BLACKBOXSTOCKS INC

Previous wording

Blackboxstocks, Inc. is a financial technology and social media hybrid platform offering real-time proprietary analytics and news for stock and options traders of all levels. Our web-based software (the “Blackbox System”) employs “predictive technology” enhanced by artificial intelligence to find volatility and unusual market activity that may result in the rapid change in the price of a stock or option. We continuously scan the New York Stock Exchange (“NYSE”), NASDAQ, Chicago Board Options Exchange (the “CBOE”) and other options markets, analyzing over 10,000 stocks and over 1,500,000 options contracts multiple times per second. We provide our users with a fully interactive social media platform that is integrated into our dashboard, enabling our users to exchange information and ideas quickly and efficiently through a common network. We have also introduced a live audio/video feature that allows our members to broadcast on their own channels to share trading strategies and market insight within the Blackbox community. We employ a subscription based Software as a Service (“SaaS”) business model and maintain a growing base of users that spans over 40 countries.

Current wording

Blackboxstocks, Inc. is a financial technology and social media hybrid platform offering real-time proprietary analytics and news for stock and options traders of all levels. Our web-based software (the “Blackbox System”) employs “predictive technology” enhanced by artificial intelligence to find volatility and unusual market activity that may result in the rapid change in the price of a stock or option. We continuously scan the New York Stock Exchange (“NYSE”), NASDAQ, Chicago Board Options Exchange (the “CBOE”) and other options markets, analyzing over 10,000 stocks and over 1,500,000 options contracts multiple times per second. We provide our users with a fully interactive social media platform that is integrated into our dashboard, enabling our users to exchange information and ideas quickly and efficiently through a common network. We have also introduced a live audio/video feature that allows our members to broadcast on their own channels to share trading strategies and market insight within the Blackbox community. We employ a subscription based Software as a Service (“SaaS”) business model and maintain a base of users that spans over 40 countries.

Previous wording

The accompanying financial statements have been prepared in assumption of the continuation of the Company as a going concern, which is dependent upon the Company's ability to obtain sufficient financing or establish itself as a profitable business. For the six months ended June 30, 2024, the Company incurred an operating loss of $1,718,823 and a net loss of $1,741,654. In addition, for the year ended December 31, 2023, the Company incurred an operating loss of $5,297,671 and a net loss of $4,664,455. Cash flows used in operations were $687,198 for the six months ended June 30, 2024, and $3,166,067 for the year ended December 31, 2023. The Company has cash of $1,055,482 as of June 30, 2024.These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company has executed a share exchange agreement with Evtec Aluminium Limited (“Evtec Aluminium”), whereby the Company expects to acquire all of the issued and outstanding share capital of Evtec Aluminium with the result of Evtec Aluminium becoming a wholly-owned subsidiary of the Company (the “Exchange”). in the Exchange will be accounted for as a reverse acquisition with Evtec Aluminium being the accounting acquiror. The Company believes that the merger with Evtec Aluminium will attract additional capital investment as Evtec Aluminium is substantially larger than Blackbox and has a strong acquisition pipeline. Management has also implemented a number of initiatives aimed at improving operating cash flow including, new product development, revised marketing strategies and expense reductions. In addition, the Company has historically been able to raise debt or equity financing to meet its capital needs and is also evaluating strategic alternatives with respect to possible mergers or acquisitions. There can be no assurance that the Company’s operational changes will impact its cash flow or if it will be able to raise additional capital or on what terms or if it will be able to execute the planned acquisition of Evtec Aluminium.

Current wording

The accompanying financial statements have been prepared in assumption of the continuation of the Company as a going concern, which is dependent upon the Company's ability to obtain sufficient financing or establish itself as a profitable business. For the nine months ended September 30, 2024, the Company incurred an operating loss of $2,452,989 and a net loss of $2,522,487. In addition, for the year ended December 31, 2023, the Company incurred an operating loss of $5,297,671 and a net loss of $4,664,455. Cash flows used in operations were $681,353 for the nine months ended September 30, 2024, and $3,166,067 for the year ended December 31, 2023. The Company has cash of $60,921 as of September 30, 2024.These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company has executed a share exchange agreement with Evtec Aluminium Limited (“Evtec Aluminium”), whereby the Company expects to acquire all of the issued and outstanding share capital of Evtec Aluminium with the result of Evtec Aluminium becoming a wholly-owned subsidiary of the Company (the “Exchange”). The Exchange will be accounted for as a reverse acquisition with Evtec Aluminium being the accounting acquiror. The Company believes that the merger with Evtec Aluminium will attract additional capital investment as Evtec Aluminium is substantially larger than Blackbox and has a strong acquisition pipeline. Management has also implemented a number of initiatives aimed at improving operating cash flow including, new product development, revised marketing strategies and expense reductions. In addition, the Company has historically been able to raise debt or equity financing to meet its capital needs and is also evaluating strategic alternatives with respect to possible mergers or acquisitions. There can be no assurance that the Company’s operational changes will impact its cash flow or if it will be able to raise additional capital or on what terms or if it will be able to execute the planned acquisition of Evtec Aluminium.

Previous wording

At June 30, 2024, we had cash and marketable securities totaling $1,055,482 as compared to cash and marketable securities totaling $475,652 at December 31, 2023. Our cash flows used in operations were $687,198 for the six months ended June 30, 2024, as compared to $2,717,168 for the same period in the prior year.

Current wording

At September 30, 2024, we had cash and marketable securities totaling $60,921 as compared to cash and marketable securities totaling $475,652 at December 31, 2023. Our cash flows used in operations were $681,353 for the nine months ended September 30, 2024, as compared to $3,199,362 for the same period in the prior year.

Previous wording

Net cash from investing activities for the six months ended June 30, 2024, was $3,303 as compared to $2,593,776 for the prior year period. The decrease in the cash flow from investing activities was due to the liquidation of marketable securities in order to fund the Company’s operations during the prior year. The volume of marketable securities includes trading activity in a Company account that was used to research and test specific trading techniques although the account held less than $100,000. We do not expect capital expenditures to be significant for the remainder of 2024.

Current wording

Net cash used in investing activities for the nine months ended September 30, 2024, was $1,096,697 as compared to cash provided by investing activities of $3,273,886 for the prior year period. The decrease in the cash flow from investing activities was due to the liquidation of marketable securities in order to fund the Company’s operations during the prior year, combined with the issuance of a note receivable in the current year. The volume of marketable securities includes trading activity in a Company account that was used to research and test specific trading techniques although the account held less than $100,000. We do not expect capital expenditures to be significant for the remainder of 2024.

Previous wording

Net cash provided by financing activities was $1,266,680 for the six months ended June 30, 2024, as compared to net cash used in financing activities of $29,622 for the prior year period. The increase in financing activities was the result of additional funding received in 2024 recorded as other liabilities and merchant cash advances.

Current wording

Net cash provided by financing activities was $1,366,274 for the nine months ended September 30, 2024, as compared to net cash used in financing activities of $36,814 for the prior year period. The increase in financing activities was the result of proceeds from the sale of common stock and funding from merchant cash advances.

Previous wording

As noted above, the Company intends to pursue the planned acquisition transaction with Evtec Aluminium however there can be no assurance that it will be able to complete the transaction or that such a transaction will provide the Company with sufficient liquidity to fund its operations. In addition, the Company may need to raise additional debt or equity capital in order to fund its operations. There can be no assurance that the Company will be able to do so or on acceptable terms.

Current wording

As noted above, the Company intends to pursue the planned acquisition transaction with Evtec Aluminium however there can be no assurance that it will be able to complete the transaction or that such a transaction will provide the Company with sufficient liquidity to fund its operations. In addition, the Company may need to raise additional debt or equity capital in order to fund its operations. There can be no assurance that the Company will be able to do so or on acceptable terms. For the nine months ended September 30, 2024, Evtec Aluminium advanced the Company $1,043,000 in financial support. Evtec Aluminium is not contractually required to provide any additional support and there can be no assurance that they may do so.

