UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the quarterly period ended | |
or
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from | to |
| Commission File No. | |
| BLACKBOXSTOCKS INC. |
| (Exact name of registrant as specified in its charter) |
| | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| | |
| (Address of principal executive offices) | (Zip Code) |
| ( |
| (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 |
| | | The |
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.
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).
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 ☐ | |
| | 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
The number of shares outstanding of the registrant’s Common Stock as of August 11, 2022 was
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| Item 1. |
2 | |
| Balance Sheets as of June 30, 2022 and December 31, 2021 (Unaudited) |
2 | |
| Statements of Operations for the Three and Six Months Ended June 30, 2022 and 2021 (Unaudited) |
3 | |
| 4 | ||
| Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021 (Unaudited) |
5 | |
| Notes to Financial Statements for the Three and Six Months Ended June 30, 2022 and 2021 |
6 | |
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
11 |
| Item 3. |
14 | |
| Item 4. |
14 | |
| 15 | ||
| Item 1. |
15 | |
| Item 1A. |
15 | |
| Item 2. |
15 | |
| Item 3. |
16 | |
| Item 4. |
16 | |
| Item 5. |
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| Item 6. |
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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.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Blackboxstocks Inc.
Balance Sheets
As of June 30, 2022 and December 31, 2021
(Unaudited)
| June 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $ at June 30, 2022 and December 31, 2021, respectively | ||||||||
| Inventory | ||||||||
| Marketable securities | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment: | ||||||||
| Office, computer and related equipment, net of depreciation of $ and $ at June 30, 2022 and December 31, 2021, respectively | ||||||||
| Right of use lease, net of amortization of $ and $ at June 30, 2022 and December 31, 2021, respectively | ||||||||
| Total property and equipment | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued interest | ||||||||
| Unearned subscriptions | ||||||||
| Lease liability right of use, current | ||||||||
| Senior secured note payable, net of debt issuance costs of $ and $ at June 30, 2022 and December 31, 2021, respectively (Note 7) | ||||||||
| Note payable, current portion (Note 7) | ||||||||
| Total current liabilities | ||||||||
| Long term liabilities: | ||||||||
| Note payable, net of current portion (Note 7) | ||||||||
| Lease liability right of use, long term | ||||||||
| Total long term liabilities | ||||||||
| Commitments and contingencies (Note 9) | ||||||||
| Stockholders' equity | ||||||||
| Preferred stock, $ par value, shares authorized; shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively | ||||||||
| Series A Convertible Preferred Stock, $ par value, shares authorized; issued and outstanding at June 30, 2022 and December 31, 2021, respectively | ||||||||
| Common stock, $ par value, shares authorized: and issued and outstanding at June 30, 2022 and December 31, 2021, respectively | ||||||||
| Common stock payable | ||||||||
| Treasury stock | ( | ) | ||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders' equity | ||||||||
| Total liabilities and stockholders' equity | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements
Statements of Operations
For the Three and Six Months Ended June 30, 2022 and 2021
(Unaudited)
| For the three months ended | For the six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenue: | ||||||||||||||||
| Subscriptions | $ | $ | $ | $ | ||||||||||||
| Other revenues | ||||||||||||||||
| Total revenues | ||||||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross margin | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Software development costs | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Advertising and marketing | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Other (income) expense: | ||||||||||||||||
| Interest expense | ||||||||||||||||
| Amortization of debt discount and issuance costs | ||||||||||||||||
| Investment loss | ||||||||||||||||
| Total other (income) expense | ||||||||||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income Taxes | ||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Weighted average number of common shares outstanding - basic and diluted | ||||||||||||||||
| Net loss per share - basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
The accompanying notes are an integral part of these financial statements.
