Core Viewpoint - REalloys, the merger target of Blackboxstocks Inc, has secured a $200 million Letter of Interest from the U.S. Export-Import Bank to support the development of a fully integrated mine-to-magnet supply chain in North America, emphasizing U.S. commitment to critical minerals supply chain independence [1][2][6]. Funding and Support - The $200 million Letter of Interest from EXIM Bank represents preliminary support under the China and Transformational Exports Program (CTEP) for REalloys' project financing [2][5]. - The funding will facilitate the establishment of a vertically integrated rare-earth and ferroalloy supply chain, enhancing U.S. independence from foreign critical mineral sources [3][6]. Strategic Implications - This initiative is expected to boost domestic manufacturing and job creation, particularly in defense, renewable energy, and electric vehicle sectors, while promoting regional economic growth [4][8]. - The project aligns with U.S. government priorities to secure critical-materials supply chains vital for national security and industrial competitiveness [8][9]. Project Details - The EXIM Bank's support indicates potential financing for REalloys' capital expansion, with a provisional repayment term of up to 15 years, and the Letter of Interest remains effective until October 14, 2026 [7][18]. - REalloys is developing a North American supply chain that integrates upstream resource development, midstream processing, and downstream manufacturing of advanced alloys and magnet materials [11][12]. Market Positioning - REalloys aims to create a fully Western-controlled rare-earth ecosystem, supported by long-term offtake agreements and strategic partnerships, positioning itself to meet U.S. market demand for high-performance magnet materials [11][12]. - The merger with Blackboxstocks Inc. is expected to accelerate growth in the North American rare earth market, enhancing the combined company's competitive position [12].

Core Insights - The Export-Import Bank of the United States (EXIM) has issued a $200 million Letter of Interest (LOI) to REalloys Inc., indicating potential support for a critical-minerals project under the China Transformational Exports Program (CTEP) [2][3][4] - This LOI highlights the U.S. government's commitment to establishing a secure, allied mine-to-magnet supply chain for rare-earth materials, aiming to reduce dependence on foreign sources and enhance industrial competitiveness [3][5][6] Company Overview - REalloys Inc. is focused on creating a vertically integrated North American supply chain for rare-earth materials, encompassing upstream resource development, midstream processing, and downstream manufacturing [8][10] - The company is advancing its Hoidas Lake project, which has a significant Mineral Resource Estimate of 2,153,000 tons of Total Rare Earth Oxides (TREO) [9][10] Financial Support and Strategic Importance - EXIM's LOI represents a potential financing opportunity of up to $200 million for REalloys' project capital expansion, with a provisional repayment term of up to 15 years [4][6] - The project aligns with U.S. government priorities to secure critical-materials supply chains essential for defense and advanced technologies, reflecting a broader strategy to enhance national security [5][6][7] Market Position and Future Prospects - REalloys aims to establish a fully Western-controlled rare-earth ecosystem, supported by long-term offtake agreements and strategic partnerships [8][10] - The company is also moving forward with a planned merger with Blackboxstocks Inc., positioning itself for accelerated growth in the North American rare-earth market [10]

Core Insights - Blackboxstocks Inc. announced that its merger target, REAlloys Inc., has signed a Memorandum of Understanding (MOU) with Japan's JOGMEC to enhance the U.S.-Japan rare earth supply chain [1][2] Collaboration Details - The MOU aims to establish a strategic framework for collaboration in rare earth development, technology transfer, and industrial security [1][3] - JOGMEC's collaboration with REAlloys marks its first engagement with a U.S.-based rare earth company, aligning with the U.S. efforts to strengthen supply chain independence from China [2][4] Key Areas of Collaboration - **Technology Transfer and IP Licensing**: JOGMEC will facilitate the transfer of advanced Japanese technologies to REAlloys for the production of high-performance magnets [5] - **Investment and Financing**: The parties will explore investments and financing for REAlloys' North American supply chain, covering upstream mining, midstream separation, and downstream manufacturing [5] - **Offtake and Market Access**: Structured offtake agreements will be developed to ensure stable access to REAlloys' rare earth materials [5] Company Overview - REAlloys Inc. is developing a North American mine-to-magnet supply chain, with significant mineral resources at its Hoidas Lake project, estimated at 2,153,000 tons of Total Rare Earth Oxides [6] - The Hoidas Lake deposit includes a unique combination of Heavy and Light Rare Earth Elements, positioning REAlloys to meet high-performance magnet and alloy demand across various sectors [6] JOGMEC Overview - JOGMEC is a statutory corporation under Japan's METI, focused on securing critical minerals through investment, R&D, and global partnerships [7]

Core Insights - Blackboxstocks Inc. announced that its merger target, REAlloys Inc., has signed a Memorandum of Understanding (MOU) with JOGMEC to collaborate on rare earth development and technology transfer [1][2] Collaboration Details - The MOU marks JOGMEC's first engagement with a U.S.-based rare earth company, aligning with the U.S. efforts to enhance domestic rare earth capacity and reduce reliance on China [2][3] - REAlloys and JOGMEC will work together to develop high-performance rare earth materials and magnets, supporting the U.S.–Japan Alliance [3] Strategic Importance - JOGMEC has a history of developing non-Chinese rare earth supply chains, including significant investments in Australia and France, positioning Japan as a leader in resource security [2][9] - The collaboration aims to combine Japan's technological expertise with North America's industrial capacity to foster resource innovation and supply chain independence from China [4] Key Areas of Collaboration - Technology Transfer: JOGMEC will facilitate the transfer of advanced Japanese technologies to REAlloys for the production of magnets used in defense and semiconductor applications [7] - Investment and Financing: The parties will explore investment opportunities to support REAlloys' North American supply chain, covering mining, separation, and manufacturing [7] - Offtake Agreements: Structured agreements will be developed to ensure stable access to REAlloys' rare earth products for Japanese industries [7] - Resource Allocation: REAlloys will allocate resources from its Hoidas Lake project to Japanese users, complementing commitments to U.S. defense and energy programs [7] Company Overview - REAlloys Inc. is focused on building a North American mine-to-magnet supply chain, with significant mineral resources at Hoidas Lake and plans for midstream processing in collaboration with the Saskatchewan Research Council [6][8] - The Hoidas Lake project has an estimated 2,153,000 tons of Total Rare Earth Oxides (TREO) in the Measured and Indicated categories, featuring both Heavy and Light Rare Earth Elements [6]

