REALLOYS INC.

Current report

Forward-Looking Statements

Current report

Certain statements made in this report, as well as oral statements made by the Company from time to time, constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Readers can identify these forward-looking statements by our use of the words "expects," "anticipates," "estimates," "potential," "believes," "projects," "intends," "plans," "aims," "will," "may," "shall," "could," "should," "opportunity," "goal," "objective," "target," "milestone" and similar words and other statements of a similar sense. These statements are based on our current estimates and expectations as to prospective events and circumstances, which may or may not be in our control and as to which there can be no firm assurances given. These forward-looking statements involve known and unknown risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include: (1) the impact of competitive pressures; (2) the inability to attract and retain skilled employees and effectively plan for succession, while maintaining our unique corporate culture; (3) economic, political, and other risks; (4) the challenges in integrating and achieving expected results from acquired businesses; (5) uncertainty surrounding our future capital needs; (6) information security breaches and other cybersecurity threats; (7) the failure to comply with laws or regulations relating to data privacy, data protection, AI, or other automated technologies; (8) challenges in accurately forecasting our financial results due to seasonal and cyclical variations in customer purchasing patterns and economic and market volatility; (9) potential impairment charges with respect to our investments or acquired intangible assets; (10) exposure to additional tax liabilities, increases and fluctuations in our effective tax rate, and other tax matters; (11) business disruptions from natural or man-made disasters, public health crises, or other events outside our control; and (12) stock price volatility.

Current report

Unless the context requires otherwise, “REalloys,” the “Company,” “we,” “us” and “our” refer to REalloys Inc. and its consolidated subsidiaries.

Current report

REalloys is a U.S.‑based rare earth minerals and materials company building a vertically integrated North American “mine‑to‑magnet” supply chain for U.S. Protected Markets, including defense, aerospace, energy, electronics and advanced industrial applications. Our strategy pairs strategic upstream rare earth resources with downstream metallization and magnet materials manufacturing—both located in North America—to provide a secure, transparent and traceable alternative to the Chinese‑dominated supply chain.

Current report

We operate through two principal subsidiaries:

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•Strategic Metals Development Corp. (“Strategic Metals”) holds a 100% interest in the Hoidas Lake Project, an exploration‑stage rare earth property in northern Saskatchewan comprising 14 contiguous dispositions over approximately 12,522 hectares. The property is enriched in the magnet rare earths neodymium and praseodymium. Historical reports referenced 963,808 tonnes of measured, 1,597,027 tonnes of indicated and 2,560,835 tonnes of inferred mineralization; these historical estimates are not classified as mineral resources or reserves under S‑K 1300, and economic viability has not been established.

Current report

•PMT Critical Metals Inc. (“PMTCM”), acquired on March 31, 2025, operates the Euclid Facility, which produces rare earth metals, alloys and NdFeB magnet materials for customers including the U.S. Defense Logistics Agency, the U.S. Department of Energy’s Ames National Laboratory and industrial magnet customers.

Current report

Agreement and Plan of Merger

Current report

On March 10, 2025, REalloys Inc. (formerly known as Blackbox; “REalloys” or the “Company”) and its wholly owned subsidiary, RABLBX Merger Sub, Inc., (“RABLBX”), entered into an Agreement and Plan of Merger, as amended by that certain Amendment No. 1 (“Amendment No. 1”), dated as of July 1, 2025, Amendment No. 2 (“Amendment No. 2”), dated as of August 22, 2025, and Amendment No. 3 (“Amendment No. 3”) dated as of December 10, 2025 (collectively, the “Merger Agreement”), with REalloys Solutions Inc. (formerly known as REalloys Inc.; “Private REalloys”). In accordance with the Merger Agreement, RABLBX merged with and into Private REalloys, with Private REalloys surviving as a wholly owned subsidiary of the Company. On February 24, 2026, (i) pursuant to an amendment to its Articles of Incorporation, the Company changed its name from “Blackbox” to “REalloys Inc.”, (ii) pursuant to an amendment to its Articles of Incorporation, Private REalloys changed its name to “REalloys Solutions Inc.”, and (iii) REalloys and RABLBX filed the Certificate of Merger with the State of Nevada (the “Merger”). On February 24, 2026, the Merger closed (the “Closing” and such date, the “Closing Date”).d. The quarter reflects 33 days of consolidated Blackbox operations (February 25 through March 31, 2026).

