Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FORM 10-Q (Mark One) For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-41051 BLACKBOXSTOCKS INC. (Exact name of registrant as specified in its charter) Nevada 45-3598066 (State or other ...

Company Overview - REalloys Inc. has appointed Brad Wall, former Premier of Saskatchewan, to its Corporate Board of Directors, enhancing its leadership team as it develops a vertically integrated critical mineral supply chain [1][4] - The company operates a facility in Euclid, Ohio, focused on downstream magnet material and critical metals, and owns the Hoidas Lake Rare Earth Elements Project in Saskatchewan, which has a significant Mineral Resource Estimate of 2,153,000 tons of Total Rare Earth Oxides (TREO) [6][7] Leadership Background - Brad Wall served as the 14th Premier of Saskatchewan from 2007 to 2018, during which he implemented reforms that led to the creation of 60,000 new jobs and reduced the province's operating debt by nearly $1 billion [2][3] - His leadership is characterized by a focus on economic growth, fiscal responsibility, and the establishment of Saskatchewan's first-ever AAA credit rating [2] Strategic Initiatives - REalloys is building a critical mineral supply chain independent from Chinese materials, which is seen as a significant step for North American national security [5] - The company has a Memorandum of Understanding (MOU) with The Saskatchewan Research Council to support its supply chain efforts, indicating a collaborative approach to enhancing its operational capabilities [4]

Company Overview - REalloys Inc. has appointed David MacNaughton, former Canadian Ambassador to the US, to its Corporate Board of Directors, enhancing its leadership team as it builds a vertically integrated rare earth supply chain [1][4] - The company operates a facility in Euclid, Ohio, focusing on downstream magnet material and critical metals, and owns the Hoidas Lake Rare Earth Elements Project in Saskatchewan, Canada, which has a significant Mineral Resource Estimate of 2,153,000 tons of Total Rare Earth Oxides (TREO) [7] Leadership Background - David MacNaughton served as Canada's ambassador from 2016 to 2019 and played a key role in the negotiations for the USMCA, which replaced NAFTA and aimed to create balanced trade opportunities for North American workers and businesses [2][3] - His previous experience includes leadership roles at StrategyCorp, Hill and Knowlton, and Strathshore Financial, where he focused on mergers and acquisitions and public-private partnerships [3] Strategic Initiatives - REalloys is advancing its rare earth supply chain with a fully owned upstream asset at Hoidas Lake and a memorandum of understanding with The Saskatchewan Research Council for midstream services [4] - The company aims to reduce North America's reliance on China for critical minerals, aligning with the current Canadian and US administrations' goals [4][5] Market Position - REalloys is expanding its production capacity in Ohio and is positioned to meet the demand for high-performance magnet materials and critical metals in U.S. Protected Markets [7] - The Hoidas Lake deposit includes both Heavy Rare Earth Elements (HREEs) and Light Rare Earth Elements (LREEs), indicating a diverse resource base that can cater to various market needs [7]

Core Insights - Blackboxstocks Inc. announces the appointment of David MacNaughton to the Corporate Board of Directors of its merger target, REalloys Inc., a vertically integrated critical mineral company [1] Group 1: Appointment and Background - David MacNaughton served as Canada's ambassador to the United States from 2016 to 2019, playing a key role in the negotiations for the USMCA, which replaced NAFTA and aimed to create balanced trade opportunities for North American workers and businesses [2] - MacNaughton has extensive experience in public-private partnerships and has held leadership positions in various organizations, including Palantir Technologies and TC Energy Corporation [3] Group 2: REalloys' Strategic Initiatives - REalloys is focused on building a vertically integrated rare earth supply chain, with significant assets including the Hoidas Lake project in Saskatchewan, which has a Mineral Resource Estimate of 2,153,000 tons of Total Rare Earth Oxides (TREO) [6] - The company is expanding its production capacity at its facility in Euclid, Ohio, and is working on de-risking and advancing its HLREE Project to meet the demand for high-performance magnet materials in U.S. Protected Markets [6] Group 3: MacNaughton's Contribution - MacNaughton will leverage his expertise in public-private partnerships and North American statecraft to help REalloys achieve its goals, particularly in reducing reliance on China for critical minerals [4] - He expressed enthusiasm for joining the first Canada-US critical mineral consortium, emphasizing the importance of strategic collaboration for national security and economic benefits [5]