Core Insights - REalloys has appointed Stephen S. duMont as non-executive Chairman of the Board, enhancing its leadership to support Western supply chain independence amid competition with China [1][2][3] - The company recently secured a 10-year, 6.75 million ton offtake agreement with Critical Metals Corp, reinforcing its commitment to establishing a secure mine-to-magnet supply chain [2][3] - REalloys aims to build a North American supply chain free from Chinese influence, focusing on critical minerals essential for defense and technological leadership [3][7] Leadership and Strategic Appointments - Stephen S. duMont brings over 30 years of experience in defense and aerospace, having held senior roles at Raytheon Technologies, BAE Systems, and Boeing [2][4][5] - His leadership at GM Defense includes the development of advanced mobility and battery-electric solutions for defense customers [4] - The board includes notable figures such as Ambassador David MacNaughton and former Saskatchewan Premier Brad Wall, enhancing REalloys' strategic positioning in defense and industrial policy [3][5] Supply Chain and Production Capacity - REalloys is developing a vertically integrated mine-to-magnet supply chain, with upstream resources at Hoidas Lake and downstream production in Euclid, Ohio [7] - The Hoidas Lake project has a Mineral Resource Estimate of 2,153,000 tons of Total Rare Earth Oxides, including both Heavy and Light Rare Earth Elements [7] - The company is expanding its Ohio facility's production capacity to meet the growing demand for high-performance magnet materials in U.S. Protected Markets [7] Recent Changes in Leadership - David Argyle has resigned as CEO, with Leonard (Lipi) Sternheim appointed as the new CEO to lead the company's growth and strategic initiatives [6] - Sternheim's leadership is expected to strengthen REalloys' mission to enhance allied industrial capacity and secure critical materials for defense [6]

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) This section details the Form 10-Q filing for Blackboxstocks Inc., a Nevada corporation, for the period ended September 30, 2025 [Filing Details](index=1&type=section&id=Filing%20Details) This document is a Quarterly Report on Form 10-Q for Blackboxstocks Inc., covering the period ended September 30, 2025, identifying the company as a Nevada corporation, non-accelerated filer, smaller reporting company, and emerging growth company - The report is a **Quarterly Report on Form 10-Q** for the period ended September 30, 2025[2](index=2&type=chunk) - Blackboxstocks Inc. is a **Nevada corporation** with Commission File No. 001-41051[2](index=2&type=chunk) Registrant Status | Status | Indication | | :----------------------- | :--------- | | Large accelerated filer | ☐ | | Accelerated filer | ☐ | | Non-accelerated filer | ☒ | | Smaller reporting company| ☒ | | Emerging growth company | ☒ | [Table of Contents](index=3&type=section&id=TABLE%20OF%20CONTENTS) This section provides an overview of the report's structure and content [Introductory Comment](index=4&type=section&id=INTRODUCTORY%20COMMENT) This section provides introductory remarks and context for the financial report [Caution Regarding Forward-Looking Statements](index=4&type=section&id=CAUTION%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section outlines important cautionary statements regarding forward-looking information in the report [PART I – FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%93FINANCIAL%20INFORMATION) This part presents the unaudited condensed consolidated financial statements and management's discussion for the period [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements of Blackboxstocks Inc. for the periods ended September 30, 2025, and December 31, 2024, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with accompanying notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The company's total assets decreased by approximately 10.8% from December 31, 2024, to September 30, 2025, primarily due to a significant reduction in current assets, particularly the note receivable, while total liabilities also decreased and stockholders' equity saw a decline Condensed Consolidated Balance Sheets (Unaudited) | Item | September 30, 2025 | December 31, 2024 | | :---------------------------- | :----------------- | :---------------- | | **Assets** | | | | Cash | $93,186 | $17,036 | | Accounts receivable | $13,675 | $7,217 | | Note receivable | $- | $1,100,000 | | Total current assets | $154,415 | $1,172,597 | | Total assets | $8,818,588 | $9,890,690 | | **Liabilities** | | | | Accounts payable | $1,583,552 | $1,629,803 | | Unearned subscriptions | $515,550 | $928,203 | | Senior secured convertible debenture, net of issuance costs | $1,347,889 | $- | | Convertible note payable | $164,000 | $- | | Merchant cash advance | $- | $187,921 | | Evtec advances payable | $- | $1,293,000 | | Total current liabilities | $3,860,350 | $4,267,710 | | Total liabilities | $4,034,443 | $4,496,495 | | **Stockholders' Equity** | | | | Total stockholders' equity | $4,784,145 | $5,394,195 | - Cash increased significantly from **$17,036** at December 31, 2024, to **$93,186** at September 30, 2025[15](index=15&type=chunk) - A **$1,100,000 note receivable** was eliminated by September 30, 2025, contributing to the decrease in total current assets[15](index=15&type=chunk) - New debt instruments, including a **senior secured convertible debenture ($1,347,889)** and a **convertible note payable ($164,000)**, were recorded by September 30, 2025[15](index=15&type=chunk) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Nine-month revenues decreased by 9.0%, leading to lower gross margin and an increased net loss despite reduced operating expenses Condensed Consolidated Statements of Operations (Unaudited) | Item | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :---------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Subscriptions | $644,316 | $646,792 | $1,725,075 | $1,979,514 | | Other revenues | $52,679 | $1,050 | $77,781 | $2,460 | | Total revenues | $696,995 | $647,842 | $1,802,856 | $1,981,974 | | Cost of revenues | $322,905 | $293,426 | $1,017,467 | $1,007,401 | | Gross margin | $374,090 | $354,416 | $785,389 | $974,573 | | Total operating expenses | $812,980 | $1,088,582 | $3,255,398 | $3,397,622 | | Operating loss | $(438,890) | $(734,166) | $(2,470,009) | $(2,423,049) | | Total other (income) expense | $281,717 | $46,667 | $349,000 | $99,438 | | Net loss | $(720,607) | $(780,833) | $(2,819,009) | $(2,522,487) | | Net loss per share - basic and diluted | $(0.19) | $(0.22) | $(0.77) | $(0.76) | - For the three months ended September 30, 2025, total revenues increased by **7.6% YoY**, while net loss decreased by **7.7% YoY**[18](index=18&type=chunk) - For the nine months ended September 30, 2025, total revenues decreased by **9.0% YoY**, and net loss increased by **11.8% YoY**[18](index=18&type=chunk) - Gross margin for the nine months ended September 30, 2025, was **43.6%**, down from **49.2%** in the prior year period[18](index=18&type=chunk) [Condensed Consolidated Statement of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Stockholders'%20Equity) Stockholders' equity decreased to $4,784,145, reflecting common stock issuances, option exercises, financing costs, and net losses - Total stockholders' equity decreased from **$5,394,195** at December 31, 2024, to **$4,784,145** at September 30, 2025[16](index=16&type=chunk)[21](index=21&type=chunk) - Common stock shares outstanding increased from **3,538,038** at December 31, 2024, to **3,962,093** at September 30, 2025, due to various issuances[15](index=15&type=chunk)[21](index=21&type=chunk) - Additional paid-in capital increased from **$28,343,505** to **$30,552,080** during the nine months ended September 30, 2025[16](index=16&type=chunk)[21](index=21&type=chunk) - Accumulated deficit increased from **$(22,956,118)** to **$(25,775,127)** over the same period, reflecting ongoing net losses[16](index=16&type=chunk)[21](index=21&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2025, the company experienced a significant increase in cash provided by financing activities, primarily from debenture issuances and ATM offerings, which offset the substantial cash used in operating activities, resulting in a net increase in cash Condensed Consolidated Statements of Cash Flows (Unaudited) | Cash Flow Activity | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(2,649,753) | $(681,353) | | Net cash provided by investing activities | $- | $(1,096,697) | | Net cash provided by financing activities | $2,725,903 | $1,366,274 | | Net increase (decrease) in cash | $76,150 | $(411,776) | | Cash - end of period | $93,186 | $60,921 | - Cash used in operating activities significantly increased to **$2,649,753** for the nine months ended September 30, 2025, compared to **$681,353** in the prior year[23](index=23&type=chunk) - Financing activities provided **$2,725,903** in cash in 2025, primarily from stock issuances (**$1,036,670**) and notes payable (**$1,990,000**), a substantial increase from **$1,366,274** in 2024[23](index=23&type=chunk) - The company reported a net increase in cash of **$76,150** for the nine months ended September 30, 2025, contrasting with a net decrease of **$411,776** in the same period of 2024[23](index=23&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide critical context and detail for the condensed consolidated financial statements, covering significant accounting policies, going concern considerations, investment activities, changes in stockholders' equity, incentive plans, related party transactions, debt instruments, and commitments and contingencies, including a significant merger agreement and subsequent events [1. Summary of Significant Accounting Policies](index=12&type=section&id=1.