Statement of Stockholders’ Equity (Deficit)
For the Three and Six Months Ended June 30, 2022 and 2021
(Unaudited)
|
|
Series A |
|
Common |
Common |
|
Additional |
|
||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Stock | Common Stock | Stock | Stock | Treasury | Paid in | Accumulated | ||||||||||||||||||||||||||||||
| Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Subscribed |
Payable |
Stock |
Capital |
Deficit |
Total |
||||||||||||||||||||||||||
| Balances, December 31, 2020 |
$ | $ | $ | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||
| Issuance of shares for cash, net of fees |
|||||||||||||||||||||||||||||||||||||
| Issuance of subscribed shares |
( |
||||||||||||||||||||||||||||||||||||
| Issuance of shares in settlement of liabilities |
|||||||||||||||||||||||||||||||||||||
| Net loss |
- | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
| Balances, June 30, 2021 |
$ | $ | $ | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||
| Balances, December 31, 2021 |
$ | $ | $ | $ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||||||||
| Purchase of treasury stock |
- | - | - | ( |
( |
) | |||||||||||||||||||||||||||||||
| Cashless exercise of warrants |
( |
) | |||||||||||||||||||||||||||||||||||
| Issuance of warrants for compensation |
- | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of options for compensation |
- | - | - | ||||||||||||||||||||||||||||||||||
| Common stock payable for compensation |
- | - | - | ||||||||||||||||||||||||||||||||||
| Net loss |
- | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
| Balances, June 30, 2022 |
$ | $ | $ | $ | $ | $ | ( |
$ | $ | ( |
) | $ | |||||||||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
Statements of Cash Flows
For the Six Months Ended June 30, 2022 and 2021
(Unaudited)
| June 30, | ||||||||
| 2022 | 2021 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization expense | ||||||||
| Amortization of note discount and issuance costs | ||||||||
| Shares issued in settlement of services | ||||||||
| Stock based compensation | ||||||||
| Right of use lease | ||||||||
| Investment loss | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Inventory | ( | ) | ( | ) | ||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Accounts payable | ||||||||
| Accrued interest | ( | ) | ||||||
| Unearned subscriptions | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Purchase of marketable securities | ( | ) | ||||||
| Sale of marketable securities | ||||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Common stock and warrants issued for cash | ||||||||
| Common stock subscribed | ( | ) | ||||||
| Principal payments on senior secured note payable | ( | ) | ||||||
| Principal payments on notes payable | ( | ) | ( | ) | ||||
| Principal payments on convertible notes payable | ( | ) | ||||||
| Principal payments on notes payable, related parties | ( | ) | ||||||
| Purchase of treasury stock | ( | ) | ||||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Net decrease in cash | $ | ( | ) | $ | ( | ) | ||
| Cash - beginning of period | ||||||||
| Cash - end of period | $ | $ | ||||||
| Supplemental disclosures: | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Common stock issued in settlement of accrued liabilities | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements
For the Three and Six Months Ended June 30, 2022 and 2021
1. Organization
Blackboxstocks Inc. (the “Company”) was incorporated on October 4, 2011 under the laws of the State of Nevada under the name SMSA Ballinger Acquisition Corp. to effect the reincorporation of Senior Management Services of Heritage Oaks at Ballinger, Inc., a Texas corporation, mandated by a Plan of Reorganization confirmed by the United States Bankruptcy Court for the Northern District of Texas for reorganization under Chapter 11 of the United States Bankruptcy Code.
The Company changed its name to Blackboxstocks, Inc. and began operating as a financial technology and social media platform in March 2016. The platform offers real-time proprietary analytics and news for stock and options traders of all levels. The Company believes its 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. The software continuously scans the NASDAQ, New York Stock Exchange, CBOE, and other options markets, analyzing over 10,000 stocks and up to 1,500,000 options contracts multiple times per second. The Company also provides users with a fully interactive social media platform that is integrated into our dashboard, enabling users to exchange information and ideas quickly and efficiently through a common network. The Company has also introduced a live audio/video feature that allows members to broadcast on their own channels to share trade strategies and market insight within the community. The platform was initially made available to subscribers in September 2016. Subscriptions for the use of the platform are sold on a monthly and/or annual subscription basis to individual consumers through the Company website at http://www.blackboxstocks.com.
On November 10, 2021, the Company issued
2. Summary of Significant Accounting Policies
The accompanying interim unaudited financial statements and footnotes of Blackboxstocks Inc. have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions to Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these unaudited consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results of the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 31, 2022. These financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
Earnings or (Loss) Per Share. Basic earnings per share (or loss per share), is computed by dividing the earnings (loss) for the period by the weighted average number of common stock shares outstanding for the period. Diluted earnings per share reflects the potential dilution of securities by including other potentially issuable shares of common stock, including shares issuable upon conversion of convertible securities or exercise of outstanding stock options and warrants, in the weighted average number of common shares outstanding for the period. Because including shares issuable upon conversion of convertible securities and/or exercise of outstanding options and warrants would have an anti-dilutive effect on the loss per share, only the basic earnings (loss) per share is reported in the accompanying financial statements for period of loss.