Company Overview - Blackboxstocks Inc. is a financial technology and social media hybrid platform that provides real-time analytics and news for stock and options traders [14] - The company is pursuing an acquisition of REalloys, Inc., a U.S.-based integrated rare earth company, to enhance stockholder value while continuing its fintech operations through its subsidiary, Blackbox.io Inc. [1][9] Acquisition Details - A definitive merger agreement was executed on March 10, 2025, to acquire REalloys, which specializes in high-performance magnet materials [2] - REalloys is positioned to strengthen the critical supply chain for U.S. national defense and advanced technologies [2] - The Hoidas Lake Rare Earth Deposit in Saskatchewan, Canada, acquired by REalloys, is one of the richest sources of rare earth elements, with a mineral resource totaling 2,153,000 metric tonnes at an average grade of 1.906% [3] Strategic Developments - On April 9, 2025, REalloys acquired 100% of PMT Critical Metals Inc., enhancing its production capabilities and intellectual property [4] - The facility in Euclid, Ohio, produces rare earth metals for key clients, including the U.S. Defense Logistics Agency and the Department of Energy [5] - A joint Memorandum of Understanding was signed with the Saskatchewan Research Council to advance the commercial production of high-performance rare earth magnet materials [6] Production Capacity and Goals - The combined production capacity of the facilities is targeted to reach 500 metric tonnes per year by 2026 and 1,000 metric tonnes by 2028 [7] - The merger is expected to provide access to the lucrative domestic rare earth and magnet materials sector, benefiting stockholders [9][10] Financial and Shareholder Impact - Upon closing of the merger, Blackbox legacy stockholders will own approximately 7.3% of the combined company's shares [12] - Stockholders will receive Contingent Value Rights (CVRs) entitling them to net proceeds from any future sale of Blackbox fintech operations within 24 months following the merger [12]

Core Viewpoint - Blackboxstocks Inc. is pursuing an acquisition of REalloys, Inc. to enhance stockholder value and expand into the rare earth sector, while continuing its fintech operations through a subsidiary [1][8]. Company Developments - The merger agreement to acquire REalloys was executed on March 10, 2025, with the aim of establishing a strong presence in North America's rare earth and high-performance magnet industries [2]. - REalloys has acquired the Hoidas Lake Rare Earth Deposit in Saskatchewan, Canada, which is noted for its high-grade neodymium, praseodymium, dysprosium, and terbium [3]. - The Hoidas Lake Project has a Measured and Indicated Mineral Resource of 2,153,000 metric tonnes of Total Rare Earth Oxides at an average grade of 1.906% [3]. Strategic Acquisitions - On April 9, 2025, REalloys acquired 100% of PMT Critical Metals Inc., enhancing its production capabilities and intellectual property in rare earth magnet materials [4]. - PMT Critical Metals Inc. produces rare earth metals for key clients, including the U.S. Defense Logistics Agency and the U.S. Department of Energy's AMES National Laboratory [5]. Partnerships and Production Goals - REalloys signed a Memorandum of Understanding with the Saskatchewan Research Council to advance the commercial production of high-performance rare earth magnet materials [6]. - The combined production capacity of the facilities is targeted to reach 500 metric tonnes per year by 2026 and 1,000 metric tonnes by 2028 [6]. Transaction Timeline and Expectations - An amended registration statement for the merger was filed with the SEC on July 2, 2025, with expectations for the transaction to close in late August 2025, pending regulatory and stockholder approvals [7][8]. - The merger is anticipated to provide stockholders access to the growing domestic rare earth and magnet materials sector, while legacy fintech operations will continue under Blackbox.io, Inc. [8][9]. Market Positioning - REalloys aims to build a North American high-performance magnet supply chain, targeting sectors such as national defense, nuclear industry, and electric aviation [10]. - The company is strategically positioned to support the increasing demand for rare earth materials in critical industries [10]. Shareholder Impact - Upon closing of the merger, Blackbox legacy stockholders are expected to own approximately 7.3% of the combined company's shares, with potential proceeds from future sales of Blackbox's fintech operations [12].