Current report

Option Exercise

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On May 5, 2026, we entered into an option exercise agreement with Gust Kepler (the “Option Exercise Agreement” and such exercise, the “Option Exercise”). Previously, on February 24, 2026, pursuant to that certain Option Agreement, dated as of February 24, 2026 (the “Option Agreement”), upon exercise of the Put Right (as defined therein), Mr. Kepler was required to transfer an aggregate of 1,084,999 shares of Company’s Series A Preferred Stock, par value $0.001 (the “Series A Preferred Stock”) held by Mr. Kepler in exchange for the Company transferring an aggregate of 3,269,998 shares of Series A Preferred Stock of Blackbox.io, Inc., which represents all of the Series A Preferred Stock of Blackbox.io, Inc. owned by us. Following the Option Exercise, Blackbox.io ceased to be a subsidiary of the Company.

Current report

Underwritten Public Offering — March 2026

Current report

On March 9, 2026, we completed an underwritten public offering of 2,702,702 shares of our common stock at a public offering price of $18.50 per share and the Underwriters purchased shares pursuant to the underwriting agreement at a price per Share of (i) $17.39 in connection with 2,349,037 Shares sold to investors sourced by the Underwriters and (ii) $18.2225 for 353,665 Shares sold to investors sourced by the Company. . We received gross proceeds of $50.0 million and net proceeds of approximately $46.8 million, after underwriting discounts and commissions of approximately $2.7 million and offering expenses. We granted the underwriters a 30-day option to purchase up to 396,963 additional shares on the same terms to cover over-allotments; the option expired unexercised on April 8, 2026.

Current report

Effective March 5, 2026, and in connection with the offering, we terminated the at-the-market equity program inherited from Blackbox, under which 260,000 shares had been sold for gross proceeds of approximately $2.2 million from inception through February 19, 2026. We do not intend to resume sales under the program.

Current report

We agreed to a 60-day lock-up on additional equity issuances, which expired on May 8, 2026, and granted the lead underwriter a 180-day right to participate in certain future financings, which remains in effect through September 5, 2026.

Current report

Preferred Share Conversion and Deconsolidation of Blackbox.io, Inc.

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On April 14, 2026, Gust Kepler, the former CEO of Blackbox converted 550,000 shares of Series A Convertible Preferred Stock into 550,000 shares of common stock in accordance with the related Certificate of Designations.

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On May 5, 2026, pursuant to the 2025 Option Exercise Agreement with Gust Kepler, the sole director and President of Blackbox.io, Inc. (“Blackbox.io”), the Nevada corporation that operates the historic Blackbox fintech business. Pursuant to that agreement, Mr. Kepler transferred to us 1,084,999 shares of our Series A Convertible Preferred Stock and we transferred to Mr. Kepler 3,269,998 shares of Series A Preferred Stock of Blackbox.io, representing all such shares we held.

Current report

Each share of Blackbox.io Series A Preferred Stock carries 100 votes per share and votes with the common stock as a single class. Following the transfer, Mr. Kepler holds a majority of Blackbox.io’s voting power, and we no longer have the ability to elect or remove directors or otherwise direct the activities most significant to Blackbox.io’s economic performance. We retain our common stock equity interest in Blackbox.io, which represents a non‑controlling minority voting interest.

Current report

As of May 2026, following the Option Exercise, Blackbox.io ceased to be a subsidiary. Blackbox.io is not material to our consolidated results, financial position or cash flows; the financial effect of the deconsolidation will be reflected in our financial statements for the three and six months ending June 30, 2026.