Previous wording

For the three months ended June 30, 2024, our revenue was $684,712, as compared to $737,398, for the three months ended June 30, 2023. The decline in revenue of 7% was due to fewer subscribers in the current year that was partially offset by higher average revenue per subscriber. Average subscribers for the three months ended June 30, 2024, was 2,983 as compared to 3,987 for the prior year period. Average monthly revenue per subscriber was $72.18 for the three months ended June 30, 2024, as compared to $61.42 in the prior year period. The increase in average revenue per subscriber was due to a large promotion with heavily discounted memberships in the second quarter of 2023.

Current wording

For the three months ended September 30, 2024, our revenue was $646,792, as compared to $727,218, for the three months ended September 30, 2023. The decline in revenue of 11% was due to fewer subscribers in the current year that was partially offset by higher average revenue per subscriber. Average subscribers for the three months ended September 30, 2024, was 2,972 as compared to 3,174 for the prior year period. Average monthly revenue per subscriber was $72.55 for the three months ended September 30, 2024, as compared to $76.37 in the prior year period.

Previous wording

Cost of revenues for the six months ended June 30, 2024, and 2023 were $713,975 and $874,606, resulting in gross margins of 46% and 45%, respectively. The primary components of cost of revenues include costs related to data and news feed expenses for exchange information which comprise the majority of the costs, as well as the costs for program moderators. The gross margin percentage is expected to remain between 45% and 50%.

Current wording

Cost of revenues for the three months ended September 30, 2024, and 2023 were $293,842 and $327,928, resulting in gross margins of 55% for both periods. The primary components of cost of revenues include costs related to data and news feed expenses for exchange information which comprise the majority of the costs, as well as the costs for program moderators. The gross margin percentage is expected to remain between 45% and 55%.

Previous wording

For the three months ended June 30, 2024, operating expenses were $1,183,552 as compared to $1,741,722 for the same period in 2023, a decrease of $558,170 or 32%. We significantly reduced expenditures in software development costs, advertising and marketing and selling general and administrative expenses for the 2024 period. Selling, general and administrative expenses decreased from $1,350,378 for the three months ended June 30, 2023, to $938,249 for the three months ended June 30, 2024, a decrease of $412,129 or 31%. The decrease was primarily driven by lower stock-based compensation expense which was partially offset by higher professional fees associated with the pending Exchange with Evtec Aluminum. Advertising and marketing expenses decreased by $41,752 or 27% from $153,415 for the three months ended June 30, 2023, to $111,663 for the three months ended June 30, 2024, as the Company continues to reposition its marketing strategy. Software development costs decreased by $126,608 or 56% from $227,250 in the three months ended June 30, 2023, to $100,642 for the three months ended June 30, 2024. The decreased software development costs reflected lower development costs for our new product Stock Nanny.

Current wording

For the three months ended September 30, 2024, operating expenses were $1,088,582 as compared to $1,269,769 for the same period in 2023, a decrease of $181,187 or 14%. We significantly reduced expenditures in software development costs, advertising and marketing and selling, general and administrative expenses for the 2024 period. Selling, general and administrative expenses decreased from $957,372 for the three months ended September 30, 2023, to $891,282 for the three months ended September 30, 2024, a decrease of $66,090 or 7%. The decrease was primarily driven by lower stock-based compensation expense which was partially offset by higher professional fees associated with the pending Exchange with Evtec Aluminum. Advertising and marketing expenses decreased by $34,741 or 27% from $127,632 for the three months ended September 30, 2023, to $92,891 for the three months ended September 30, 2024, as the Company continues to reposition its marketing strategy. Software development costs decreased by $71,792 or 41% from $173,665 in the three months ended September 30, 2023, to $101,873 for the three months ended September 30, 2024. The decreased software development costs reflected lower development costs for our new product, Stock Nanny.

Previous wording

Our loss from operations for the three months ended June 30, 2024, was $854,857 as compared to a loss from operations of $1,431,299 for the prior year period. The improvement in the loss from operations was driven by lower operating expenses and was partially offset by the lower sales.

Current wording

Our loss from operations for the three months ended September 30, 2024, was $734,166 as compared to a loss from operations of $869,229 for the prior year period. The improvement in the loss from operations was driven by lower operating expenses and was partially offset by the lower sales.