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines the basis of presentation for the financial statements, highlights the company's going concern risk due to recurring losses and negative cash flows, and details ongoing efforts to secure financing and a significant merger agreement with REalloys Inc. to address liquidity concerns - The company incurred an operating loss of **$2,470,009** and a net loss of **$2,819,009** for the nine months ended September 30, 2025, raising substantial doubt about its ability to continue as a going concern[27](index=27&type=chunk) - A Merger Agreement with REalloys Inc. is expected to result in REalloys becoming a wholly-owned subsidiary, with pre-Closing Blackboxstocks stockholders retaining **approximately 7.3%** of the post-Close common stock[28](index=28&type=chunk) - REalloys is expected to raise **$5,000,000** upon completion of the Merger, which is subject to SEC and Nasdaq approvals, and stockholder approval[28](index=28&type=chunk) - The company secured **up to $2,300,000** in financing through a debenture with Five Narrow Lane LP, of which **$2,050,000** was received by September 30, 2025[29](index=29&type=chunk) - An At-The-Market (ATM) Issuance Sales Agreement allows the company to sell **up to $5,795,000** of common stock, with **$1,445,712** raised as of October 15, 2025[30](index=30&type=chunk) Potential Dilutive Securities (September 30, 2025) | Security | Amount/Shares | | :---------------------------- | :------------ | | Series A Convertible Preferred Shares | 3,269,998 |\n| Common shares after conversion| 654,000 |\n| Option shares | 132,625 |\n| Warrant shares | 114,198 |\n| Senior Secured Debentures | $1,440,350 |\n| Shares (conversion rate $5.46)| 263,800 |\n| Convertible note | $164,000 |\n| Shares (conversion rate $5.46)| 30,036 | [2. Investments](index=14&type=section&id=2.%20Investments) The company terminated its Share Exchange Agreement with Evtec Aluminium Limited and subsequently entered into a settlement agreement, resulting in a $93,000 gain - The **Share Exchange Agreement with Evtec Aluminium Limited was terminated** on January 13, 2025[37](index=37&type=chunk) - A settlement agreement with Evtec on August 13, 2025, cancelled a **$1,150,000 note due by Evtec** and a **$1,293,000 advance due by the Company**, in return for a **$100,000 note from Blackbox.io** to Evtec[38](index=38&type=chunk) - The settlement resulted in a **gain of $93,000** for the company[38](index=38&type=chunk) [3. Stockholders' Equity](index=14&type=section&id=3.%20Stockholders'%20Equity) During the nine months ended September 30, 2025, the company issued common stock for consulting services, financing costs, and cashless exercise of options, and raised $1,120,795 in gross proceeds from its At-The-Market (ATM) offering - Issued **30,000 shares of common stock** valued at **$104,300** for consulting services[39](index=39&type=chunk) - Issued **15,000 shares of common stock** valued at **$49,650** for financing costs[39](index=39&type=chunk) - Issued **10,610 shares of common stock** for cashless exercise of options[39](index=39&type=chunk) - Raised gross proceeds of **$1,120,795** from the ATM offering by selling **160,276 shares of common stock** as of September 30, 2025[40](index=40&type=chunk) - Issued a warrant for **33,700 shares** with an exercise price of **$5.46** and a 5-year term, valued at **$233,010**, in connection with the Senior Secured Debenture[42](index=42&type=chunk) [4. Incentive Stock Plan](index=15&type=section&id=4.%20Incentive%20Stock%20Plan) The company granted restricted common stock and options during the period, with fair values calculated using the Cox-Ross-Rubinstein binomial pricing model, and as of September 30, 2025, 132,625 options were outstanding, with most being vested - Granted **46,787 shares of restricted common stock** valued at **$161,430**, vesting in equal amounts quarterly through December 31, 2025[44](index=44&type=chunk) - Granted **10,000 shares of restricted common stock** valued at **$29,000**, which vested at issuance[45](index=45&type=chunk) Options Activity (September 30, 2025) | Item | Number of Shares | Weighted Average Exercise Price | | :---------------------------- | :--------------- | :------------------------------ | | Options as of December 31, 2024 | 144,125 | $9.09 |\n| Issued | 15,000 | $3.46 |\n| Exercised | (26,500) | $3.65 |\n| Options as of September 30, 2025 | 132,625 | $9.54 | - As of September 30, 2025, **128,875 options** were vested, with **3,750 remaining unvested**, for which the company expects to incur **$12,800** in expenses[48](index=48&type=chunk) [5. Related Party Transactions](index=16&type=section&id=5.%20Related%20Party%20Transactions) During the nine months ended September 30, 2025, Mr. Kepler, a related party, advanced $360,000 to the company, and the company repaid $436,209, resulting in no outstanding advances due to him at period end - Mr. Kepler advanced **$360,000** to the company and was repaid **$436,209** during the nine months ended September 30, 2025[49](index=49&type=chunk) - **No advances were due to Mr. Kepler** at September 30, 2025, compared to **approximately $101,000** at December 31, 2024[49](index=49&type=chunk) [6. Debt](index=16&type=section&id=6.%20Debt) This section details the company's debt instruments, including a Senior Secured Debenture with Five Narrow Lane LP, a Convertible Note Payable to Palladium Capital Group, a Note Payable to Evtec, and the full repayment of Merchant Cash Advances - The company entered into a **Senior Secured Debenture with Five Narrow Lane LP (FNL) for up to $2,300,000**, with **$2,050,000** received by September 30, 2025[50](index=50&type=chunk) - FNL converted **$609,650** of the debenture into **111,658 shares of common stock** as of September 30, 2025[50](index=50&type=chunk) - Issuance costs of **approximately $255,000** related to the debenture are being amortized over its life[51](index=51&type=chunk) - A **7% convertible note payable for $164,000** was issued to Palladium Capital Group to settle issuance costs related to the FNL debenture, convertible at **$5.46 per share**[53](index=53&type=chunk)[54](index=54&type=chunk) - A **$100,000 unsecured note payable at 10% interest** was issued to Evtec on August 13, 2025, as part of a settlement agreement[55](index=55&type=chunk) - Merchant cash advances were **fully repaid** as of September 30, 2025, after amendments to weekly payments and the issuance of **15,000 shares of common stock** for the amendments[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) [7. Commitments and Contingencies](index=18&type=section&id=7.%20Commitments%20and%20Contingencies) This section details the ongoing Merger Agreement with REalloys Inc., including amendments related to an at-the-market offering and the definition of 'Permitted Transfer' for CVRs, also mentioning a shelf registration statement for up to $50,000,000 of securities and the absence of material legal proceedings - The Merger Agreement with REalloys Inc. is ongoing, with REalloys expected to become a wholly-owned subsidiary and its stockholders receiving **approximately 92.7%** of the post-Close common and preferred stock[61](index=61&type=chunk) - The First Amendment to the Merger Agreement allows for an at-the-market offering of **up to 250,000 shares** of Blackboxstocks common stock without affecting the merger share calculation[62](index=62&type=chunk) - The Second Amendment revised the definition of 'Permitted Transfer' for Contingent Value Rights (CVRs) to allow for various non-market transfers[64](index=64&type=chunk) - A registration statement on Form S-3 was filed for the sale of **up to $50,000,000** of securities, subject to public float limitations[65](index=65&type=chunk) - **No material legal proceedings are expected** to impact the company's financial position or results of operations[66](index=66&type=chunk) [8. Subsequent Event](index=20&type=section&id=8.%20Subsequent%20Event) Subsequent to September 30, 2025, Five Narrow Lane LP converted an additional $982,800 of the Senior Secured Debenture into 180,000 shares of common stock, bringing the total converted amount to $1,592,450 - 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**[67](index=67&type=chunk) - Total conversions by FNL reached **$1,592,450** out of the **$2,050,000 Additional Debenture**[67](index=67&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, liquidity, and capital resources, detailing the business overview, going concern issues, financing efforts, and analysis of results of operations for the three and nine months ended September 30, 2025, compared to the prior year [Overview](index=21&type=section&id=Overview) Blackboxstocks Inc. provides an AI-enhanced, subscription-based SaaS platform for real-time stock and options trading analytics - Blackboxstocks Inc. provides a **financial technology and social media hybrid platform** with real-time proprietary analytics and news for stock and options traders[69](index=69&type=chunk) - The 'Blackbox System' uses **AI-enhanced predictive technology** to identify volatility and unusual market activity across NYSE, NASDAQ, CBOE, and other options markets[69](index=69&type=chunk) - The company operates on a **subscription-based Software as a Service (SaaS) business model**, serving users in over 40 countries[69](index=69&type=chunk) [Basis of Presentation](index=22&type=section&id=Basis%20of%20Presentation) The company's financial statements are prepared under the assumption of a going concern, despite significant operating and net losses and negative cash flows from operations, as the company pursues a merger with REalloys Inc. and has secured various financing arrangements to address liquidity concerns - The company's ability to continue as a going concern is dependent on obtaining sufficient financing or achieving profitability, given operating losses of **$2,470,009** and net losses of **$2,819,009** for the nine months ended September 30, 2025[73](index=73&type=chunk) - A merger with REalloys Inc. is anticipated, where REalloys stockholders will receive **approximately 92.7%** of the post-merger common and preferred stock, and REalloys is expected to provide **$5,000,000 in financing** upon completion[73](index=73&type=chunk) - The company received **$2,050,000** from a **$2,300,000 convertible debenture** with Five Narrow Lane LP and has raised **$1,445,712** through an At-The-Market (ATM) Issuance Sales Agreement as of October 15, 2025[74](index=74&type=chunk)[76](index=76&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) The company's cash balance increased to $93,186 at September 30, 2025, from $17,036 at December 31, 2024, driven by significant cash provided by financing activities, including proceeds from a debenture and ATM offerings, which offset substantial cash used in operations - Cash balance increased to **$93,186** at September 30, 2025, from **$17,036** at December 31, 2024[79](index=79&type=chunk) - Cash used in operations was **$2,649,753** for the nine months ended September 30, 2025, compared to **$381,353** for the prior year period (excluding Evtec financial support)[79](index=79&type=chunk) - Net cash provided by financing activities was **$2,725,903** for the nine months ended September 30, 2025, primarily from **$2,050,000 from the FNL debenture** and **$1,036,645 from ATM issuances**[81](index=81&type=chunk) - The company expects an additional **$250,000 funding** from FNL upon the SEC declaring the Merger consideration registration statement effective[81](index=81&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Revenue increased 7.6% for three months but decreased 9.0% for nine months, impacting gross margin and operating loss Revenue and Subscriber Metrics (YoY Comparison) | Metric | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Revenues | $696,995 | $647,842 | $1,802,856 | $1,981,874 |\n| Change in Revenue (YoY) | +7.6% | N/A | -9.0% | N/A |\n| Average Subscribers | 2,876 | 2,940 | 2,759 | 2,975 |\n| Average Monthly Revenue per Subscriber | $74.68 | $73.34 | $69.48 | $73.93 | Operating Performance (YoY Comparison) | Metric | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | | :------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Cost of Revenues | $322,905 | $293,426 | $1,017,467 | $1,007,401 |\n| Gross Margin | 53.7% | 54.7% | 43.6% | 49.2% |\n| Total Operating Expenses | $812,980 | $1,088,582 | $3,255,398 | $3,397,622 |\n| Operating Loss | $(438,890) | $(734,166) | $(2,470,009) | $(2,423,049) |\n| Other (income) expense | $281,717 | $46,667 | $349,000 | $99,438 | - The **decrease in gross profit margin** for the nine months was driven by **lower absorption of fixed costs** and **lower average revenue per subscriber** due to promotional offerings[90](index=90&type=chunk) - Advertising and marketing expenses decreased by **47.0%** for the three months and **43.5%** for the nine months, as the company repositioned its marketing strategy with **new pricing tiers**[86](index=86&type=chunk)[91](index=91&type=chunk) [EBITDA (Non-GAAP Financial Measure)](index=26&type=section&id=EBITDA%20(Non-GAAP%20Financial%20Measure)) EBITDA, a non-GAAP measure, shows nine-month operating performance at $(1,933,739), an improvement from the prior year - EBITDA is presented as a **non-GAAP measure** to provide a more meaningful understanding of ongoing operating performance, used for comparison, planning, and performance evaluation[94](index=94&type=chunk) Reconciliation of Net Loss to EBITDA | Item | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | | :---------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net loss | $(720,607) | $(780,833) | $(2,819,009) | $(2,522,487) |\n| Adjustments: | | | | |\n| Interest expense (income) | $55,172 | $58 | $102,318 | $(123) |\n| Amortization of debt issuance costs | $78,016 | $- | $162,974 | $- |\n| Other depreciation and amortization expense | $1,235 | $2,536 | $4,735 | $13,947 |\n| Financing costs | $242,254 | $46,609 | $335,254 | $69,621 |\n| Stock based compensation | $40,355 | $81,737 | $279,989 | $301,069 |\n| Total adjustments | $510,032 | $130,940 | $885,270 | $384,514 |\n| EBITDA | $(210,575) | $(649,893) | $(1,933,739) | $(2,137,973) | [Off Balance Sheet Arrangements](index=27&type=section&id=Off%20Balance%20Sheet%20Arrangements) As of September 30, 2025, the company did not have any material off-balance sheet arrangements - The company had **no material off-balance sheet arrangements** as of September 30, 2025[97](index=97&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a 'smaller reporting company,' Blackboxstocks Inc. is not required to provide quantitative and qualitative disclosures about market risk in this report - The company is **exempt from providing quantitative and qualitative disclosures about market risk** due to its status as a **smaller reporting company**[98](index=98&type=chunk) [Item 4. Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of September 30, 2025, with no material changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=27&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) The principal executive officer and principal financial officer evaluated the effectiveness of the company's disclosure controls and procedures as of September 30, 2025, and concluded they were effective - The principal executive officer and principal financial officer concluded that the company's **disclosure controls and procedures were effective** as of September 30, 2025[99](index=99&type=chunk) [Changes in Internal Control Over Financial Reporting](index=27&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) There were no changes in the company's internal controls over financial reporting during the quarter ended September 30, 2025, that materially affected or are reasonably likely to materially affect them - **No material changes in internal controls over financial reporting occurred** during the quarter ended September 30, 2025[100](index=100&type=chunk) [Limitations on the Effectiveness of Controls](index=27&type=section&id=Limitations%20on%20the%20Effectiveness%20of%20Controls) Management acknowledges that while disclosure controls and procedures provide reasonable assurance, no control system can prevent all human error or circumvention, and their effectiveness is subject to inherent limitations and resource constraints - Management acknowledges that **control systems**, despite being well-designed, can only provide **reasonable, not absolute, assurance** due to inherent limitations like human error, faulty judgment, and potential circumvention[101](index=101&type=chunk) [PART II – OTHER INFORMATION](index=28&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This part covers other information including legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no material legal proceedings - There are **no legal proceedings to report**[103](index=103&type=chunk) [Item 1A. Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) The company refers to the risk factors detailed in its Annual Report on Form 10-K for the year ended December 31, 2024, and subsequent registration statements, noting that additional unknown or immaterial risks may also arise - **Important risk factors are described** in the company's **Annual Report on Form 10-K** for the year ended December 31, 2024, and supplemented by various registration statements[104](index=104&type=chunk) - The company acknowledges that **additional unknown or currently immaterial risks** may adversely affect its business or results of operations[104](index=104&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - There were **no unregistered sales of equity securities or use of proceeds to report**[105](index=105&type=chunk) [Item 3. Defaults Upon Senior Securities](index=29&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - There were **no defaults upon senior securities to report**[106](index=106&type=chunk) [Item 4. Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - **Mine Safety Disclosures are not applicable** to the company[107](index=107&type=chunk) [Item 5. Other Information](index=29&type=section&id=Item%205.%20Other%20Information) Gust Kepler, the company's CEO, entered into a Rule 10b5-1 trading arrangement on September 15, 2025, for the potential sale of up to 250,000 shares of common stock, with sales permitted starting 91 days after the adoption date or later, and the arrangement expiring on September 15, 2026 - Gust Kepler, CEO, entered into a **Rule 10b5-1 trading arrangement** on September 15, 2025[108](index=108&type=chunk) - The arrangement allows for the potential sale of **up to 250,000 shares** of the company's common stock[108](index=108&type=chunk) - Sales under the arrangement are permitted starting the later of **91 days** after adoption or the third business day following disclosure of financial results for the completed fiscal quarter, and the arrangement expires on **September 15, 2026**[108](index=108&type=chunk) [Item 6. Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including various corporate documents, amendments to the merger agreement, and the At-The-Market Issuance Sales Agreement - Exhibits include **Articles of Incorporation**, **Certificates of Designation for Preferred Stock**, **Amended and Restated Bylaws**, and **Description of Securities**[109](index=109&type=chunk) - Recent exhibits include the **First and Second Amendments to the Agreement and Plan of Merger**, and the **At-The-Market Issuance Sales Agreement** with Alexander Capital, L.P[111](index=111&type=chunk) [SIGNATURES](index=30&type=section&id=SIGNATURES) This section contains the required signatures for the Form 10-Q filing [EXHIBIT INDEX](index=31&type=section&id=EXHIBIT%20INDEX) This section provides a comprehensive list of all exhibits filed with the Form 10-Q

Core Insights - REalloys has entered into a 10-year offtake agreement with Critical Metals Corp. for 15% of the projected rare earth concentrate production from the Tanbreez Project in Greenland, which is one of the world's largest deposits of heavy rare earth elements [2][3][4] - This agreement is a strategic milestone for REalloys, supporting its expansion as a vertically integrated producer of alloys and magnet materials in North America [3][4] - The partnership aligns with U.S. and allied priorities to establish a fully independent North American mine-to-magnet supply chain, reducing dependency on Chinese rare earth sources [3][6] REalloys Overview - REalloys operates a downstream metallization facility in Euclid, Ohio, producing advanced rare earth metals and magnet materials for various U.S. government programs [5] - The company is building a North American supply chain that includes upstream resources at Hoidas Lake and midstream processing development through collaboration with the Saskatchewan Research Council [6] - REalloys is expanding its Ohio facility's production capacity and advancing its HLREE Project to meet the demand for high-performance magnet materials in U.S. Protected Markets [6] Critical Metals Corp. Overview - Critical Metals Corp. is focused on developing critical metals and minerals, with its flagship Tanbreez Project located in Southern Greenland, expected to have year-round shipping access [7][9] - The Tanbreez Project is projected to supply approximately 6.75 million metric tons of concentrate over the 10-year term of the agreement with REalloys [4] - The company aims to become a reliable supplier of critical minerals essential for defense applications and the clean energy transition [9]

Core Insights - REalloys Inc. has signed a Memorandum of Understanding (MOU) with St George Mining Limited to collaborate on the commercialization of rare earth minerals from the Araxá Project in Brazil, reinforcing its position in the U.S. rare earth supply chain [1][2][4] - The alliance includes a long-term offtake agreement that secures REalloys access to up to 40% of Araxá's rare earth production, enhancing its role in the U.S. defense and industrial magnet materials supply chain [2][4] - The Araxá Project is noted for being the largest and highest-grade carbonatite-hosted rare earths deposit in South America, with a resource of 40.6 million tons at 4.13% Total Rare Earth Oxides (TREO) [6] Company Overview - REalloys operates a downstream magnet material and critical metals manufacturing facility in Euclid, Ohio, 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 [5] - The Hoidas Lake deposit includes both Heavy Rare Earth Elements (HREEs) and Light Rare Earth Elements (LREEs), positioning REalloys to meet the growing demand for high-performance magnet materials in the U.S. [5][7] - The company is expanding its Ohio facility's production capacity while de-risking and advancing its HLREE Project to meet U.S. Protected Markets' demand [7] Strategic Importance - The alliance with St George Mining is seen as a pivotal moment for REalloys as the U.S. government intensifies efforts to secure non-China rare earth supply chains, positioning REalloys as a critical contributor to national defense and energy security [4][6] - REalloys has existing contracts with the Defense Logistics Agency and other federal agencies to develop and manufacture high-purity rare earth metals and magnets for defense and commercial applications [6] - The collaboration aims to optimize processing flowsheets to deliver products tailored for U.S. protected markets, leveraging REalloys' advanced metallization and alloying technologies [6]

Core Viewpoint - Halper Sadeh LLC is investigating the fairness of the merger between Blackboxstocks Inc. and REalloys Inc. for Blackboxstocks shareholders, who will own approximately 7.3% of the combined company upon closing [1]. Group 1: Investigation Details - The investigation focuses on whether Blackboxstocks and its board violated federal securities laws or breached fiduciary duties by not obtaining the best possible consideration for shareholders and failing to disclose all material information necessary for assessing the merger [3]. - Halper Sadeh LLC may seek increased consideration for shareholders, additional disclosures, and other relief related to the proposed transaction [4]. Group 2: Legal Representation - Halper Sadeh LLC represents investors globally who have experienced securities fraud and corporate misconduct, having recovered millions for defrauded investors [5].