Current report

Separately, on the same day Mr. Kepler sold 1,634,999 shares of our Series A Convertible Preferred Stock to Leonard Sternheim for aggregate consideration of $1.00, pursuant to a previously disclosed February 24, 2026 stock purchase agreement contingent on closing of the Merger. We were not a party to, and received no proceeds from, that transaction. As a result of these transactions, voting control of the Company is now substantially concentrated in our Chief Executive Officer and director, Leonard Sternheim. Following the Company's reacquisition and cancellation of 1,084,999 shares of our Series A Convertible Preferred Stock from Mr. Kepler. Mr. Sternheim beneficially owns all of the shares of our Series A Convertible Preferred Stock that remain outstanding. Each share of our Series A Convertible Preferred Stock carries 100 votes per share and votes together with our Common Stock as a single class on all matters submitted to a vote of stockholders. Without considering the shares of our Common Stock that Mr. Sternheim directly or indirectly holds, Mr. Sternheim now controls a substantial majority of the aggregate voting power of our outstanding capital stock. As a consequence, the Company now meets the definition of a "controlled company" within the meaning of Nasdaq Listing Rule 5615(c). The Company does not currently intend to rely on the corporate governance exemptions available to controlled companies under Nasdaq Listing Rule 5615(c)(2), and will continue to maintain a majority‑independent Board of Directors and fully independent Audit, Compensation, and Nominating and Corporate Governance Committees. The concentration of voting power described above, the potential for transactions in which Mr. Sternheim has an interest that differs from that of our other stockholders, and the limited ability of our public stockholders to influence matters submitted to a vote could materially and adversely affect the trading price of our Common Stock and are described in greater detail in Part II, Item 1A of this Quarterly Report on Form 10‑Q.

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Key Factors and Trends Affecting Our Business

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We believe the following factors will significantly affect our future results, financial condition and cash flows. The discussion reflects management’s current expectations and is subject to the matters described under “Risk Factors” and “Cautionary Note Regarding Forward‑Looking Statements.”

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Demand for Rare Earth Materials and Magnets

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Magnet rare earths—neodymium, praseodymium, dysprosium, terbium and samarium—are critical inputs for NdFeB and samarium‑cobalt magnets used across defense, aerospace, electric and hybrid vehicles, robotics, industrial automation, wind, medical devices and consumer electronics. We expect medium‑ and long‑term demand to grow with electrification, the energy transition, the proliferation of “physical AI” applications and increasing focus on industrial and defense supply chain security.

Current report

During 2025 and into 2026, China expanded export controls and licensing requirements on rare earths, rare earth magnets and downstream products, including products containing even trace amounts of Chinese‑origin material. The November 2025 U.S.–China trade and economic understanding suspended certain expanded controls and retaliatory measures, but heightened market focus on rare earth supply chain volatility, potential magnet rare earth shortages, price volatility and the strategic value of non‑Chinese supply continues. As an integrated North American producer that spans upstream resources and downstream metallization and magnet materials, we believe we are well positioned to benefit from these trends, particularly as U.S. policy, procurement and customer qualification frameworks continue to favor domestic, traceable supply.

Current report

U.S. and Allied Policy and Procurement

Current report

U.S. initiatives under the Defense Production Act, the Inflation Reduction Act, the Department of Defense Industrial Base Analysis and Sustainment program and related procurement and grant programs continue to support the domestic critical minerals supply chain. The Euclid Facility currently supplies government and government‑affiliated customers, and we are actively pursuing additional government, defense and dual‑use customer relationships and funding opportunities. Changes in administration priorities, appropriations, tariff and trade policy, or program scope could materially affect demand, realized prices and the availability of government funding for our capital projects.

Current report

Advancement of the SRC Strategic Processing and Metallization Arrangements

Current report

We are continuing to advance our strategy to develop rare earth separation, processing, and metallization capabilities in North America. A key element of this strategy is our relationship with SRC, under which we entered into arrangements in November 2025 to support pilot-scale process development and the planned development of a commercial-scale metallization facility.

Current report

The SRC arrangements are expected to affect our business, liquidity, capital allocation, operating results, and development timeline. During the three months ended March 31, 2026, we paid aggregate deposits of $2.4 million to SRC, consisting of $1.4 million under the Pilot Agreement and $1.0 million under the EPF Agreement. As of March 31, 2026, we had not received equipment, goods, or services related to these deposits. Accordingly, the deposits were recorded as prepaid or other assets rather than expense, construction in progress, or property and equipment.

Current report

The Pilot process project is intended to support pilot-scale process development and validation activities. The anticipated pilot process and related pilot equipment are expected to provide technical information necessary to determine processing specifications, equipment configuration, operating parameters, and other requirements for the planned commercial-scale metallization facility. The results, timing, and cost of the pilot program may affect the scope, timing, and cost of the commercial-scale facility and our related capital requirements.

Current report

Future expenditures related to the planned commercial-scale metallization facility may be significant and may vary based on the pilot results, engineering requirements, equipment procurement, permitting and safety requirements, commissioning requirements, availability of financing, and our approval of future work programs. We expect that these arrangements will continue to be an important factor affecting our liquidity and capital resources as we advance our processing and metallization strategy.