Previous wording

For the six months ended June 30, 2024, our revenue was $1,332,722, as compared to $1,589,638, for the six months ended June 30, 2023. The decline in revenue of 16% was due to fewer subscribers in the current year that was partially offset by higher average revenue per subscriber. Average subscribers for the six months ended June 30, 2024, was 2,989 as compared to 3,756 for the prior year period. Average monthly revenue per subscriber was $74.30 for the six months ended June 30, 2024, as compared to $70.53 in the prior year period. The increase in average revenue per subscriber was due to a large promotion with heavily discounted memberships in the second quarter of 2023.

Current wording

For the nine months ended September 30, 2024, our revenue was $1,981,974, as compared to $2,324,870, for the nine months ended September 30, 2023. The decline in revenue of 15% was due to fewer subscribers in the current year that was partially offset by higher average revenue per subscriber. Average subscribers for the nine months ended September 30, 2024, was 2,986 as compared to 3,564 for the prior year period. Average monthly revenue per subscriber was $73.66 for the nine months ended September 30, 2024, as compared to $72.24 in the prior year period.

Previous wording

Cost of revenues for the three months ended June 30, 2024, and 2023 were $356,017 and $426,975, resulting in gross margins of 48% and 42%, respectively. The primary components of cost of revenues include costs related to data and news feed expenses for exchange information which comprise the majority of the costs, as well as the costs for program moderators. The gross margin percentage is expected to remain between 45% and 50%.

Current wording

Cost of revenues for the nine months ended September 30, 2024, and 2023 were $1,007,401 and $1,202,534, resulting in gross margins of 49% and 48%, respectively. The primary components of cost of revenues include costs related to data and news feed expenses for exchange information which comprise the majority of the costs, as well as the costs for program moderators. The gross margin percentage is expected to remain between 45% and 55%.

Previous wording

For the six months ended June 30, 2024, operating expenses were $2,338,980 as compared to $4,099,899 for the same period in 2023, a decrease of $1,760,919 or 43%. We significantly reduced expenditures in software development costs, advertising and marketing and selling general and administrative expenses for the 2024 period. Selling, general and administrative expenses decreased from $3,128,012 for the six months ended June 30, 2023, to $1,844,178 for the six months ended June 30, 2024, a decrease of $1,283,834 or 41%. The decrease was primarily driven by lower stock-based compensation expense which was partially offset by higher professional fees associated with the pending Exchange with Evtec Aluminum. Advertising and marketing expenses decreased by $124,010 or 34% from $368,396 for the six months ended June 30, 2023, to $244,386 for the six months ended June 30, 2024, as the Company continues to reposition its marketing strategy. Software development costs decreased by $373,249 or 64% from $582,294 in the six months ended June 30, 2023, to $209,045 for the six months ended June 30, 2024. The decreased software development costs reflected lower development costs for our new product Stock Nanny.

Current wording

For the nine months ended September 30, 2024, operating expenses were $3,429,812 as compared to $5,369,668 for the same period in 2023, a decrease of $1,939,856 or 36%. We significantly reduced expenditures in software development costs, advertising and marketing and selling general and administrative expenses for the 2024 period. Selling, general and administrative expenses decreased from $4,085,384 for the nine months ended September 30, 2023, to $2,735,480 for the nine months ended September 30, 2024, a decrease of $1,349,904 or 33%. The decrease was primarily driven by lower stock-based compensation expense which was partially offset by higher professional fees associated with the pending Exchange with Evtec Aluminum. Advertising and marketing expenses decreased by $158,751 or 32% from $496,028 for the nine months ended September 30, 2023, to $337,277 for the nine months ended September 30, 2024, as the Company continues to reposition its marketing strategy. Software development costs decreased by $445,041 or 59% from $755,959 in the nine months ended September 30, 2023, to $310,918 for the nine months ended September 30, 2024. The decreased software development costs reflected lower development costs for our new product Stock Nanny.

Previous wording

Our loss from operations for the six months ended June 30, 2024, was $1,718,823 as compared to a loss from operations of $3,378,103 for the prior year period. The improvement in the loss from operations was driven by lower operating expenses and was partially offset by the lower sales.

Current wording

Our loss from operations for the nine months ended September 30, 2024, was $2,452,989 as compared to a loss from operations of $4,247,332 for the prior year period. The improvement in the loss from operations was driven by lower operating expenses and was partially offset by the lower sales.