blkbx20210930

blkbx20210930_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended

September 30, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File No.

001-41051

BLACKBOXSTOCKS INC.

(Exact name of registrant as specified in its charter)

Nevada	45-3598066
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5430 LBJ Freeway, Suite 1485, Dallas, Texas	75240
(Address of principal executive offices)	(Zip Code)

(972) 726-9203

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	BLBX	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐

Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s Common Stock as of November 11, 2021 was 10,525,323.

Table of Contents

TABLE OF CONTENTS


		Page
INTRODUCTORY COMMENT		1
CAUTION REGARDING FORWARD LOOKING STATEMENTS		1

PART I –FINANCIAL INFORMATION		2
Item 1.	Financial Statements	2
	Balance Sheets as of September 30, 2021 (Unaudited) and December 31, 2020	2
	Statements of Operations for the Three and Nine Months Ended September 30, 2021 and 2020 (Unaudited)	3
	Statement of Stockholders’ Deficit for the Nine Months Ended September 30, 2021 and 2020 (Unaudited)	4
	Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020 (Unaudited)	5
	Notes to Financial Statements for the Three and Nine Months Ended September 30, 2021 and 2020	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	13
Item 4.	Controls and Procedures	13

PART II – OTHER INFORMATION		14
Item 1.	Legal Proceedings	14
Item 1A.	Risk Factors	14
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	14
Item 3.	Defaults Upon Senior Securities	14
Item 4.	Mine Safety Disclosures	14
Item 5.	Other Information	14
Item 6.	Exhibits	15

SIGNATURES		15

Table of Contents

INTRODUCTORY COMMENT

Throughout this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “Blackboxstocks,” or the “Company” refers to Blackboxstocks Inc., a Nevada corporation.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Our prospects are subject to uncertainties and risks. In this Quarterly Report on Form 10-Q (the “Report”), we make forward-looking statements that involve substantial uncertainties and risks. When used in this Report, the words “may,” “will,” “expect,” “anticipate,” “continue,” “estimate,” “intend,” and similar expressions are intended to identify forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) regarding events, conditions and financial trends which may affect our future plans of operations, business strategy, operating results and financial position. Such statements are not guarantees of future performance and are subject to risks and uncertainties described herein and actual results may differ materially from those included within the forward-looking statements. Additional factors are described in our other public reports and filings with the Securities and Exchange Commission (the “SEC”). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. We undertake no obligation to publicly release the result of any revision of these forward-looking statements to reflect events or circumstances after the date they are made or to reflect the occurrence of unanticipated events.

This Report contains certain estimates and plans related to us and the industry in which we operate, which assume certain events, trends and activities will occur and the projected information based on those assumptions. We do not know that all of our assumptions are accurate. If our assumptions are wrong about any events, trends and activities, then our estimates for future growth for our business may also be wrong. There can be no assurance that any of our estimates as to our business growth will be achieved.

The following discussion and analysis should be read in conjunction with our financial statements and the notes associated with them contained elsewhere in this Report. This discussion should not be construed to imply that the results discussed in this Report will necessarily continue into the future or that any conclusion reached in this Report will necessarily be indicative of actual operating results in the future. The discussion represents only the best assessment of management.

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Blackboxstocks Inc.

Balance Sheets

As of September 30, 2021 (Unaudited) and December 31, 2020

	September 30,			December 31
	2021			2020
*Assets*
Current assets:
Cash	$	420,400		$	972,825
Accounts receivable, net of allowance for doubtful accounts of $68,589 at September 30, 2021 and December 31, 2020, respectively		16,698			17,990
Inventory		23,457			17,661
Other current assets		1,804			-
Prepaid expenses		112,914			44,643
Prepaid expenses, related party (Note 5)		36,700			36,700
Total current assets		611,973			1,089,819

Property and equipment:
Office, computer and related equipment, net of depreciation of $76,426 and $61,961 at September 30, 2021 and December 31, 2020, respectively		51,827			5,682
Right of use lease, net of amortization of $135,029 and $97,725 at September 30, 2021 and December 31, 2020, respectively		414,070			62,348
Total property and equipment		465,897			68,030

Total assets	$	1,077,870		$	1,157,849

*Liabilities and Stockholders' Deficit*

Current liabilities:
Accounts payable	$	533,782		$	352,545
Accrued interest		6,296			10,425
Unearned subscriptions		773,139			1,016,157
Lease liability right of use, current		60,092			40,473
Other liabilities		-			180,000
Senior secured note payable, current		10,000			10,000
Convertible notes payable, net of discount of $-0- and $194,267 at September 30, 2021 and December 31, 2020, respectively (Note 7)		35,220			257,150
Notes payable (Note 7)		96,795			131,605
Notes payable, related party (Note 7)		-			859
Total current liabilities		1,515,324			1,999,214

Long term liabilities:
Senior secured note payable, long term, net of debt issuance costs of $59,911 and $99,852 at September 30, 2021 and December 31, 2020, respectively		930,089			890,148
Lease liability right of use, long term		353,978			26,241
Total long term liabilities		1,284,067			916,389

Commitments and contingencies (Note 8)

Stockholders' deficit
Preferred stock, $0.001 par value, 5,000,000 shares authorized; no shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively		-			-
Series A Convertible Preferred Stock, $0.001 par value, 5,000,000 shares authorized; 3,269,998 and 5,000,000 issued and outstanding at September 30, 2021 and December 31, 2020, respectively		3,270			5,000
Common stock, $0.001 par value, 100,000,000 shares authorized: 10,320,879 and 8,410,386 issued and outstanding at September 30, 2021 and December 31, 2020, respectively		10,321			8,410
Common stock, subscribed		-			12,500
Additional paid in capital		6,186,463			5,401,154
Accumulated deficit		(7,921,575	)		(7,184,818	)
Total stockholders' deficit		(1,721,521	)		(1,757,754	)

Total liabilities and stockholders' deficit	$	1,077,870		$	1,157,849

The accompanying notes are an integral part of these financial statements.