Current report

Ramp-Up and Expansion of the Euclid Facility

Current report

Near‑term revenue is generated primarily at the Euclid Facility under short‑term service and supply contracts for rare earth metals, alloys and magnet materials. From acquisition on March 31, 2025 through December 31, 2025, the Euclid Facility generated $0.8 million of revenue and $0.9 million of related cost of sales. Growth in revenue and operating margin will depend on customer and product qualification, capital investment in equipment upgrades, automation and capacity expansion, feedstock supply (including under our SRC arrangement), workforce and continued compliance with the requirements applicable to U.S. government and defense customers. We continue to evaluate further investment in metallization, alloy and magnet materials capacity, which we expect to require additional capital expenditures.

Current report

Advancement of the Hoidas Lake Project

Current report

The Hoidas Lake Project remains an exploration‑stage property. As of March 31, 2026, we had capitalized $50.5 million in related mining property rights, with no amortization recorded as production has not commenced; mineral exploration costs are expensed as incurred. Advancing the project toward S‑K 1300 mineral resources and reserves will require substantial multi‑year expenditures, including drilling and metallurgical testing, environmental and engineering studies, indigenous and community engagement, permitting and pre‑feasibility and feasibility studies. The timing, scope and outcome of these activities—and the ultimate development decision—will materially affect our long‑term financial profile and capital needs.

Current report

The Hoidas Lake dispositions require annual exploration expenditures of CDN$15 per hectare in each of years two through ten following staking, and CDN$25 per hectare thereafter. The property is also subject to a 1.8% net smelter return royalty, capped at an aggregate CDN$1.0 million payable quarterly from gross revenue once commercial production is reached.

Current report

Public Company and Regulatory Costs

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As a Nasdaq‑listed reporting company, we expect to incur substantial incremental costs for SEC reporting, Sarbanes‑Oxley compliance, internal control over financial reporting, investor relations, D&O insurance, board fees and external audit, legal and other professional services. Our operations are also subject to U.S. and Canadian laws and regulations governing mining, environmental protection, occupational health and safety, export controls (including defense‑related materials and technology) and anti‑corruption. Compliance is integral to our cost base; changes in these laws and regulations could materially affect our business.

Previous report

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 report

We believe the Blackbox System is a unique and disruptive financial technology platform combining proprietary analytics and broadcast enabled social media to connect traders of all types worldwide on an intuitive, user-friendly system. The complexity of our backend analytics is neatly hidden from the end user by our simple and easy to navigate dashboard which includes real-time alerts, scanners, financial news, institutional grade charting and proprietary analytics.

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We launched the Blackbox System web application for domestic use and made it available to subscribers in September 2016. Subscriptions for the use of the Blackbox System web application are currently sold on a monthly and/or annual subscription basis to individual consumers through our website at https://blackboxstocks.com.

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Our principal office is located at 5430 LBJ Freeway, Suite 1485, Dallas, Texas 75240 and our telephone number is (972) 726-9203. Our Common Stock is quoted on the Nasdaq Stock Market LLC (the “Nasdaq”) under the symbol “BLBX.” Our corporate website is located at https://blackboxstocks.com. We are not including the information contained in our website as part of, or incorporating it by reference into, this Report on Form 10-Q.

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Basis of Presentation

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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, 2025, the Company incurred an operating loss of $2,470,009 and a net loss of $2,819,009. 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 $2,649,753 for the nine months ended September 30, 2025, and $705,725 for the year ended December 31, 2024. The Company had cash of $93,186 as of September 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.

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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 “FNL Purchase Agreement”). The FNL 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.

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The Company has historically been able to raise capital in order to fund its operations and on January 31, 2025, the Company filed a shelf registration statement on Form S-3 for the sale of up to $50,000,000 of securities. Pursuant to General Instruction I.B.6 of Form S-3, in no event will we sell securities in a primary offering with a value exceeding more than one-third of our public float in any 12-month period so long as our public float remains below $75,000,000. There can be no assurance that the Company will be able to raise any capital or on acceptable terms.

