan, which provides that, in the event of a recapitalization, reorganization, merger, consolidation, share exchange or other similar corporate transaction affecting the fair value of an award, the Committee shall adjust the number and type of shares subject to outstanding awards and other applicable terms so that the fair value of the award immediately after the transaction equals the fair value of the award immediately prior to the transaction.

Accordingly, the Company adjusted the number of shares subject to the outstanding RSUs and RPSUs using the applicable exchange ratio, 0.4129 , shares of Public REalloys Inc., common stock for each underlying share of Private REalloys common stock, while preserving the underlying economic value of the awards immediately before the reverse recapitalization.

The service‑based and performance conditions vesting terms of the awards remained unchanged as they were granted in contemplation of a public listing.

The conversion was accounted for as a modification of equity‑classified awards and an equity restructuring under ASC 718, with no impact on the fair value of the converted awards.

Immediately prior to the reverse recapitalization, there were 12,000,000 RSUs and 5,500,000 RPSUs outstanding, all granted to the CEO of then Private REalloys Inc., now Public REalloys Inc.

As a result of applying the 0.4129 exchange ratio, and the modification terms of these awards under the 2025 incentive plan, the awards converted into 3,407,718 RSUs and 1,135,919 RPSUs over Public REalloys Inc., common stock, which are included in the stock-based compensation tables presented below.

Also, in connection with the reverse recapitalization, the Company assumed outstanding stock options of Blackboxstock Inc.

All such options were fully vested as of the closing date of the transaction and, accordingly, no future service was required from the holders after the closing date.

As a result, the assumed options do not give rise to post‑transaction stock‑based compensation expense and are not included in the Company’s share‑based compensation disclosures for the three months ended March 31, 2026.

Instead, these assumed options are reflected within equity as part of the reverse recapitalization and related capitalization of the Company.

See Note 8– Stockholders' Equity (Deficit).

The following table summarized the number of stock-based awards granted by the Company and the weighted-average grant date fair value per unit for the three-month periods ended March 31, 2026 and 2025, respectively:

Three months Ended

March 31, 2026 March 31, 2025

Weighted- Weighted-

Stock-Based Average Stock-Based Average

Awards Exercise

Granted Price

Restricted stock units - 2025 plan

3,509,650 $ 18.15 - $ -

The following tables shows stock-based compensation expense by award type (in thousands):

Three months Ended

March 31, 2026 March 31, 2025

Stock awards 16,941

Restricted stock units

Restricted Performance share units

Total stock-based compensation expense $ 81,771 $ -

RSU, Market-based RSU and Performance-based RSU Awards

The Company granted market-based restricted stock units covering 1,375,000 equivalent shares of common stock to its Chief Executive Officer, Leonard Sternheim, with a grant date of December 15, 2025.

The grant-date fair value of these awards grant-date fair value using a Monte Carlo simulation model.

The grant-date fair value was estimated at $ 11.5 million, based on an implied initial market capitalization of approximately $ 512.1 million, an expected volatility of 90.0 %, risk-free interest rates based on U.S.

Treasury yields, an expected term consistent with the five-year performance

period, and an assumption of no expected dividends.

Compensation cost for this award is recognized over the requisite service period beginning on the grant date and is not reversed if the market condition is not ultimately achieved, provided that the requisite service has been rendered.

In addition, Mr.

Sternheim holds 568,182 performance-based restricted stock units (RPSUs) that vest upon achievement of specified milestones, including:

a qualifying strategic offtake or processing agreement, generating $ 50.0 million in revenue, raising $ 100.0 million in capital, or sustaining a $ 1.0 billion market capitalization for 30 consecutive trading days.

No expense has been recognized for the RPSUs as vesting has not been determined to be probable.

The following table summarizes the activity related to the Company’s RSU awards during the period presented:

Number of Grant Date

Shares Fair Value

Nonvested as of January 1, 2026

12,000,000 $ 5.00

Converted in reverse recapitalization 3,305,785 18.15

Granted 3,509,650 18.15

Vested ( 3,407,718 ) 18.15

Cancelled/Forfeited - -

Nonvested as of March 31, 2026

3,407,718 $ 18.15

The following table summarizes the activity related to the Company’s market-based RSU awards:

Number of Grant Date

Nonvested as of January 1, 2026

1,375,000 $ 8.35

Converted in reverse recapitalization 567,738 20.22

Cancelled/Forfeited - -

Nonvested as of March 31, 2026

567,738 $ 20.22

The following table summarizes the activity related to the Company’s performance-based RSU awards:

Number of Grant Date

Nonvested as of January 1, 2026

4,125,000 $ 5.00

Converted in reverse recapitalization 568,182 18.15

Cancelled/Forfeited - -

Nonvested as of March 31, 2026

568,182 $ 18.15

Shares-for-Services Consulting Agreements

The Company has entered into equity-based consulting agreements with various advisors and service providers under which shares of common stock were issued in exchange for future services.

