Blackboxstocks Announces Financial Results for the Fourth Quarter and Year Ended December 31, 2023
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Insights
The year-over-year decline in total revenue for Blackboxstocks Inc., with a drop from approximately $4.95 million in the previous year to $3.1 million, indicates a substantial contraction in the company's revenue-generating ability. This decrease is a red flag for investors, as it could suggest a weakening market position or competitive disadvantages that the company might be facing. However, the sequential increase in revenue from Q3 to Q4 of 2023 shows some resilience and possibly the beginning of a turnaround, which could be attributed to strategic initiatives.
On the expense side, the reduction in operating expenses and the improvement in adjusted EBITDA from the prior year are positive signs of cost management and operational efficiency. The decrease in net loss, as mentioned by the CFO, may be a result of these cost-cutting measures. The stock-based compensation included in the operating expenses is a non-cash expense that investors should consider when evaluating the company's cash flow situation.
Regarding the acquisition of Evtec, such strategic moves can be double-edged swords. They offer potential for growth and market expansion but come with integration risks and costs. The Share Exchange Agreement with Evtec Aluminum and the equity retention implies a significant strategic shift, which requires careful consideration of the synergies and financial impact on Blackboxstocks' balance sheet post-merger. The mention of SEC and Nasdaq approval is a reminder of the regulatory hurdles that such transactions must clear, which could affect the timeline and final terms of the deal.
The financial technology and social media sectors are highly competitive, with constant innovation required to maintain and grow market share. Blackboxstocks' development of a new product, StockNanny, suggests an attempt to innovate within their niche. The success of this product will depend on its market fit and the effectiveness of its launch strategy in Q2. The strategic marketing partnership mentioned could be a significant lever to boost the company's market presence and drive adoption of both StockNanny and the core Blackbox product.
Investors should also consider the broader market trends, such as the increasing demand for real-time analytics and trading tools, which could play in favor of Blackboxstocks if their offerings align with customer expectations. However, the decline in revenue raises questions about the company's current market strategy and execution. The planned merger with Evtec and the potential strategic partnership must be evaluated in terms of their ability to reposition Blackboxstocks within the market and catalyze a return to revenue growth.
The binding LOI and subsequent Share Exchange Agreement with Evtec are key strategic moves that could redefine Blackboxstocks' business model and market approach. Mergers and acquisitions can provide access to new technologies, markets and customers, which could be the catalyst Blackboxstocks needs to reverse its revenue decline. However, the associated costs, such as the $575,000 in extension fees and the potential $400,000 in working capital, must be weighed against the long-term benefits of the merger.
Investors should scrutinize the 26.7% equity retention in the combined company, as it will dilute current shareholders' stakes but could also be indicative of the value Blackbox perceives in the merger. The success of such a deal will largely depend on the post-merger integration process, the cultural and technological compatibility of the two companies and the ability to realize projected synergies. The mention of late-stage discussions for a strategic marketing partnership also indicates that Blackboxstocks is seeking to enhance its market position through alliances, which is a common post-M&A strategy to maximize the potential of new assets.
Acquisition of Evtec Progressing Toward Closing
DALLAS, April 01, 2024 (GLOBE NEWSWIRE) -- Blackboxstocks Inc. (NASDAQ: BLBX), (“Blackbox” or the “Company”), a financial technology and social media hybrid platform offering real-time proprietary analytics for stock and options traders of all levels, today announced the Company’s financial results for the fourth quarter and year ended December 31, 2023.
Fourth Quarter and Annual Financial and Operating Highlights:
- Total revenue for the fourth quarter of 2023 was
$781,156 as compared to$1,068,158 for the same period in 2022. Revenue for the year ended December 31, 2023 was$3,106,026 as compared to$4,959,109 for the prior year period. - Fourth quarter 2023 revenue increased
7.2% compared to revenue in the third quarter of 2023 of$728,468. - Operating expenses were
$1,397,837 in the fourth quarter of 2023 as compared to$1,717,464 for the same period in 2022. For the year ended December 31, 2023 operating expenses were$6,737,505 as compared to$7,424,256 for the year ended December 31, 2022 and included$971,602 in stock-based compensation. - Executed a binding LOI with Evtec in November of 2023 which resulted in
$575,000 in extension fees and expense reimbursements to Blackbox and up to an additional$400,000 in working capital in March and April of 2024. - Executed a Share Exchange Agreement with Evtec Aluminum whereby Blackbox would retain approximately
26.7% of the equity of the combined company. - Adjusted EBITDA was
$(559,028) and$(1,034,565) for the three months ended December 31, 2023 and 2022, respectively. Adjusted EBITDA for the year ended December 31, 2023 and 2022 was$(3,225,199) and$(4,040,838) , respectively.