Previous report

On July 1, 2025 the Company entered into an At-The-Market Issuance Sales Agreement (the “ATM Agreement”) with Alexander Capital, L.P. (“Alexander Capital”). Pursuant to the ATM Agreement, the Company may from time to time issue and sell to or through Alexander Capital, acting as the Company’s sales agent, shares of the Company’s common stock having an aggregate offering price of up to $5,795,000. Sales of the shares are to be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”). As sales agent, Alexander Capital will offer the shares at prevailing market prices and will use its commercially reasonable efforts, consistent with its sales and trading practices, to sell on the Company’s behalf all of the Shares requested to be sold by the Company, subject to the terms and conditions of the ATM Agreement. As of October 15, 2025, the Company has raised gross proceeds of $1,445,712 from the ATM Agreement.

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The financial statements do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation.

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Significant Accounting Policies

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There have been no changes from the Summary of Significant Accounting Policies described in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on March 21, 2025.

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At September 30, 2025, we had cash totaling $93,186 as compared to cash totaling $17,036 at December 31, 2024. Our cash flows used in operations were $2,649,753 for the nine months ended September 30, 2025, as compared to $381,353 for the nine months ended September 30, 2024. 2024 cash flows from operations included $1,518,000 in cash flows from financial support provided by Evtec Aluminium Limited (“Evtec”) in connection with the transaction contemplated by our Share Exchange Agreement which was terminated in January 2025.

Previous report

Net cash used in investing activities was $0 and $1,096,697 for the nine months ended September 30, 2025 and 2024 respectively. Investing cash flows for the 2024 period included $1,100,000 for the issuance of a convertible note to Evtec. We do not expect investing activities to require significant capital in the next twelve months.

Previous report

Net cash provided by financing activities was $2,725,903 for the nine months ended September 30, 2025, as compared to $1,366,274 for the prior year period. The 2025 financing activity cash flow was primarily due to proceeds from the sale and issuance of our Additional Debenture to FNL in the amount of $2,050,000 and issuances under our ATM Agreement resulting in proceeds of $1,036,645 after deducting transaction costs which were partially offset by 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. Under the terms of the FNL Purchase Agreement, we may have to utilize up to 50% of the proceeds from any sale of securities under our shelf Registration Statement on Form S-3 to repay the outstanding Additional Debenture held by FNL .Pursuant to the Company’s ATM Agreement, it is able to sell up to $5,795,000 of the Company’s common stock of which $1,445,712 has been sold as of October 15, 2025.

Previous report

As noted above, the Company intends to pursue the planned Merger with REalloys, however there can be no assurance that it will be able to complete the Merger or that such Merger 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.

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Comparison of Three Months Ended September 30, 2025 and 2024

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For the three months ended September 30, 2025, our revenue was $696,995, as compared to $647,842, for the three months ended September 30, 2024. The increase in revenue of $49,153 or 7.6% was due to additional revenue generated from the Company’s educational classes. Average subscribers for the three months ended September 30, 2025, was 2,876 as compared to 2,940 for the prior year period. Average monthly revenue per subscriber was $74.68 for the three months ended September 30, 2025, as compared to $73.34 in the prior year period.

Previous report

Cost of revenues for the three months ended September 30, 2025, and 2024 were $322,905 and $293,426, resulting in gross margins of 53.7% and 54.7%, 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.

Previous report

For the three months ended September 30, 2025, operating expenses were $812,980 as compared to $1,088,582 for the same period in 2024, a decrease of $275,602 or 25.3%. Software development costs increased only slightly in the current period to $106,642. Selling, general and administrative expenses decreased from $891,282 for the three months ended September 30, 2024, to $655,904 for the three months ended September 30, 2025. The decrease of $235,378 was primarily driven by lower professional fees and lower stock based compensation in the 2025 period. Advertising and marketing expenses decreased by $43,642 or 47.0% to $49,911 for the three months ended September 30, 2025 from the 2024 period. The Company reduced its advertising expenses as it rolled out new pricing tiers for its products in late September. Instead of offering a single product for either monthly or annual subscriptions, the Company provides subscriptions for Options Basic, Options Plus, Equities Plus or Equities and Options Premium on either a monthly or annual subscription. Pricing for monthly subscriptions range from $59 for Options Basic to $149 for Equities and Options Premium. Annual subscriptions range from $566 to $1,430. Advertising expense is expected to increase in the fourth quarter due to holiday promotions. The Company may incur additional marketing expense in connection with its educational products the during the balance of 2025.

