BLACKBOXSTOCKS INC.

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 three months ended March 31, 2025, the Company incurred an operating loss of $887,666 and a net loss of $829,133. In addition, for the year ended December 31, 2024, the Company incurred an operating loss of $3,309,064 and a net loss of $3,471,227. Cash flows used in operations were $643,730 for the three months ended March 31, 2025, and $705,725 for the year ended December 31, 2024. The Company had cash of $215,346 as of March 31, 2025.These conditions raise substantial doubt about the Company’s ability to continue as a going concern. On March 10, 2025, the Company entered into a Merger Agreement with RABLBX Merger Sub Inc.,a Nevada Corporation, and wholly owned subsidiary of the Company (“Merger Sub”) and REalloys. Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, REalloys is expected to merge with and into Merger Sub, at which time Merger Sub will cease to exist and REalloys is expected to become a wholly-owned subsidiary of the Company. At the Closing of the Merger, the holders of capital stock and outstanding instruments convertible into or exercisable for capital stock of REalloys will receive shares of common and preferred stock of the Company, $0.001 par value, based on an Exchange Ratio formula in the Merger Agreement or as otherwise agreed to in the Merger Agreement, which is subject to adjustment in the event the parties raise capital in excess of certain thresholds. Immediately following Closing, based upon the Exchange Ratio, pre-Closing stockholders of the Company are expected to collectively retain approximately 7.3% of the post-Close aggregate Company Common Stock and holders of REalloys capital stock and instruments convertible into or exercisable for capital stock of the REalloys will receive as merger consideration common and convertible preferred stock of Company Common Stock representing approximately 92.7% of the post-Close aggregate as common stock of the Company. The Company believes that REalloys will be able to raise substantial capital and REalloys has completed a financing that will provide $5,000,000 upon completion of the Merger. Closing of the Merger is subject to various customary closing conditions including but not limited to the SEC declaring the registration statement effective, approval of REalloys initial listing application by Nasdaq, and stockholder approval.

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 six months ended June 30, 2025, the Company incurred an operating loss of $2,032,119 and a net loss of $2,098,402. In addition, for the year ended December 31, 2024, the Company incurred an operating loss of $3,309,064 and a net loss of $3,471,227. Cash flows used in operations were $1,693,863 for the six months ended June 30, 2025, and $705,725 for the year ended December 31, 2024. The Company had cash of $38,164 as of June 30, 2025.These conditions raise substantial doubt about the Company’s ability to continue as a going concern. On March 10, 2025, the Company entered into a Merger Agreement with RABLBX Merger Sub Inc., a Nevada Corporation, and wholly owned subsidiary of the Company (“Merger Sub”) and REalloys. Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, REalloys is expected to merge with and into Merger Sub, at which time Merger Sub will cease to exist and REalloys is expected to become a wholly-owned subsidiary of the Company. At the Closing of the Merger, the holders of capital stock and outstanding instruments convertible into or exercisable for capital stock of REalloys will receive shares of common and preferred stock of the Company, $0.001 par value, based on an Exchange Ratio formula in the Merger Agreement or as otherwise agreed to in the Merger Agreement, which is subject to adjustment in the event the parties raise capital in excess of certain thresholds. Immediately following Closing, based upon the Exchange Ratio, pre-Closing stockholders of the Company are expected to collectively retain approximately 7.3% of the post-Close aggregate Company Common Stock and holders of REalloys capital stock and instruments convertible into or exercisable for capital stock of the REalloys will receive as merger consideration common and convertible preferred stock of Company Common Stock representing approximately 92.7% of the post-Close aggregate as common stock of the Company. The Company believes that REalloys will be able to raise substantial capital and REalloys has completed a financing that will provide $5,000,000 upon completion of the Merger. Closing of the Merger is subject to various customary closing conditions including but not limited to the SEC declaring the registration statement effective, approval of REalloys initial listing application by Nasdaq, and stockholder approval.

Previous wording

In addition, the Company entered into a Securities Purchase Agreement dated with Five Narrow Lane LP, on January 17, 2025 (which was later amended on January 27, 2025 pursuant to which the Company agreed to issue, and Five Narrow Lane LP agreed to purchase, a series of debentures (the “Purchase Agreement”). The Purchase Agreement provides for financing of up to an aggregate principal amount of $2,300,000 of which $1,800,000 has been received. An additional $500,000 is expected to be funded when the Merger Registration Statement is declared effective by the SEC. There can be no assurance that the Merger with REalloys will be completed and the related financing will be received.

Current wording

In addition, the Company entered into a Securities Purchase Agreement dated with Five Narrow Lane LP (“FNL”), on January 17, 2025 (which was later amended on January 27, 2025 pursuant to which the Company agreed to issue, and FNL agreed to purchase debentures (the “Purchase Agreement”). The Purchase Agreement provides for financing of up to an aggregate principal amount of $2,300,000 of convertible debentures of which $2,050,000 has been received. An additional $250,000 is expected to be funded when the Merger Registration Statement is declared effective by the SEC. There can be no assurance that the Merger with REalloys will be completed and the related financing will be received.

Previous wording

Net cash used in investing activities was $0 and $3,303 for the three months ended March 31, 2025 and 2024 respectively. We don expect investing activities to require significant capital in the next twelve months.

Current wording

Net cash used in investing activities was $0 and $3,303 for the six months ended June 30, 2025 and 2024 respectively. We do not expect investing activities to require significant capital in the next twelve months.

Previous wording

Net cash provided by financing activities was $726,605 for the three months ended March 31, 2025, as compared to net cash used in financing activities of $7,229 for the prior year period. The increase in financing activities was the result of proceeds from the sale issuance of our debenture to FNL in the amount of $1,050,000 which was partially offset by issuance costs and payments made on merchant cash advances. As noted above, the Company expects one additional funding from FNL remaining in the amount of $500,000 which is due upon the SEC declaring the registration statement on form S-4 effective. In addition, the Company has filed a shelf registration statement on form S-3 for the offering and sale of up to $50,000,000 in Company securities. Under the terms of the Purchase Agreement, we may have to utilize up to 50% of the proceeds from any sale of securities under the S-3 to repay the outstanding debentures held by FNL.

Current wording

Net cash provided by financing activities was $1,714,991 for the six months ended June 30, 2025, as compared to $1,266,680 for the prior year period. The 2025 financing activity cash flow was primarily due to proceeds from the sale issuance of our debenture to FNL in the amount of $2,050,000 which was partially offset by issuance costs and payments made on merchant cash advances. As noted above, the Company expects one additional funding from FNL remaining in the amount of $250,000 which is due upon the SEC declaring the Merger consideration registration statement on form S-4 effective. In addition, the Company has filed a shelf registration statement on form S-3 for the offering and sale of up to $50,000,000 in Company securities. Under the terms of the Purchase Agreement, we may have to utilize up to 50% of the proceeds from any sale of securities under the S-3 to repay the outstanding debentures held by FNL.

Previous wording

For the three months ended March 31, 2025, our revenue was $587,078, as compared to $649,420, for the three months ended March 31, 2024. The decline in revenue of 9.6% was due to fewer subscribers in the current year as well as slightly lower revenue per subscriber. Average subscribers for the three months ended March 31, 2025, was 2,707 as compared to 2,996 for the prior year period. Average monthly revenue per subscriber was $69.22 for the three months ended March 31, 2025, as compared to $72.19 in the prior year period. Other revenue for the period ended March 31.2025 consisted primarily of education revenue which is a new product for the Company. We expect revenue from educational offerings to increase significantly in future periods.

Current wording

For the three months ended June 30, 2025, our revenue was $518,783, as compared to $684,712, for the three months ended June 30, 2024. The decline in revenue of 24.2% was due to fewer subscribers in the current year as well as slightly lower revenue per subscriber. Average subscribers for the three months ended June 30, 2025, was 2,707 as compared to 2,996 for the prior year period. Average monthly revenue per subscriber was $63.88 for the three months ended June 30, 2025, as compared to $76.11 in the prior year period. The lower average revenue per subscriber was driven by promotional offerings of $29.97 per month.

Previous wording

Cost of revenues for the three months ended March 31, 2025, and 2024 were $343,003 and $357,958, resulting in gross margins of 41.6% and 44.9%, 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.

Current wording

Cost of revenues for the three months ended June 30, 2025, and 2024 were $351,559 and $356,017, resulting in gross margins of 32.2% and 48.0%, 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 decrease in the gross profit margin was driven by lower absorption of fixed costs and lower average revenue per subscriber.

Previous wording

For the three months ended March 31, 2025, operating expenses were $1,131,741 as compared to $1,155,428 for the same period in 2024, a decrease of $23,700 or 2.1%. Software development costs decreased only slightly in the current period to $105,982. Selling, general and administrative expenses increased from $95,929 for the three months ended March 31, 2024, to $958,521 for the three months ended March 31, 2025. The increase was primarily driven by higher professional fees associated with the pending Merger with REalloys. Advertising and marketing expenses decreased by $67,394 or 50.8% from $132,723 for the three months ended March 31, 2024, to $65,329 for the three months ended March 31, 2025, as the Company continues to reposition its marketing strategy. The Company may incur additional marketing expense in connection with its educational products the during the balance of 2025.

Current wording

For the three months ended June 30, 2025, operating expenses were $1,310,677 as compared to $1,153,612 for the same period in 2024, an increase of $158,065 or 13.7%. Software development costs increased only slightly in the current period to $102,910. Selling, general and administrative expenses increased from $938,269 for the three months ended June 30, 2024, to $1,130,270 for the three months ended June 30, 2025. The increase of $192,001 was primarily driven by $96,916 in higher professional fees associated with the pending Merger with REalloys and $79,301 of higher stock-based compensation during the 2025 period. Advertising and marketing expenses decreased by $35,757 or 32.0% from $111,663 for the three months ended June 30, 2024, to $75,906 for the three months ended June 30, 2025, as the Company continues to reposition its marketing strategy. The Company may incur additional marketing expense in connection with its educational products the during the balance of 2025.

Previous wording

Our loss from operations for the three months ended March 31, 2025, was $829,133 as compared to a loss from operations of $863,711 for the prior year period.

Current wording

Our loss from operations for the three months ended June 30, 2025, was $1,144,453 as compared to a loss from operations of $824,917 for the prior year period.