Table of Contents

Blackboxstocks Inc.

Statements of Operations

For the Three and Nine Months Ended September 30, 2021 and 2020

(Unaudited)

	For the three months ended						For the nine months ended
	September 30,						September 30,
	2021			2020			2021			2020
Revenue:
Subscriptions	$	1,466,363		$	1,093,245		$	4,412,536		$	2,306,094
Other revenues		5,451			7,084			12,552			18,334
Total revenues		1,471,814			1,100,329			4,425,088			2,324,428

Cost of revenues		469,601			288,213			1,274,953			700,723

Gross margin		1,002,213			812,116			3,150,135			1,623,705

Operating expenses:
Software development costs		111,898			83,705			445,591			175,950
Selling, general and administrative		1,098,427			466,225			2,320,841			1,131,661
Advertising and marketing		286,057			173,559			840,557			404,635
Depreciation and amortization		4,760			3,144			14,465			9,972
Total operating expenses		1,501,142			726,633			3,621,454			1,722,218

Operating income (loss)		(498,929	)		85,483			(471,319	)		(98,513	)

Other (income) expense:
Interest expense		30,281			33,469			104,576			128,229
Convertible note financing		-			-			-			500,469
Gain on derivative liability		-			(10,757	)		-			(1,166,242	)
Default expense		-			-			-			24,750
Amortization of debt discount		10,171			135,482			194,267			250,335
Gain on forgiveness of note payable		(33,405	)		-			(33,405	)		-
Total other (income) expense		7,047			158,194			265,438			(262,459	)

Income (loss) before income taxes		(505,976	)		(72,711	)		(736,757	)		163,946

Income Taxes		-			-			-			-

Net income (loss)		(505,976	)		(72,711	)		(736,757	)		163,946

Weighted average number of common
shares outstanding - basic		9,717,580			8,116,112			8,942,024			8,006,006
shares outstanding - fully diluted											13,084,927

Net income (loss) per share - basic	$	(0.05	)	$	(0.01	)	$	(0.08	)	$	0.02
Net income per share - fully diluted										$	0.01

The accompanying notes are an integral part of these financial statements.

Table of Contents

Blackboxstocks Inc.

Statement of Stockholders’ Deficit

For the Nine Months Ended September 30, 2021 and 2020

(Unaudited)

	Preferred Stock				Series A Preferred Stock				Common Stock				Common Stock			Additional		Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Subscribed			Paid in Capital		Deficit			Total

Balances, December 31, 2019		-	$	-		5,000,000	$	5,000		7,908,231	$	7,908	$	35,060		$	3,443,640	$	(6,829,907	)	$	(3,338,299	)

Issuance of shares in settlement of expenses		-		-		-		-		50,005		50		-			99,950		-			100,000

Net income		-		-		-		-		-		-		-			-		42,829			42,829

Balances, March 31, 2020		-		-		5,000,000		5,000		7,958,236		7,958		35,060			3,543,590		(6,787,078	)		(3,195,470	)

Warrants issued for amendment of convertible notes payable		-		-		-		-		-		-		-			282,693		-			282,693

Net income		-		-		-		-		-		-		-			-		193,828			193,828

Balances, June 30, 2020		-		-		5,000,000		5,000		7,958,236		7,958		35,060			3,826,283		(6,593,250	)		(2,718,949	)

Issuance of shares for cash		-		-		-		-		184,617		185		-			135,971		-			136,156

Issuance of shares in settlement of expenses		-		-		-		-		3,334		3		-			6,497		-			6,500

Issuance of shares in exchange for services		-		-		-		-		25,000		25		-			48,725		-			48,750

Convertible note forbearance extinguishment of derivative liability		-		-		-		-		-		-		-			522,065		-			522,065

Warrants issued for amendment of convertible notes payable		-		-		-		-		-		-		-			371,243		-			371,243

Net loss		-		-		-		-		-		-		-			-		(72,711	)		(72,711	)

Balances, September 30, 2020		-	$	-		5,000,000	$	5,000		8,171,187	$	8,171	$	35,060		$	4,910,784	$	(6,665,961	)	$	(1,706,946	)

Balances, December 31, 2020		-	$	-		5,000,000	$	5,000		8,410,386	$	8,410	$	12,500		$	5,401,154	$	(7,184,818	)	$	(1,757,754	)

Issuance of shares for cash		-		-		-		-		70,772		71		-			137,935		-			138,006

Issuance of subscribed shares		-		-		-		-		6,411		6		(12,500	)		12,494		-			-

Issuance of shares in settlement of liabilities		-		-		-		-		92,308		93		-			179,907		-			180,000

Net income		-		-		-		-		-		-		-			-		12,555			12,555

Balances, March 31, 2021		-		-		5,000,000		5,000		8,579,877		8,580		-			5,731,490		(7,172,263	)		(1,427,193	)

Issuance of in settlement of services		-		-		-		-		11,000		11		-			21,439		-			21,450

Net loss		-		-		-		-		-		-		-			-		(243,336	)		(243,336	)

Balances, June 30, 2021		-		-		5,000,000		5,000		8,590,877		8,591		-			5,752,929		(7,415,599	)		(1,649,079	)

SEC Form 10-Q filed by Blackboxstocks Inc.