Previous report

Our loss from operations for the three months ended September 30, 2025, was $438,890 as compared to a loss from operations of $734,166 for the prior year period. The $275,602 decrease in the operating loss was primarily due to lower operating expenses as described above.

Previous report

Other income and expense included $55,172 in interest expense primarily related to the FNL debenture issued in 2025 as well as amortization of debt issuance costs of $78,016 related to the FNL debenture and financing costs of $242,529. The Company also recorded a one time gain of $93,000 related to the settlement of the Evtec note and advances. Other income and expense for the quarter ended September 30, 2024 was $46,667 and consisted primarily of financing costs related to merchant cash advances.

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Comparison of Nine months ended September 30, 2025 and 2024

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For the nine months ended September 30, 2025, our revenue was $1,802,856 as compared to $1,981,874, for the nine months ended September 30, 2024. The decline in revenue of $179,118 or 9.0% was due to fewer subscribers in the current year as well as slightly lower revenue per subscriber. Average subscribers for the nine months ended September 30, 2025, was 2,759 as compared to 2,975 for the prior year period. Average monthly revenue per subscriber was $69.48 for the nine months ended September 30, 2025, as compared to $73.93 in the prior year period. The lower average revenue per subscriber was driven by promotional offerings of $29.97 per month offered earlier in 2025.

Previous report

Cost of revenues for the nine months ended September 30, 2025 and 2024 were $1,017,467 and $1,007,401, resulting in gross margins of 43.6% and 49.2%, 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.

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For the nine months ended September 30, 2025, operating expenses were $3,255,398 as compared to $3,397,622 for the same period in 2024, a decrease of $142,224 or 4.2%. Software development costs of $315,534 for the nine months ended September 30, 2025 were approximately the same as the prior year. Selling, general and administrative were $2,744,695 for the nine months ended September 30, 2025, as compared to $2,735,480 for the nine months ended September 30, 2024. Advertising and marketing expenses decreased by $146,853 or 43.5% from $337,227 for the nine months ended September 30, 2024, to $190,434 for the nine months ended September 30, 2025, as the Company continues to reposition its marketing strategy including the introduction of new pricing tiers as described above. The Company may incur additional marketing expense in connection with its educational products the during the balance of 2025.

Previous report

Our loss from operations for the nine months ended September 30, 2025, was $2,470,009 as compared to a loss from operations of $2,423,049 for the prior year period. The increase in the loss from operations of $46,960 was due to lower gross profits which were largely offset by lower operating expenses as discussed above.

Previous report

Other income and expense for the nine months ended September 30, 2025 was $349,000. Interest and amortization of debt issuance costs relating primarily to the debentures totaling $265,292 and other financing costs of $335,254 were partially offset by other income relating to employee retention credits of $158,546 and a gain from the settlement of the Evtec note and advance of $93,000. Other expenses for the nine months ended September 30, 2024 consisted primarily of financing costs related to merchant cash advances of 69,621 and a loss on disposition of assets of $29,940.

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EBITDA (Non-GAAP Financial Measure)

Previous report

We report our financial results in accordance with accounting principles generally accepted in the United States of America (“GAAP”). However, management believes the presentation of certain non-GAAP financial measures provides useful information to management and investors regarding financial and business trends relating to the Company’s financial condition and results of operations, and that when GAAP financial measures are viewed in conjunction with the non-GAAP financial measures, investors are provided with a more meaningful understanding of the Company’s ongoing operating performance. In addition, these non-GAAP financial measures are among the primary indicators management uses (i) to compare operating performance on a consistent basis, (ii) for planning purposes including the preparation of its internal annual operating budget and (iii) as a basis for evaluating performance. For all non-GAAP financial measures in this release, we have provided corresponding GAAP financial measures for comparative purposes in the report.

Previous report

EBITDA is defined by us as net income (loss) before interest expense, income tax, depreciation and amortization expense and certain non-cash. EBITDA is not a measure of operating performance under GAAP and therefore should not be considered in isolation nor construed as an alternative to operating profit, net income (loss) or cash flows from operating, investing or financing activities, each as determined in accordance with GAAP. Also, EBITDA should not be considered as a measure of liquidity. Moreover, since EBITDA is not a measurement determined in accordance with GAAP, and thus is susceptible to varying interpretations and calculations, EBITDA, as presented, may not be comparable to similarly titled measures presented by other companies.

Previous report

The following table sets forth a reconciliation of net loss to EBITDA: