Blackboxstocks(BLBX) - 2022 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Financial Statements This section presents Blackboxstocks Inc.'s unaudited financial statements as of June 30, 2022, detailing asset, liability, equity, operations, and cash flow changes Balance Sheets Total assets decreased to $7.65 million from $11.15 million at year-end 2021, primarily due to reduced cash and marketable securities Balance Sheet Summary (Unaudited) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Total Current Assets | $7,209,621 | $10,701,971 | | Cash | $335,106 | $2,426,497 | | Marketable Securities | $6,734,720 | $8,015,882 | | Total Assets | $7,647,221 | $11,150,114 | | Total Current Liabilities | $2,731,496 | $2,928,676 | | Total Liabilities | $3,085,550 | $3,332,664 | | Total Stockholders' Equity | $4,561,671 | $7,817,450 | Statements of Operations Revenue slightly decreased for Q2 2022, while operating expenses significantly increased, resulting in a $1.32 million net loss for the quarter and a $2.56 million net loss for the six-month period Three Months Ended June 30 (Unaudited) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Total Revenues | $1,399,315 | $1,463,606 | | Gross Margin | $899,888 | $1,054,029 | | Total Operating Expenses | $2,068,654 | $1,171,551 | | Net Loss | $(1,316,099) | $(243,336) | | Net Loss Per Share | $(0.10) | $(0.03) | Six Months Ended June 30 (Unaudited) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Total Revenues | $2,671,801 | $2,953,274 | | Gross Margin | $1,592,412 | $2,147,922 | | Total Operating Expenses | $3,782,332 | $2,120,312 | | Net Loss | $(2,558,542) | $(230,781) | | Net Loss Per Share | $(0.19) | $(0.03) | Statement of Stockholders' Equity (Deficit) Stockholders' equity declined to $4.56 million by June 30, 2022, primarily due to a $2.56 million net loss and $0.95 million in treasury stock repurchases - Key activities impacting stockholders' equity in the first six months of 2022 include the net loss of $2,558,542 and the purchase of treasury stock for $945,449[23] Statements of Cash Flows Net cash used in operating activities significantly increased to $2.04 million for the six months ended June 30, 2022, resulting in a $2.09 million net decrease in cash Cash Flow Summary for Six Months Ended June 30 (Unaudited) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(2,038,532) | $(26,192) | | Net Cash Provided by (Used in) Investing Activities | $966,779 | $(54,507) | | Net Cash Used in Financing Activities | $(1,019,638) | $(265,636) | | Net Decrease in Cash | $(2,091,391) | $(346,335) | | Cash - End of Period | $335,106 | $626,490 | Notes to Financial Statements The notes detail the company's SaaS business model, revenue recognition, marketable securities, a $2.5 million stock repurchase plan, and a $0.93 million outstanding note payable - The Company operates a SaaS model, recognizing revenue from monthly and annual subscriptions over the subscription period[41] - On January 7, 2022, the Board authorized a stock repurchase plan for up to $2.5 million. As of June 30, 2022, 499,028 shares were repurchased for $945,449[49] - The Company has a $1 million note payable with a 12% interest rate, with an unpaid balance of $930,000 as of June 30, 2022[58] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes a Q2 2022 revenue decrease to macroeconomic factors, while operating expenses significantly rose, leading to a substantial net loss, yet believes sufficient capital exists for future operations Overview Blackboxstocks provides real-time stock and options analytics through a subscription-based SaaS platform, leveraging AI-enhanced predictive technology and social features for a global user base - The company's web-based software scans over 10,000 stocks and 1,500,000 options contracts per second using AI-enhanced predictive technology[65] - The business model is a subscription-based Software as a Service (SaaS) with a growing user base across 42 countries[65] Liquidity and Capital Resources Cash and marketable securities decreased to $7.07 million by June 30, 2022, with $2.04 million used in operations and $0.95 million for stock repurchases, though management expects sufficient capital for the next twelve months Cash and Marketable Securities | Date | Amount | | :--- | :--- | | June 30, 2022 | $7,069,826 | | December 31, 2021 | $10,442,379 | - Cash used in operations for the six months ended June 30, 2022, was ($2,038,532), compared to ($26,192) for the same period in 2021[70] - The company believes it has sufficient capital to fund operations and debt service for the next twelve months, following its public offering which raised net proceeds of approximately $10.51 million[74][75] Results of Operations Revenue declined due to negative macroeconomic conditions, while increased operating expenses, including marketing and software development, led to a significantly larger net loss for both the three and six-month periods - Management attributes the decline in revenues to negative macro-economic factors such as poor stock market performance, high inflation, and negative GDP growth[76] - Operating expenses are expected to continue increasing due to investments in digital advertising, marketing, and software development for new products and features[78] EBITDA (Non-GAAP Financial Measure) EBITDA for the three months ended June 30, 2022, was a $1.04 million loss, and a $1.93 million loss for the six-month period, a significant shift from the prior year Reconciliation of Net Loss to EBITDA | Period | Net Loss | EBITDA | | :--- | :--- | :--- | | Three Months Ended June 30, 2022 | $(1,316,099) | $(1,036,737) | | Three Months Ended June 30, 2021 | $(243,336) | $(112,141) | | Six Months Ended June 30, 2022 | $(2,558,542) | $(1,930,583) | | Six Months Ended June 30, 2021 | $(230,781) | $37,315 | Item 3. Quantitative and Qualitative Disclosures About Market Risk As a "smaller reporting company," the company is exempt from providing quantitative and qualitative disclosures about market risk - As a "smaller reporting company," the company is exempt from providing quantitative and qualitative disclosures about market risk[89] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that the Company's disclosure controls and procedures were effective as of June 30, 2022[90] - No changes in internal controls over financial reporting occurred during the quarter ended June 30, 2022, that have materially affected or are likely to materially affect internal controls[91] PART II – OTHER INFORMATION Item 1. Legal Proceedings The company reports no involvement in any legal proceedings - The company is not involved in any legal proceedings[95] Item 1A. Risk Factors This section refers to previously disclosed risk factors in the Annual Report on Form 10-K and Form S-1, indicating no material changes - For a discussion of risk factors, the report refers to the Company's Annual Report on Form 10-K filed on March 31, 2022, and its Form S-1 registration statement[96] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales occurred, and public offering proceeds were used for marketing and general expenses, including a stock repurchase plan that bought back 499,028 shares for $0.95 million - There were no sales of unregistered securities during the reporting period that have not been previously reported[97] - A stock repurchase plan was authorized on January 7, 2022, for up to $2.5 million. As of June 30, 2022, the company had repurchased 499,028 shares for an aggregate price of $945,449[98] Issuer Purchases of Equity Securities (as of June 30, 2022) | Period | Total Shares Purchased | Average Price Paid | Max Dollar Value Remaining | | :--- | :--- | :--- | :--- | | Total | 499,028 | $1.97 | $1,554,551 | Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities - There were no defaults upon senior securities[103] Item 4. Mine Safety Disclosures This item is not applicable to the company's operations - This section is not applicable[104] Item 5. Other Information The company reports no other information for this section - There is no other information to report[105] Item 6. Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including officer certifications and interactive data files - Exhibits filed with the report include officer certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL interactive data files (101.1, 104)[108]