Gust Kepler, Chief Executive Officer, commented, “It has been a challenging year for Blackbox as we addressed declining revenue while working to complete the merger with Evtec:
- We have now stabilized the revenue from our core platform and significantly reduced our operating expenses.
- As announced, we executed a Share Exchange Agreement with Evtec Aluminum and intend to acquire Evtec Automotive Ltd./Evtec Group, of which we currently own approximately
13% . We expect to consummate the merger with Evtec Aluminum within the next three months pending SEC and Nasdaq approval. - We are also in late-stage discussions to enter into a strategic marketing partnership with a company in the financial publishing and education sector to leverage and increase the growth of our core Blackbox product.
- We have completed development for our exciting new product StockNanny which we are planning to launch in Q2 of this year.
As we work through multiple strategic and operating initiatives, I am confident that our stockholders will be well rewarded for their faith in our company.”
Robert Winspear, Chief Financial Officer, added, “We are pleased with the continued reduction in our net loss despite the lower revenue and believe the pending merger with Evtec will create substantial value for our stockholders.”
Summary financial data is presented in the tables below. Please see the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 1, 2024 for additional information.
About Blackboxstocks, Inc.
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 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. Blackbox continuously scans the NASDAQ, New York Stock Exchange, CBOE, and all other options markets, analyzing over 10,000 stocks and up to 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 recently introduced a live audio/video feature that allows our members to broadcast on their own channels to share trade strategies and market insight within the Blackbox community. Blackbox is a SaaS company with a growing base of users that spans over 40 countries; current subscription fees are
Safe Harbor Statement
Our prospects here at Blackbox stocks are subject to uncertainties and risks. This press release contains forward-looking statements that involve substantial uncertainties and risks. These forward-looking statements are based upon our current expectations, estimates and projections about our business, and reflect our beliefs and assumptions based upon information available to us at the date of this press release. In some cases, you can identify these statements by words such as “if,” “may,” “might,” “will, “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” and other similar terms. These forward-looking statements include, among other things, plans for proposed operations, descriptions of our strategies, our product and market development plans, and other objectives, expectations and intentions, the trends we anticipate in our business and the markets in which we operate, and the competitive nature and anticipated growth of those markets. We caution readers that forward-looking statements are predictions based on our current expectations about future events. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Our actual results, performance or achievements could differ materially from those expressed or implied by the forward-looking statements as a result of a number of factors including, but not limited to, the risks and uncertainties discussed in our other filings with the Securities Exchange Commission. We undertake no obligation to revise or update any forward-looking statement for any reason.
Disclosure of Non-GAAP Financial Measures
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 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.
We refer to the term “EBITDA” in various places of our financial discussion. EBITDA is defined by us as net income (loss) from continuing operations before interest expense, income tax, depreciation and amortization expense and certain non-cash expenses including stock-based compensation. 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.
Contacts:
PCG Advisory
Jeff Ramson
jramson@pcgadvisory.com
-Tables Follow-
| Blackboxstocks Inc. | ||||||||
| Summary Balance Sheet Data | ||||||||
| As of December 31 2023 and 2022 | ||||||||
| December 31, 2023 | December 31, 2022 | |||||||
| Assets | ||||||||
| Cash | $ | 472,697 | $ | 425,578 | ||||
| Marketable securities | 2,955 | 3,216,280 | ||||||
| Other current assets | 531,837 | 265,197 | ||||||
| Total current assets | $ | 1,007,489 | $ | 3,907,055 | ||||
| Property and equipment, net | $ | 396,651 | $ | 428,726 | ||||
| Investments | 8,424,000 | - | ||||||
| Total assets | $ | 9,828,140 | $ | 4,335,781 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 842,404 | $ | 730,099 | ||||
| Unearned subscriptions | $ | 1,295,514 | $ | 1,022,428 | ||||
| Other current liabilities | $ | 66,431 | $ | 71,615 | ||||
| Note payable, current portion | $ | 28,064 | $ | 28,733 | ||||
| Total current liabilities | $ | 2,232,413 | $ | 1,852,875 | ||||
| Long term liabilities: | ||||||||
| Note payable, net of current portion | $ | 11,550 | $ | 39,614 | ||||
| Lease liability right of use, long term | $ | 287,417 | $ | 265,639 | ||||
| Total long term liabilities | $ | 298,967 | $ | 305,253 | ||||
| Total stockholders' equity | $ | 7,296,760 | $ | 2,177,653 | ||||
| Total liabilities and stockholders' equity | $ | 9,828,140 | $ | 4,335,781 | ||||
| Blackboxstocks Inc. | ||||||||||||||||
| Summary Statements of Operations | ||||||||||||||||
| For the Years Ended December 31, 2023 and 2022 | ||||||||||||||||
| For the three months ended | For the year ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenue | $ | 781,156 | $ | 1,068,158 | $ | 3,106,026 | $ | 4,959,109 | ||||||||
| Cost of revenue | 463,658 | 508,499 | 1,666,192 | 2,080,879 | ||||||||||||
| Gross margin | $ | 317,498 | $ | 559,659 | $ | 1,439,834 | $ | 2,878,230 | ||||||||
| Operating expenses: | 1,397,837 | 1,717,464 | 6,737,505 | 7,424,256 | ||||||||||||
| Operating loss | $ | (1,080,339 | ) | $ | (1,157,805 | ) | $ | (5,297,671 | ) | $ | (4,546,026 | ) | ||||
| Other (income) expense | (382,491 | ) | (4,907 | ) | (633,216 | ) | 473,856 | |||||||||
| Net loss | $ | (697,848 | ) | $ | (1,152,898 | ) | $ | (4,664,455 | ) | $ | (5,019,882 | ) | ||||
| Adjusted EBITDA | $ | (559,028 | ) | $ | (1,034,565 | ) | $ | (3,225,199 | ) | $ | (4,140,195 | ) | ||||
| Adjusted EBITDA Calculation | ||||||||||||||||
| Net loss | $ | (697,848 | ) | $ | (1,152,898 | ) | $ | (4,664,455 | ) | $ | (5,019,882 | ) | ||||
| Adjustments: | ||||||||||||||||
| Depreciation and amortization expense | 11,113 | 6,082 | 43,410 | 22,728 | ||||||||||||
| Interest and financing expense | 111 | 18,976 | 633 | 145,138 | ||||||||||||
| Investment (income) loss | 3,638 | (23,883 | ) | (58,849 | ) | 328,718 | ||||||||||
| Stock based compensation | 123,958 | 117,158 | 1,454,062 | 482,460 | ||||||||||||
| Total adjustments | $ | 138,820 | $ | 118,333 | $ | 1,439,256 | $ | 979,044 | ||||||||
| Adjusted EBITDA | $ | (559,028 | ) | $ | (1,034,565 | ) | $ | (3,225,199 | ) | $ | (4,040,838 | ) | ||||
FAQ
What was Blackboxstocks Inc.'s (BLBX) total revenue for the fourth quarter of 2023?
What was Blackboxstocks Inc.'s (BLBX) revenue for the year ended December 31, 2023?
What was the percentage change in revenue for the fourth quarter of 2023 compared to the third quarter of 2023?
What were Blackboxstocks Inc.'s (BLBX) operating expenses for the fourth quarter of 2023?
What agreements did Blackboxstocks Inc. (BLBX) execute with Evtec?
What was Blackboxstocks Inc.'s (BLBX) Adjusted EBITDA for the three months ended December 31, 2023?
What new product is Blackboxstocks Inc. (BLBX) planning to launch in Q2 of this year?
When does Blackboxstocks Inc. (BLBX) expect to consummate the merger with Evtec Aluminum?