[Introductory Comment](index=4&type=section&id=INTRODUCTORY%20COMMENT) This section defines the terms and references used throughout the report, specifically identifying Blackboxstocks Inc - The terms "we," "us," "our," "Blackboxstocks," or the "Company" refer to Blackboxstocks Inc., a Nevada corporation[8](index=8&type=chunk) [Caution Regarding Forward-Looking Statements](index=4&type=section&id=CAUTION%20REGARDING%20FORWARD%20LOOKING%20STATEMENTS) This section warns about inherent uncertainties and risks in forward-looking statements, noting actual results may differ - This report contains forward-looking statements that involve substantial uncertainties and risks, and actual results may differ materially from those included within these statements[9](index=9&type=chunk) - Readers are cautioned not to place undue reliance on these statements, and the Company undertakes no obligation to publicly release revisions to reflect future events or unanticipated occurrences[9](index=9&type=chunk) - Estimates and plans related to the Company and its industry are based on assumptions that may not be accurate, and there is no assurance that business growth estimates will be achieved[10](index=10&type=chunk) [Part I – Financial Information](index=5&type=section&id=PART%20I%20%E2%80%93FINANCIAL%20INFORMATION) This part presents unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Condensed Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents Blackboxstocks Inc.'s unaudited condensed consolidated financial statements for interim reporting [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20and%20December%2031%2C%202024%20%28Unaudited%29) The balance sheets show a slight decrease in total assets and a significant increase in current liabilities, primarily driven by new debt, while stockholders' equity declined due to accumulated deficits | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :-------------------------------- | :-------------- | :---------------- | | Total Assets | $9,880,892 | $9,890,690 | | Current Assets | $1,198,689 | $1,172,597 | | Cash | $38,164 | $17,036 | | Accounts Receivable | $155 | $7,217 | | Total Current Liabilities | $6,103,035 | $4,267,710 | | Senior Secured Debenture, net | $1,879,523 | $- | | Convertible Note | $164,000 | $- | | Total Stockholders' Equity | $3,585,077 | $5,394,195 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024%20%28Unaudited%29) The statements of operations reveal a decline in total revenues and gross margins for both the three and six months ended June 30, 2025, compared to the prior year, leading to increased operating and net losses | Metric | 3 Months Ended June 30, 2025 ($) | 3 Months Ended June 30, 2024 ($) | 6 Months Ended June 30, 2025 ($) | 6 Months Ended June 30, 2024 ($) | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total Revenues | $518,783 | $684,712 | $1,105,861 | $1,334,132 | | Gross Margin | $167,224 (32.2%) | $328,695 (48.0%) | $411,299 (37.2%) | $620,157 (46.5%) | | Operating Loss | $(1,143,453) | $(824,917) | $(2,031,119) | $(1,688,883) | | Net Loss | $(1,269,269) | $(877,943) | $(2,098,402) | $(1,741,654) | | Net Loss Per Share (Basic & Diluted) | $(0.35) | $(0.27) | $(0.58) | $(0.54) | - Revenue declined by **24.2%** for the three months and **17.1%** for the six months ended June 30, 2025, primarily due to fewer subscribers and lower average revenue per subscriber from promotional offerings[77](index=77&type=chunk)[82](index=82&type=chunk) - Gross margin decreased from **48.0% to 32.2%** for the three months and from **46.5% to 37.2%** for the six months, driven by lower absorption of fixed costs and reduced average revenue per subscriber[78](index=78&type=chunk)[83](index=83&type=chunk) [Condensed Consolidated Statement of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Stockholders%27%20Equity%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024%20%28Unaudited%29) The statement of stockholders' equity shows a decrease in total equity, primarily due to accumulated net losses, partially offset by increases in additional paid-in capital from stock-based compensation and financing-related share issuances | Metric | December 31, 2024 ($) | June 30, 2025 ($) | | :-------------------------------- | :---------------- | :-------------- | | Total Stockholders' Equity | $5,394,195 | $3,585,077 | | Accumulated Deficit | $(22,956,118) | $(25,054,520) | | Additional Paid in Capital | $28,343,505 | $28,632,680 | | Common Stock Shares Outstanding | 3,538,038 | 3,647,474 | - The accumulated deficit increased by **$2,098,402** for the six months ended June 30, 2025, reflecting the net loss incurred during the period[18](index=18&type=chunk)[20](index=20&type=chunk) - Additional paid-in capital increased by **$289,175**, primarily due to stock-based compensation (**$239,634**) and shares issued for financing costs (**$49,650**)[20](index=20&type=chunk)[38](index=38&type=chunk)[41](index=41&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024%20%28Unaudited%29) Cash flows from operating activities significantly increased usage, while financing activities provided substantial cash, primarily from new debt, resulting in a net increase in cash for the period, though lower than the prior year | Cash Flow Activity | 6 Months Ended June 30, 2025 ($) | 6 Months Ended June 30, 2024 ($) | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net Cash Used in Operating Activities | $(1,693,863) | $(687,198) | | Net Cash Provided by Investing Activities | $0 | $3,303 | | Net Cash Provided by Financing Activities | $1,714,991 | $1,266,680 | | Net Increase in Cash | $21,128 | $582,785 | | Cash - End of Period | $38,164 | $1,055,482 | - The increase in cash used in operating activities in 2025 was partly due to the absence of **$875,000** in financial support from Evtec Aluminium Limited received in the prior year[71](index=71&type=chunk) - Net cash provided by financing activities in 2025 was primarily driven by **$2,050,000** in proceeds from the issuance of a debenture to Five Narrow Lane LP, partially offset by issuance costs and merchant cash advance payments[73](index=73&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide critical context and detailed explanations for the financial statements, covering accounting policies, the company's going concern status, significant merger and financing activities, equity changes, debt instruments, and subsequent events [1. Summary of Significant Accounting Policies](index=10&type=section&id=1.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines the basis of presentation for the interim financial statements, highlights the company's going concern risk due to recurring losses, and details ongoing strategic initiatives like the REalloys merger and various financing efforts to secure capital - The Company's ability to continue as a going concern is in substantial doubt due to operating losses of **$2,031,119** and net losses of **$2,098,402** for the six months ended June 30, 2025, and significant cash used in operations[25](index=25&type=chunk) - A Merger Agreement with REalloys Inc. was entered on March 10, 2025, where REalloys is expected to become a wholly-owned subsidiary, with pre-Closing Blackboxstocks stockholders retaining approximately **7.3%** of the post-Close common stock[26](index=26&type=chunk) - The Company secured **$2,050,000** from a **$2,300,000** debenture financing with Five Narrow Lane LP and filed a shelf registration statement for up to **$50,000,000** in securities, alongside an At-The-Market (ATM) sales agreement for up to **$5,795,000**[27](index=27&type=chunk)[28](index=28&type=chunk) Potential Dilutive Securities Outstanding (June 30, 2025) | Security Type | Amount/Shares | Equivalent Common Shares | | :-------------------------------- | :-------------- | :----------------------- | | Series A Convertible Preferred Shares | 3,269,998 | 654,000 | | Option shares | 137,625 | 137,625 | | Warrant shares | 88,510 | 88,510 | | Senior Secured Debentures | $2,050,000 | 375,458 | | Convertible note | $164,000 | 29,304 | [2. Investments](index=12&type=section&id=2.%20Investments) This section details the termination of the Share Exchange Agreement with Evtec Aluminium Limited and the subsequent settlement of outstanding financial obligations between the parties - The Share Exchange Agreement with Evtec Aluminium Limited was mutually terminated on January 13, 2025[35](index=35&type=chunk) - On August 13, 2025, a settlement agreement was reached with Evtec to cancel a **$1,150,000** note due by Evtec and a **$1,293,000** advance due by the Company, in exchange for a **$100,000** note from Blackbox.io to Evtec due June 2026[36](index=36&type=chunk)[59](index=59&type=chunk) [3. Stockholders' Equity](index=12&type=section&id=3.%20Stockholders%27%20Equity) This section outlines the common stock issuances during the six months ended June 30, 2025, for various purposes including consulting services, financing costs, and cashless option exercises - During the six months ended June 30, 2025, the Company issued **30,000 shares** of common stock valued at **$104,300** for consulting services[37](index=37&type=chunk) - An additional **15,000 shares** of common stock, valued at **$49,650**, were issued for financing costs[38](index=38&type=chunk) - The Company also issued **7,649 shares** of common stock for the cashless exercise of options[39](index=39&type=chunk) [4. Incentive Stock Plan](index=12&type=section&id=4.