Core Viewpoint - Blackboxstocks Inc. announces that its merger target REalloys Inc. has signed a joint Memorandum of Understanding with the Saskatchewan Research Council to advance the commercial production of high-performance rare earth magnet materials, aiming for a secure North American supply chain for U.S. Protected Markets [1][5][8] Group 1: Merger and Collaboration - REalloys has initiated a strategic collaboration with the Saskatchewan Research Council to develop a resilient North American rare earth elements supply chain [5][8] - The planned production of high-performance magnet materials at REalloys' facility in Euclid, Ohio, is set to begin in Q2, with an expansion target of 500 metric tonnes per year by 2026 and 1,000 metric tonnes by 2028 [1][10] Group 2: Production Capabilities - REalloys combines its mid-stream production capabilities in heavy rare earth dysprosium-terbium metals with SRC's capabilities in light rare earth neodymium-praseodymium metals to produce high-performance magnet materials in North America [2][10] - The Euclid facility has been servicing U.S. Protected Market clients, including the US Defense Logistic Agency and the Department of Energy, since 1997 [3] Group 3: Resource and Supply Chain - REalloys sources materials from its Hoidas Lake Rare Earth Elements Project, an operating mine, and recycled magnet materials, ensuring strategic redundancy in its supply chain [6][9] - The Hoidas Lake project hosts a significant resource of neodymium, praseodymium, dysprosium, and terbium, which are essential for high-performance magnet production [7][9] Group 4: Industry Positioning - The Saskatchewan Research Council's Rare Earth Processing Facility is North America's first vertically integrated complex for rare earth metals, enhancing Canada's position in ethical and sustainable rare earth element processing [4][8] - The collaboration aims to address the strategic opportunity to integrate midstream processing technology with Saskatchewan's vast rare earth mineral resources [8]

Revenue Performance - For the three months ended March 31, 2025, the company's revenue was $587,078, a decline of 9.6% compared to $649,420 for the same period in 2024, attributed to fewer subscribers and lower revenue per subscriber [107]. - Average subscribers for the three months ended March 31, 2025, were 2,707, down from 2,996 in the prior year, with average monthly revenue per subscriber decreasing from $72.19 to $69.22 [107]. - The company expects significant future revenue growth from its new educational offerings, which are currently contributing to other revenue streams [107]. Financial Losses - The company incurred an operating loss of $887,666 and a net loss of $829,133 for the three months ended March 31, 2025, compared to a loss from operations of $863,711 in the prior year [98][110]. - EBITDA for the three months ended March 31, 2025, was $(675,044), compared to $(740,927) for the same period in 2024, reflecting adjustments for interest expense and financing costs [115]. Cost and Expenses - Gross margins for the three months ended March 31, 2025, were 41.6%, down from 44.9% in the same period of 2024, with cost of revenues at $343,003 compared to $357,958 [108]. - Operating expenses decreased slightly to $1,131,741 for the three months ended March 31, 2025, from $1,155,428 in the prior year, with a significant increase in selling, general, and administrative expenses due to higher professional fees related to the pending merger [109]. Cash and Financing - The company had cash and marketable securities totaling $215,346 as of March 31, 2025, compared to $17,036 at December 31, 2024 [103]. - The company entered into a merger agreement with REalloys, expected to provide $5,000,000 in financing upon completion, with pre-merger stockholders retaining approximately 7.3% of the post-merger common stock [98]. - The company filed a shelf registration statement for the sale of up to $50,000,000 in securities, with no assurance of being able to raise capital on acceptable terms [100].

Core Viewpoint - Blackboxstocks Inc.'s merger target, REalloys Inc., has acquired PMT Critical Metals Inc., enhancing its position in the rare earth magnet production sector, which is crucial for U.S. national defense and industrial applications [2][9]. Company Overview - Blackboxstocks Inc. is a financial technology provider that offers real-time analytics and news for stock and options traders, utilizing predictive technology and artificial intelligence [12]. - REalloys Inc. focuses on the development and production of rare earth elements, with a significant asset in the Hoidas Lake deposit in Saskatchewan, Canada, which contains 2,153,000 metric tonnes of Total Rare Earth Oxides [6][8]. Acquisition Details - REalloys acquired 100% of PMT Critical Metals in a share exchange that represents approximately 14% of REalloys' outstanding common stock, closing the transaction on March 31, 2025 [2]. - The acquisition includes rare earth magnet production equipment, intellectual property, and existing contracts, positioning REalloys as a critical supplier for U.S. Protected Markets [2][7]. Strategic Importance - The facility in Euclid, Ohio, produces rare earth metals and magnet materials for key U.S. government agencies, including the Defense Logistics Agency and the Department of Energy [3][11]. - REalloys aims to secure a reliable North American supply chain for high-performance magnets, which are essential for national defense and various industrial applications [5][10]. Market Context - The acquisition is timely given recent tariffs and export restrictions imposed by China on rare earth elements, highlighting the need for a resilient North American supply chain [5]. - REalloys is targeting sectors such as National Defense Stockpiles, the Defense Industrial Base, and electric aviation, which are increasingly reliant on domestic sources of critical materials [4][10].