The unamortized fair value of shares issued is recorded as a prepaid asset and recognized as consulting expense over the applicable service period.

For the three months ended March 31, 2026, stock-based compensation expense was $ 81.8 million.

As of March 31, 2026, total unrecognized stock-based compensation expense, net of estimated forfeitures, related to non-vested equity awards was $ 91.4 million, which is expected to be recognized over a weighted-average period of 3.35 years.

Note 10 – Fair Value Measurements

The Company measures certain financial liabilities at fair value on a recurring basis, including contingent consideration and certain warrant liabilities.These liabilities are classified within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs.

Changes in the fair value of these liabilities are recognized in the condensed consolidated statements of operations.

For the three months ended March 31, 2026 and 2025, the Company recognized changes in fair value of approximately $ 3.4 million and $ 0.8 million, respecti vely.

Derivative Instruments

The Company's derivative instruments pertain to the acquisition-related contingent consideration in the form of special warrants (the "Special Warrants") issued by the Company on May 29, 2024 (the "Issuance Date").

The Special Warrants were recorded as acquisition-related contingent consideration and relate to warrants that automatically converted into $ 38.0 million worth of the Company’s common shares upon completion by the Company of a liquidity event (as defined in the share purchase agreement).

All unconverted warrants become null and void if not converted on or before December 31, 2026.

The fair value of the acquisition-related contingent consideration was determined using the probability-weighted expected return method (“PWERM”) valuation model, with the following range of key assumptions used in the PWERM:

the timing of a liquidity event of February 2026 and March 2026, a discount rate of 3.66 % and 3.60 %, the probability of timing of a liquidity event of 80 % and 15 %, and a discount for lack of marketability of 3.7 % and 5.7 %.

Accordingly, the acquisition-related contingent consideration is measured at fair value on a recurring basis using unobservable inputs;

therefore, this instrument represents a Level 3 measurement within the fair value hierarchy.

The fair value of the special warrant liability at the time of initial recognition was $ 28.4 million.

Because the valuation model uses unobservable inputs, there is inherent uncertainty in measuring the fair value of this contingent consideration, and actual results may differ from these estimates.

In February 2026, the Company completed its merger with Blackbox, which constituted a liquidity event as defined under the share purchase agreement.

Prior to conversion, the carrying value of the Special Warrant liability was adjusted from $ 34.6 million to the contractual conversion amount of $ 38.0 million, resulting in a fair value loss of $ 3.4 million recorded in earnings.

The Special Warrants then automatically converted into 2,093,664 common shares of the Company on February 24, 2026, and the$ 38.0 million liability was derecognized with an offsetting credit to additional paid-in capital.

As of March 31, 2026 and December 31, 2025, the fair value of the Special Warrant liability was $ 0 and

$ 34.6 million, respectively.

During the three months ended March 31, 2026 and 2025, the Company recorded a change in fair value of the contingent consideration of $ 3.4 million (loss) and $ 0.8 million (loss), respectively.

The following table sets forth a summary of changes in fair value of the Company’s Level 3 liabilities for the three months ended March 31, 2026 (in thousands):

Balance as of December 31, 2025

Change in fair value 3,439

Conversion to equity upon liquidity event ( 38,000 )

Balance as of March 31, 2026

The following table sets forth a summary of changes in fair value of the Company’s Level 3 liabilities for the three months ended March 31, 2025 (in thousands):

Balance as of December 31, 2024

Change in fair value ( 784 )

Balance as of March 31, 2025

Note 11 – Commitments and Contingencies

The Company may be subject to claims and contingencies in the normal course of business.

As of March 31, 2026, management is not aware of any material legal proceedings requiring disclosure.

At March 31, 2026, the company has general and administrative commitments of $ 759 which are expected to be settled in the next 12 months.

Details of the Company's other commitments are as follows (in thousands):

Operating Leases (ASC 842)

Right-of-Use Assets and Lease Liabilities March 31, 2026 ($)

December 31, 2025 ($)

ROU lease asset, net 789 602

Lease liability, current 278 2

Lease liability, long-term 518 536

Total lease liability $ 796 $ 538

SRC Commitments

On November 20, 2025, the Company executed four agreements with the SRC.

See Note 5 for additional details.

The Company currently anticipates that, subject in all cases to progress, scope refinement, and the Company’s ongoing approval, it may advance the following in relation to the SRC arrangements (in thousands):

(In thousands)

Activity 2026 ($)

Pilot HREE Metallization $ 3,970 $ 5,520 $ - $ 9,490

Commercial HREE Metallization 21,830 17,390 - 39,220

SRC REPF Upgrade 6,530 7,970 6,120 20,620

Total $ 32,330 $ 30,880 $ 6,120 $ 69,330

Concurrently, the Company entered into a long-term supply arrangement with SRC pursuant to which SRC will supply the Company with rare earth oxide and metal products produced using the expanded processing capabilities.

In consideration of the prepaid advances, the Company is entitled to priority off-take rights, including an upfront allocation of 80 % of forecast annual production and a right of first refusal on uncommitted volumes.

Products are purchased at SRC’s cost of production plus an agreed margin at reasonable commercial rates, subject to customary adjustments and applicable

The supply arrangement includes standard delivery, take-or-pay, and force majeure provisions and is non-recourse to the Company beyond its obligation to pay for approved expenditures and delivered product.

No expenditures or activity related to the supply agreement were approved on or before March 31, 2026.

Acquisition Related Commitments & Contingencies

The Hoidas Lake Property asset that was acquired on May 29, 2024, is subject to a 1.8 % Net Smelter Return (“NSR”) royalty.

The NSR royalty has a maximum value of $ 1 million Canadian Dollars.

Per the agreement, the royalty is paid quarterly from gross revenue after the project attains commercial production.

These royalty payments represent a contingent consideration liability that the Company will recognize when it becomes probable and reasonably estimable or when the contingency is resolved.

Contingent Value Rights Agreement

Pursuant to the the Merger with Blackbox, the Company entered into a The CVR.

The CVR payment obligations will expire February 24, 2028.

There is no guarantee that any CVR Transaction or payment pursuant thereto will be earned and no amounts were known to be or probably to be payable under the agreement at March 31, 2026.

Note 12 – Related Party Transactions

On June 3, 2024, the Company entered into a promissory note agreement with a then 4.9 % stockholder of the Company, who is also related to the Co-founder, CEO & Director of the Company (the "Lender"), for the principal amount of $ 2.0 million, due upon the earlier of (i) January 31, 2026 and (ii) within two business days of the receipt by the Company of financing in excess of $ 10.0 million.

The note bears no stated interest rate.

The $ 10.0 million financing threshold was triggered upon closing of the March 9, 2026 public offering;

accordingly, the outstanding balance is presented as current.

During the three months ended March 31, 2026, the Company made a repayment of $ 50 , resulting in a balance of $ 44 at March 31, 2026.

As a related party debt instrument with no stated interest charge, the Company records imputed interest at an estimated market rate of 18 % per annum.

The Company recorded imputed interest of $ 400 for the year ended December 31, 2025 and approximately $ 3 for the three months ended March 31, 2026.

Imputed interest is recorded as interest expense with a corresponding increase to additional paid-in capital.

Note Payable — Isaac Sternheim

Balance, December 31, 2025

Repayment — February 3, 2026 ( 50 )

Balance, March 31, 2026

In connection with the acquisition of PMTCM, the Company assumed an employment contract with Andrew Sherman, the chief executive officer of PMTCM and a significant shareholder of the Company.

Pursuant to the employment agreement, Mr.

Sherman is entitled to a one-time acquisition bonus of $ 250 and a base salary of $ 30 per month.

No amounts have been paid to date.

As of March 31, 2026 and December 31, 2025, the accrued liability related to Mr.

Sherman's employment contract was $ 700 and $ 610 , respectively.

In connection with the acquisition of Blackbox, Mr.

Kepler advanced the Company approximately $ 100 , all of which remained outstanding at March 31, 2026.

Note 13 – Segment Reporting

The Company operates in one reportable segment.

The Company’s Chief Executive Officer has been identified as the Chief Operating Decision Maker (”CODM”).

The CODM manages the Company as a single, integrated rare-earth development and supply chain enterprise focused on building a North American mine-to-magnet supply chain for U.S.

Protected Markets.

The CODM reviews the Company’s consolidated financial statements, including consolidated net loss and total operating expenses, to assess performance and allocate resources across the Company’s development activities.

The Company is in the early stage of development and has not established ongoing commercial revenues or positive operating cash flows sufficient to cover operating costs.

Accordingly, all resource allocation decisions are made at the consolidated enterprise level.

The Company’s operating activities include mineral property exploration (HLREE), rare earth metal and magnet material production (Euclid Magnet Facility), metallization and processing development (SRC arrangement) and administrative functions, all of which are managed as components of a single integrated supply chain strategy.

On February 24, 2026, the Company completed its previously announced merger transaction with Blackbox, which has been accounted for as a reverse recapitalization under ASC 805-40, with pre-merger REalloys Inc.

(now REalloys Solutions Inc.) treated as the accounting acquirer.

From the closing of the merger through March 31, 2026, Blackbox.io Inc., the legacy operating subsidiary of Blackbox, was a wholly owned consolidated subsidiary of the Company, and its results of operations for that period are included in the Company’s consolidated financial statements.

Blackbox.io operates a consumer-facing financial-markets analytics SaaS platform whose products, customers, distribution channels, and regulatory environment are wholly dissimilar to the Company’s integrated rare-earth supply chain.

The Company’s Chief Operating Decision Maker does not regularly review the discrete operating results of Blackbox.io for purposes of resource allocation or performance assessment within the Company’s integrated rare-earth supply chain, and accordingly, those operations do not constitute a separate operating segment of the Company under ASC 280.

In connection with the merger, the Company entered into an Option Agreement under which a third party holds an option to acquire Blackbox.io.

The Option Agreement had not been exercised as of March 31, 2026;

its prospective exercise would result in the deconsolidation of Blackbox.io under ASC 810-10-40-5 and equity-method accounting under ASC 323.

The pending Option Agreement is described as a subsequent event in Note 15 – Subsequent Events.

Note 14 – Loss per Share

The following table reconciles the weighted-average common shares outstanding used in the calculation of basic earnings or loss per common share to the weighted-average common shares outstanding used in the calculation of diluted earnings or loss per common share:

In thousands, except per share data March 31, 2026 March 31, 2025

Net loss $ ( 106,718 ) $ ( 1,742 )

Preferred stock dividends accrued - -

Net income available to common stockholders

( 106,718 ) ( 1,742 )

Numerator for basic and diluted EPS $ ( 106,718 ) $ ( 1,742 )

Weighted-average common shares outstanding 53,954,052 32,593,867

Diluted weighted-average common shares outstanding 53,954,052 32,593,867

Weighted-average preferred shares outstanding 1,625 116

Earnings (loss) per share:

Basic $ ( 1.98 ) $ ( 0.05 )

Diluted $ ( 1.98 ) $ ( 0.05 )

Excluded Securities:

Warrants and options to purchase 2,164,745 and 61,375 shares of common stock, 3,407,718 restricted share units and 1,135,920 restricted performance share units, and 3,269,988 shares of Series A Preferred Stock were outstanding in the three months ending March 31, 2026 but were not included in the computation of diluted EPS because they were anti-dilutive

Note 15 – Subsequent Events

The Company has evaluated subsequent events from April 1, 2026 through May 20, 2026, the date the financial statements were issued.

The following events are disclosed in accordance with ASC 855, Subsequent Events.

Conversion of Series A Convertible Preferred Stock

On April 14, 2026, a holder converted 550,000 shares of Series A Convertible Preferred Stock into 550,000 shares of common stock on a one -for-one basis pursuant to the conversion terms of the Certificate of Designations of the Series A Preferred Stock.

Series A Preferred Option Exercise — May 5, 2026

On May 5, 2026, Gust Kepler exercised his put right under the Option Agreement dated February 24, 2026.

Pursuant to the Option Exercise Agreement:

(i) Gust Kepler transferred an aggregate of 1,084,999 shares of the Company's Series A Convertible Preferred Stock to the Company;

and (ii) the Company transferred an aggregate of 3,269,998 shares of Series A Preferred Stock of Blackbox.io, Inc.

(representing all of the Series A Preferred Stock of Blackbox.io owned by the Company) to Gust Kepler (the “Option Exercise”).

The Option Exercise reduces the outstanding and available Series A Preferred Stock balance at the Company and extinguishes the Company’s Series A Preferred Stock holding in Blackbox.io.

Following the Option Exercise, Blackbox.io ceased to be a subsidiary of the Company.

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