# Realloys Inc.: Form 10-Q for the period ended Sep 30, 2024

- Company: [Realloys Inc.](/companies/aloy.md) (CIK 1567900)
- Form: 10-Q
- Filed: 2024-11-14
- Accepted by EDGAR: Nov 14, 2024, 15:09 ET
- Period: 2024-09-30
- Accession: 0001437749-24-035252
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1567900/000143774924035252/blkbx20240930_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1567900/000143774924035252/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-07-01 to 2024-09-30 | $647.8k | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Revenue | 9 months, 2024-01-01 to 2024-09-30 | $2.0m | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Cost of revenue | 3 months, 2024-07-01 to 2024-09-30 | $293.4k | us-gaap:CostOfRevenue |
| Cost of revenue | 9 months, 2024-01-01 to 2024-09-30 | $1.0m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2024-07-01 to 2024-09-30 | $354.4k | us-gaap:GrossProfit |
| Gross profit | 9 months, 2024-01-01 to 2024-09-30 | $974.6k | us-gaap:GrossProfit |
| Operating income | 3 months, 2024-07-01 to 2024-09-30 | −$734.2k | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2024-01-01 to 2024-09-30 | −$2.5m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-07-01 to 2024-09-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-01-01 to 2024-09-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-07-01 to 2024-09-30 | −$780.8k | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-01-01 to 2024-09-30 | −$2.5m | us-gaap:NetIncomeLoss |
| Basic EPS | 3 months, 2024-07-01 to 2024-09-30 | −$0.22 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-01-01 to 2024-09-30 | −$0.76 | us-gaap:EarningsPerShareBasic |
| Operating cash flow | 9 months, 2024-01-01 to 2024-09-30 | −$681.4k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-01-01 to 2024-09-30 | $0 | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2024-09-30 | $60.9k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-09-30 | $1.2m | us-gaap:AssetsCurrent |
| Total assets | at 2024-09-30 | $10.0m | us-gaap:Assets |
| Current liabilities | at 2024-09-30 | $3.4m | us-gaap:LiabilitiesCurrent |
| Shareholders' equity | at 2024-09-30 | $6.3m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 16,004 characters.

We urge you to read the following discussion in conjunction with management’s discussion and analysis contained in our Annual Report on Form 10-K for the year ended December 31, 2023, as well as with our financial statements and the notes thereto included elsewhere herein. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed in the section titled “*Risk Factors”* and elsewhere in this Report.

### Overview

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.

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.

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 sold on a monthly and/or annual subscription basis to individual consumers through our website at https://blackboxstocks.com.

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.

### Basis of Presentation

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.

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.

### Significant Accounting Policies

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, 2023, filed with the Securities and Exchange Commission on April 1, 2024.

### Liquidity and Capital Resources

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.

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.

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.

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.

### Results of Operations

### Comparison of Three Months Ended September 30, 2024 and 2023

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.

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%.

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.

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.

### Comparison of Nine months Ended September 30, 2024 and 2023

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.

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%.

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.

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.

### EBITDA (Non-GAAP Financial Measure)

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.

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.

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

|  | Three Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: |
| Net income (loss) | $(780,833) | $(671,745) |
| Adjustments: |  |  |
| Interest expense | 58 | 210 |
| Investment (income) loss | - | (8,934) |
| Depreciation and amortization expense | 2,536 | 11,100 |
| Financing costs | 46,609 | - |
| Stock based compensation | 81,737 | 156,343 |
| Total adjustments | $130,940 | $158,719 |
| EBITDA | $(649,893) | $(513,026) |

|  | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: |
| Net income (loss) | $(2,522,487) | $(3,996,607) |
| Adjustments: |  |  |
| Interest expense | 225 | 522 |
| Investment (income) loss | (348) | (62,487) |
| Depreciation and amortization expense | 13,947 | 32,297 |
| Financing costs | 69,621 | - |
| Stock based compensation | 301,069 | 1,330,104 |
| Total adjustments | $384,514 | $1,300,436 |
| EBITDA | $(2,139,973) | $(2,696,171) |

15

### Off Balance Sheet Arrangements

As of September 30, 2024, we did not have any material off-balance sheet arrangements.

## Market risk

As filed, 168 characters.

We are a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act, and as such, we are not required to provide the information required under this Item.

## Controls and procedures

As filed, 3,307 characters.

### Evaluation of Disclosure Controls and Procedures

Gust Kepler, our principal executive officer and Robert Winspear, our principal financial officer, conducted an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) as of September 30, 2024, pursuant to Exchange Act Rule 13a-15. Such disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based upon that evaluation, our principal executive officer and principal financial officer concluded that the Company's disclosure controls and procedures as of September 30, 2024, were effective as of the end of the period covered by this Quarterly Report

### Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting during the quarter ended September 30, 2024, that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.

### Limitations on the Effectiveness of Controls

Our disclosure controls and procedures provide our principal executive officer and principal financial officer with reasonable assurances that our disclosure controls and procedures will achieve their objectives. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting can or will prevent all human error. A control system, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Furthermore, the design of a control system must reflect the fact that there are internal resource constraints, and the benefit of controls must be weighed relative to their corresponding costs. Because of the limitations in all control systems, no evaluation of controls can provide complete assurance that all control issues and instances of error, if any, within our company are detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur due to human error or mistake. Additionally, controls, no matter how well designed, could be circumvented by the individual acts of specific persons within the organization. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated objectives under all potential future conditions.

## Risk factors

As filed, 906 characters.

Important risk factors that could affect our operations and financial performance, or that could cause results or events to differ from current expectations, are described in Part I, Item 1A, "*Risk Factors”* of our Annual Report on Form 10-K filed with the SEC on April 1, 2024 for the year ended December 31, 2023, as supplemented by the "*Risk Factors*" sections in our registration statement on Form S-1 filed with the SEC on October 5, 2021, as amended on November 5, 2021 and the information contained elsewhere in this Report. The risks and uncertainties described within our Form 10-K for the year ended December 31, 2023 and the registration statement, as amended, are not the only risks we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business or results of operations.

Filed Nov 14, 2024.
Source: SEC EDGAR, the filing index for accession 0001437749-24-035252. Last ingested by Listed: Oct 26, 2026, 17:10 ET. No prices; not investment advice.