%20Incentive%20Stock%20Plan) This section details the valuation methodology for stock options, grants of restricted common stock, and the activity and status of outstanding options as of June 30, 2025 - The fair value of options granted was calculated using the Cox-Ross-Rubinstein binomial pricing model, with inputs including a risk-free interest rate of **4.43%** and expected volatility of **153%**[40](index=40&type=chunk) - **46,787 shares** of restricted common stock valued at **$161,430** were granted, vesting equally over four quarters in 2025, and **10,000 shares** valued at **$29,000** vested at issuance[41](index=41&type=chunk)[42](index=42&type=chunk) Options Activity as of June 30, 2025 | Activity | Number of Shares | Weighted Average Exercise Price ($) | | :-------------------------------- | :--------------- | :------------------------------ | | Options as of December 31, 2024 | 144,125 | $9.09 | | Issued | 15,000 | $3.46 | | Exercised | (21,500) | $3.65 | | Options as of June 30, 2025 | 137,625 | $9.33 | | Vested Options (June 30, 2025) | 138,875 | - | | Unvested Options (June 30, 2025) | 7,500 | - | [5. Related Party Transactions](index=14&type=section&id=5.%20Related%20Party%20Transactions) This section details the financial transactions with Mr. Kepler, a related party, including advances received and repayments made, and the outstanding balance at the end of the period - During the six months ended June 30, 2025, Mr. Kepler advanced the Company **$360,000**, and the Company repaid Mr. Kepler **$436,209**[45](index=45&type=chunk) - Advances due to Mr. Kepler decreased from approximately **$101,000** at December 31, 2024, to **$25,000** at June 30, 2025[45](index=45&type=chunk) [6. Debt](index=14&type=section&id=6.%20Debt) This section provides details on the Senior Secured Debenture, a Convertible Note Payable, and amendments to Merchant Cash Advances, outlining their terms, financing, and repayment structures - The Company entered into a Securities Purchase Agreement with Five Narrow Lane LP (FNL) for a Senior Secured Debenture, providing up to **$2,300,000** in financing, of which **$2,050,000** was received by June 30, 2025[46](index=46&type=chunk) - The Senior Secured Debenture matures on the earlier of January 17, 2026, or the completion of the Merger with REalloys, and incurred approximately **$255,000** in issuance costs[47](index=47&type=chunk)[48](index=48&type=chunk) - A **$164,000 7%** convertible note payable was issued to Palladium Capital Group to settle placement agent issuance costs, convertible at **$5.46** per common stock share[49](index=49&type=chunk) - Merchant cash advances were amended in February 2025 to reduce weekly payments, and **15,000 shares** valued at **$49,650** were issued as consideration for these amendments, with an unpaid balance of **$15,338** at June 30, 2025[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) [7. Commitments and Contingencies](index=15&type=section&id=7.%20Commitments%20and%20Contingencies) This section details the significant Merger Agreement with REalloys Inc., outlining the terms, ownership structure post-merger, and conditions for closing, as well as the Company's shelf registration statement for future securities offerings - The Merger Agreement with REalloys Inc. (March 10, 2025) stipulates that REalloys will merge into a wholly-owned subsidiary, with pre-Closing Blackboxstocks stockholders retaining approximately **7.3%** and REalloys holders receiving approximately **92.7%** of the post-Close common and preferred stock[54](index=54&type=chunk) - The merger is subject to customary closing conditions, including SEC declaration of the registration statement's effectiveness, Nasdaq listing approval for REalloys, and stockholder approval, and will be accounted for as a reverse merger with REalloys as the accounting acquiror[54](index=54&type=chunk) - A registration statement on Form S-3 was filed on January 31, 2025, for the sale of up to **$50,000,000** of securities, subject to limitations based on the Company's public float[55](index=55&type=chunk) [8. Subsequent Events](index=15&type=section&id=8.%20Subsequent%20Events) This section reports on key events that occurred after June 30, 2025, including an amendment to the Merger Agreement, the initiation of an At-The-Market (ATM) offering, and a settlement agreement with Evtec - On July 1, 2025, a First Amendment to the Merger Agreement allowed Blackboxstocks to conduct an At-The-Market (ATM) offering of up to **250,000 shares** without impacting the calculation of Company Merger Shares[56](index=56&type=chunk)[58](index=58&type=chunk) - An ATM Issuance Sales Agreement was entered on July 1, 2025, with Alexander Capital, L.P. for up to **$5,795,000** in common stock sales; as of August 12, 2025, **$618,829** gross proceeds were raised from **85,000 shares**[58](index=58&type=chunk) - On August 13, 2025, the Company and Evtec entered a settlement agreement to cancel a **$1,150,000** note due by Evtec and a **$1,293,000** advance due by the Company, in exchange for a **$100,000** note from Blackbox.io to Evtec[59](index=59&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Blackboxstocks Inc.'s financial performance and condition, including an overview of its business, assessment of liquidity and capital resources, and a detailed analysis of the results of operations for the three and six months ended June 30, 2025, compared to the prior year [Overview](index=17&type=section&id=Overview) Blackboxstocks Inc. operates a financial technology and social media hybrid platform, the 'Blackbox System,' which provides real-time analytics and news for stock and options traders using AI-enhanced predictive technology. The company employs a subscription-based SaaS model and serves users globally - Blackboxstocks Inc. is a financial technology and social media hybrid platform offering real-time proprietary analytics and news for stock and options traders[61](index=61&type=chunk) - The 'Blackbox System' uses AI-enhanced predictive technology to identify volatility and unusual market activity across major exchanges (NYSE, NASDAQ, CBOE) and options markets[61](index=61&type=chunk) - The platform includes an interactive social media dashboard with live audio/video features, real-time alerts, scanners, financial news, and institutional-grade charting, operating on a subscription-based Software as a Service (SaaS) model with users in over **40 countries**[61](index=61&type=chunk)[62](index=62&type=chunk) [Basis of Presentation](index=18&type=section&id=Basis%20of%20Presentation) This section reiterates the company's going concern risk due to persistent operating and net losses, outlining the strategic merger with REalloys and various capital-raising initiatives as crucial steps to secure sufficient financing and ensure continued operations - The Company's ability to continue as a going concern is in substantial doubt due to operating losses of **$2,032,119** and net losses of **$2,098,402** for the six months ended June 30, 2025, and cash flows used in operations of **$1,693,863**[65](index=65&type=chunk) - The Merger Agreement with REalloys Inc. is expected to provide **$5,000,000** upon completion, with pre-Closing Blackboxstocks stockholders retaining approximately **7.3%** of the post-Close common stock[65](index=65&type=chunk) - Ongoing financing efforts include **$2,050,000** received from a convertible debenture with FNL (with an additional **$250,000** expected), a shelf registration for up to **$50,000,000** in securities, and an At-The-Market (ATM) agreement that has raised **$618,829** as of August 12, 2025[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk) [Significant Accounting Policies](index=18&type=section&id=Significant%20Accounting%20Policies) This section confirms that there have been no changes to the significant accounting policies previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no changes from the Summary of Significant Accounting Policies described in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[70](index=70&type=chunk) [Liquidity and Capital Resources](index=18&type=section&id=Liquidity%20and%20Capital%20Resources) The Company's liquidity remains challenged by significant cash usage in operations, necessitating reliance on financing activities, including new debentures, shelf registrations, and an ATM offering, with the REalloys merger being a key component of future capital strategy Cash Position and Cash Flows (6 Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | | :-------------------------------- | :----------- | :----------- | | Cash at Period End | $38,164 | $1,055,482 | | Net Cash Used in Operating Activities | $(1,693,863) | $(687,198) | | Net Cash Provided by Financing Activities | $1,714,991 | $1,266,680 | - The increase in cash used in operating activities in 2025 was partly due to the absence of **$875,000** in financial support from Evtec Aluminium Limited received in 2024[71](index=71&type=chunk) - Financing activities in 2025 were primarily driven by **$2,050,000** from the FNL debenture, with an additional **$250,000** expected, and the ATM Agreement has raised **$618,829** as of August 12, 2025, for future operations[73](index=73&type=chunk)[74](index=74&type=chunk) - There is no assurance that the planned Merger with REalloys will be completed or provide sufficient liquidity, and the Company may need to raise additional debt or equity capital on acceptable terms[76](index=76&type=chunk) [Results of Operations](index=20&type=section&id=Results%20of%20Operations) This section analyzes the Company's financial performance, detailing the decline in revenue and gross margins, and the increase in operating expenses, which collectively led to a higher operating loss for both the three and six months ended