Revenue Growth and Financial Performance - The company anticipates significant revenue growth, which is dependent on attracting new subscribers and reducing non-renewals [124]. - The company must increase revenue levels to achieve profitability, focusing on paid subscriptions to its Blackbox System platform [128]. - The company's revenue for the year ended December 31, 2024, was $2,566,946, a decrease of $539,080 or 17.4% compared to $3,106,026 in 2023, primarily due to a decline in subscribers [230]. - The average subscriber count for 2024 was 2,998, which is 12.1% lower than the previous year, and the average monthly revenue per subscriber decreased from $75.88 in 2023 to $72.24 in 2024 [230]. - Gross margin for 2024 was $1,129,663, representing 44.0% of revenues, down from 46.4% in 2023, attributed to lower average revenue per subscriber and poorer fixed cost absorption [230]. - Operating expenses decreased by $2,298,778 or 34.1% from $6,737,505 in 2023 to $4,438,727 in 2024, with significant reductions in software development and advertising expenses [231]. - The company reported a net loss of $3,471,227 for 2024, an improvement from a net loss of $4,664,455 in 2023 [236]. - EBITDA for 2024 was $(2,954,311), compared to $(3,225,199) in 2023, indicating a reduction in operating losses [236]. - Cash flows used in operations totaled $1,095,776 for the year ended December 31, 2024, a significant improvement from negative cash flow of $3,166,067 in the prior year [225]. Mergers and Acquisitions - The Company expects to incur non-recurring costs related to the Merger, including taxes, legal fees, and advisor fees, which may exceed estimates and impact financial condition [164]. - The Merger requires REalloys Inc. to apply for an initial listing on Nasdaq, with minimum equity requirements and a minimum bid price of $4.00 per share [165]. - The number of Blackboxstocks shares to be issued in the Merger may be adjusted based on changes in REalloys share capital prior to Closing [166]. - Completion of the Merger is subject to numerous conditions, and there is no assurance that these conditions will be fulfilled or that the Merger will be completed as planned [168]. - Failure to complete the Merger could adversely affect the market price of the Company's common shares and its financial condition [170]. - The announcement of the Merger may disrupt business relationships and create uncertainty among employees, potentially affecting retention and recruitment [171]. - The Company may face litigation related to the Merger, which could result in substantial costs and delay completion [173]. - The company expects to receive $5,000,000 in financing upon the completion of the merger with REalloys, which is anticipated to enhance its capital position [210]. Competition and Market Challenges - The company faces increasing competition from established firms and new entrants, which may pressure pricing and market share [130]. - The company may face challenges in maintaining its reputation and brand recognition, which are crucial for attracting and retaining customers [132]. - The company may not be able to effectively halt the operations of entities that copy its intellectual property, potentially harming its brand [141]. - The company may not be able to protect its trademarks and trade names adequately, which could hinder its brand recognition and market competitiveness [153]. - The company may face challenges in obtaining necessary licenses for third-party intellectual property, affecting its ability to commercialize new solutions [162]. Intellectual Property and Legal Risks - The company relies on third-party SaaS technologies for critical operations, which poses risks if these services become unavailable [134]. - The company is currently not subject to any material claims from third parties asserting infringement of their intellectual property rights [144]. - The company has invested in protecting its intellectual property through patent filings, although it has not yet obtained any issued patents for its technology or products [148]. - The company relies on trade secrets and confidentiality agreements to protect its proprietary information, but these measures may not be fully effective [158]. - The company may incur significant costs related to legal proceedings concerning intellectual property disputes, which could adversely affect its financial condition [146]. - The company acknowledges that the legal systems in some foreign countries may not favor the enforcement of intellectual property rights, complicating its ability to protect its assets [152]. Corporate Governance and Management - The company is classified as a "controlled company," allowing it to rely on exemptions from certain Nasdaq corporate governance requirements [121]. - The company has a risk management process overseen by the Board, including regular reports on operational, strategic, financial, legal, and regulatory risks [268]. - The Audit Committee is responsible for overseeing risks related to accounting matters and financial reporting [269]. - The Company has adopted a formal Code of Ethics and Business Conduct applicable to all Board members, officers, and employees [280]. - The Company has established an Insider Trading Policy to promote compliance with insider trading laws [271]. - The Company does not currently have a lead independent director, allowing flexibility in leadership structure [267]. Executive Compensation - Gust Kepler, the CEO, received a total compensation of $219,494 in 2024, which includes a salary of $200,000 and a cash bonus of $19,494 [285]. - Robert Winspear, the CFO, has an annual salary of $200,000 and holds a warrant to purchase 25,000 shares at $7.80 per share, exercisable for ten years [286]. - Charles Smith, the CTO, has an annual salary of $180,000 and holds an option to purchase 12,500 shares at $13.68 per share, also exercisable for ten years [287]. - The 2021 Stock Incentive Plan was amended to increase the number of shares available for issuance from 312,500 to 612,500 as of February 6, 2023 [297]. - Non-employee directors receive an annual cash retainer of $30,000 and an option grant of 5,000 shares of common stock [290]. - The company has not entered into any other employment agreements with named executives or directors providing for compensation [289]. Audit and Financial Reporting - The company engaged Victor Mokuolo CPA PLLC as its new independent registered public accounting firm for the audit of the consolidated financial statements for the year ended December 31, 2024 [311]. - Total fees billed by Turner, Stone & Company, L.L.P. for professional services in 2024 amounted to $101,979, an increase of 50.6% from $67,662 in 2023 [313]. - Audit fees for 2024 were $89,299, up from $63,912 in 2023, representing an increase of 39.5% [313]. - Tax fees for 2024 were $5,250, compared to $3,750 in 2023, reflecting a 40% increase [313]. - The Audit Committee pre-approved all auditing services and permitted non-audit services performed by the independent auditor [314]. - Three out of five directors, including Messrs. Keller Reid and Grant Evans and Ms. Dalya Sulaiman, are considered independent directors [310].