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]

Sep 6, 2025 9:33 AM Eastern Daylight TimeBLBX Stock Alert: Halper Sadeh LLC Is Investigating Whether the Merger of Blackboxstocks Inc. Is Fair to ShareholdersShareNEW YORK--(BUSINESS WIRE)--Halper Sadeh LLC, an investor rights law firm, is investigating whether the merger of Blackboxstocks Inc. (NASDAQ: BLBX) and REalloys Inc. is fair to Blackboxstocks shareholders. Upon closing of the proposed transaction, Blackbox shareholders will own approximately 7.3% of the combined company.Halper Sadeh encourages Bla ...

[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)

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].