June 30, 2025, compared to the previous year [Comparison of Three Months Ended June 30, 2025 and 2024](index=20&type=section&id=Comparison%20of%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) For the three months ended June 30, 2025, revenue decreased by 24.2% due to fewer subscribers and lower average revenue per subscriber, leading to a reduced gross margin and an increased operating loss, primarily from higher professional fees and stock-based compensation Key Financials (3 Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (%) | | :-------------------------------- | :----------- | :----------- | :--------- | | Revenue | $518,783 | $684,712 | -24.2% | | Average Subscribers | 2,707 | 2,996 | -9.7% | | Average Monthly Revenue per Subscriber | $63.88 | $76.11 | -16.1% | | Gross Margin | 32.2% | 48.0% | -15.8 pp | | Operating Expenses | $1,310,677 | $1,153,612 | +13.7% | | Operating Loss | $(1,143,453) | $(824,917) | +38.6% | - Selling, general and administrative expenses increased by **$192,001**, driven by **$96,916** in higher professional fees related to the REalloys Merger and **$79,301** in higher stock-based compensation[79](index=79&type=chunk) - Advertising and marketing expenses decreased by **32.0%** to **$75,906** as the Company repositions its marketing strategy[79](index=79&type=chunk) [Comparison of Six Months Ended June 30, 2025 and 2024](index=20&type=section&id=Comparison%20of%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) For the six months ended June 30, 2025, revenue decreased by 17.1% due to fewer subscribers and lower average revenue per subscriber, resulting in a lower gross margin and a $342,236 increase in operating loss, primarily from higher professional fees related to the REalloys Merger Key Financials (6 Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change (%) | | :-------------------------------- | :----------- | :----------- | :--------- | | Revenue | $1,105,861 | $1,334,132 | -17.1% | | Average Subscribers | 2,709 | 2,989 | -9.4% | | Average Monthly Revenue per Subscriber | $66.50 | $74.31 | -10.5% | | Gross Margin | 37.2% | 46.5% | -9.3 pp | | Operating Expenses | $2,442,418 | $2,309,040 | +5.87% | | Operating Loss | $(2,031,119) | $(1,688,883) | +20.3% | - Selling, general and administrative expenses increased by **$244,593**, primarily due to **$217,372** in higher professional fees associated with the pending Merger with REalloys[84](index=84&type=chunk) - Advertising and marketing expenses decreased by **42.2%** to **$141,235** as the Company continues to reposition its marketing strategy[84](index=84&type=chunk) [EBITDA (Non-GAAP Financial Measure)](index=22&type=section&id=EBITDA%20%28Non-GAAP%20Financial%20Measure%29) This section defines EBITDA as a non-GAAP financial measure used by management to evaluate operating performance and provides a reconciliation from net loss, emphasizing that it should not be considered in isolation from GAAP measures - EBITDA is defined as net income (loss) before interest expense, income tax, depreciation and amortization expense, and certain non-cash items, used by management for performance comparison, planning, and evaluation[88](index=88&type=chunk) Reconciliation of Net Loss to EBITDA (6 Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | | :-------------------------------- | :-------------- | :-------------- | | Net loss | $(2,098,402) | $(1,741,654) | | Adjustments: | | | | Interest expense (income) | $47,146 | $(181) | | Amortization of debt issuance costs | $84,958 | $- | | Other depreciation and amortization expense | $3,500 | $11,411 | | Financing costs | $92,725 | $23,012 | | Stock based compensation | $239,634 | $219,332 | | **Total adjustments** | **$467,963** | **$253,574** | | **EBITDA** | **$(1,630,439)** | **$(1,488,080)** | [Off Balance Sheet Arrangements](index=23&type=section&id=Off%20Balance%20Sheet%20Arrangements) This section states that as of June 30, 2025, the Company did not have any material off-balance sheet arrangements - As of June 30, 2025, the Company did not have any material off-balance sheet arrangements[90](index=90&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Blackboxstocks Inc. is exempt from providing the detailed quantitative and qualitative disclosures about market risk typically required under this Item - The Company is a "smaller reporting company" and is not required to provide information on quantitative and qualitative disclosures about market risk[91](index=91&type=chunk) [Item 4. Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) This section reports that the Company's disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025, with no material changes to internal control over financial reporting. It also acknowledges the inherent limitations of any control system - The Company's principal executive and financial officers concluded that disclosure controls and procedures were **effective** as of June 30, 2025[92](index=92&type=chunk) - There were **no material changes** in internal controls over financial reporting during the quarter ended June 30, 2025[93](index=93&type=chunk) - Control systems, despite being well-designed, provide only reasonable assurance and are subject to inherent limitations such as human error, resource constraints, and potential circumvention[94](index=94&type=chunk) [Part II – Other Information](index=24&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This part covers non-financial disclosures, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=24&type=section&id=Item%201.%20Legal%20Proceedings) This section states that there are no legal proceedings to report for the Company - There are **no legal proceedings** to report[96](index=96&type=chunk) [Item 1A. Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to the comprehensive risk factors detailed in the Company's Annual Report on Form 10-K and subsequent registration statements, acknowledging that additional unforeseen risks may also impact the business - Important risk factors are described in Part I, Item 1A, "Risk Factors" of the Annual Report on Form 10-K filed on March 21, 2025, and supplemented by registration statements on Form S-4 and S-3[97](index=97&type=chunk) - The Company acknowledges that additional risks and uncertainties, currently unknown or believed to be immaterial, may become significant factors adversely affecting its business or results of operations[97](index=97&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=24&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on specific instances of unregistered sales of equity securities, including common stock issued for consulting services and a senior convertible debenture issued to a placement agent, all conducted under exemptions from SEC registration requirements - The Company issued **10,000 shares** of Common Stock to Eadwacer Holdings LLC for consulting services related to the REalloys Merger on April 3 and April 26, 2025, under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D[98](index=98&type=chunk) - A Senior Convertible Debenture of up to **$184,000** was issued to Palladium Capital Group, LLC on April 30, 2025, to settle placement agent fees, convertible into Common Stock at a price of **175%** of the closing price (minimum **$5.00** per share)[99](index=99&type=chunk) - The Placement Agent Debenture was also issued pursuant to an exemption from registration requirements under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D[99](index=99&type=chunk) [Item 3. Defaults Upon Senior Securities](index=25&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there are no defaults upon senior securities to report for the Company - There are **no defaults** upon senior securities[100](index=100&type=chunk) [Item 4. Mine Safety Disclosures](index=25&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that the disclosure requirements for mine safety are not applicable to the Company - Mine Safety Disclosures are **not applicable** to the Company[101](index=101&type=chunk) [Item 5. Other Information](index=25&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report under this item - There is **no other information** to report[102](index=102&type=chunk) [Item 6. Exhibits](index=25&type=section&id=Item%206.%20Exhibits) This section provides a comprehensive list of exhibits filed with the Quarterly Report on Form 10-Q, including foundational corporate documents, various agreements related to financing and the REalloys merger, and required certifications - Exhibits include Articles of Incorporation, Certificates of Designation for Preferred Stock, Amended and Restated Bylaws, and a Description of Securities[104](index=104&type=chunk) - Key agreements filed as exhibits include the Termination Agreement with Evtec, Securities Purchase Agreements and Debentures with Five Narrow Lane LP, and the Agreement and Plan of Merger with REalloys Inc., along with related support and security agreements[104](index=104&type=chunk)[106](index=106&type=chunk) - The report also includes certifications from the Principal Executive Officer and Principal Financial Officer as required by Rule 13a-14a/Rule 14d-14(a) and 18 U.S.C. Section 1350, as well as Inline Interactive Data Files[106](index=106&type=chunk)[111](index=111&type=chunk) [Signatures](index=27&type=section&id=SIGNATURES) This section confirms the official signing of the report by the Company's principal executive and financial officers - The report was duly signed on **August 14, 2025**, by Gust Kepler, President, Chief Executive Officer and Secretary, and Robert Winspear, Chief Financial Officer and Secretary[109](index=109&type=chunk)