The Company had total potential additional dilutive securities outstanding at June 30, 2022, as follows:
| June 30, | ||||
| 2022 | ||||
| Series A Convertible Preferred Shares | ||||
| Conversion rate | ||||
| Common shares after conversion | ||||
| Option shares | ||||
| Warrant shares | ||||
3. Marketable Securities
The Company determines the fair values of its financial instruments based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following three levels of inputs may be used to measure fair value:
Level 1 inputs utilize unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access;
Level 2 inputs utilize other-than-quoted prices that are observable, either directly or indirectly and include quoted prices for similar assets and liabilities in active markets, and inputs such as interest rates and yield curves that are observable at commonly quoted intervals; and
Level 3 inputs are unobservable and are typically based on our own assumptions, including situations where there is little, if any, market activity.
The Company’s marketable securities are highly liquid and are quoted on major exchanges and are therefore classified as Level 1 securities. The following table summarizes the Company’s assets that were measured and recognized at fair value as of June 30, 2022:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Balance at December 31, 2021 | $ | $ | $ | $ | ||||||||||||
| Purchases | ||||||||||||||||
| Sales | ( | ) | ( | ) | ||||||||||||
| Change in fair value | ( | ) | ( | ) | ||||||||||||
| Balance at June 30, 2022 | $ | $ | $ | $ | ||||||||||||
4. Stockholders’ Equity
The Company has authorized
Shares of Series A Convertible Preferred Stock (“Series A Stock”) rank pari passu with the Company’s Common Stock with respect to dividend and liquidation rights. Additionally, each share entitles the holder to votes. During 2021,
| ● | If the Company’s Market Capitalization is less than $ |
| ● | If the Company’s Market Capitalization is equal to or greater than $ |
| ● | If the Company’s Market Capitalization is equal to or greater than but less than the outstanding Series A Stock will be convertible into Common Stock on a -for-1 share basis; |
| ● | If the Company’s Market Capitalization is equal to or greater than but less than the outstanding Series A Stock will be convertible into Common Stock on a -for-1 share basis; |
| ● | If the Company’s Market Capitalization is equal to or greater than the outstanding Series A Stock will thereafter convertible into Common Stock pursuant to the Designation Conversion Rights (on a -for-1 share basis). |
The Agreement terminates when the last share of Series A Stock is either converted or the largest Market Capitalization Threshold is met.
On January 4, 2022,
On January 7, 2022, the Company’s Board of Directors authorized a stock repurchase plan for up to $
5. Warrants to Purchase Common Stock
The following table presents the Company’s warrants as of June 30, 2022:
| Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Life (in years) | ||||||||||
| Warrants as of December 31, 2021 | $ | |||||||||||
| Issued | $ | - | ||||||||||
| Exercised | ( | ) | $ | |||||||||
| Warrants as of June 30, 2022 | $ | |||||||||||
At June 30, 2022, warrants for the purchase of
6. Incentive Stock Plan
On August 4, 2021, our Board of Directors created and our stockholders approved the 2021 Blackboxstocks, Inc. Incentive Stock Plan (the “2021 Plan”) which became effective August 31, 2021. We have reserved
In addition,
The following table presents the Company’s options as of June 30, 2022:
| Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Life (in years) | ||||||||||
| Options as of December 31, 2021 | 675,833 | $ | 3.07 | |||||||||
| Issued | $ | |||||||||||
| Forfeited | ( | ) | $ | |||||||||
| Exercised | $ | - | ||||||||||
| Options as of June 30, 2022 | $ | |||||||||||
At June 30, 2022, options to purchase
7. Related Party Transactions
G2 International, Inc. (“G2”), which does business as IPA Tech Group (“IPA”), is a company wholly owned by Gust C. Kepler. As of December 31, 2020, the Company had a prepaid balance of $
8. Debt
Notes Payable
On May 1, 2020, pursuant to the Paycheck Protection Program under the Coronavirus Aid Relief and Economic Security Act (“CARES Act”) the Company was awarded a loan of $
On November 12, 2020, the Company executed a Loan Agreement with certain Lenders (“the Lenders”) and FVP Servicing LLC, as agent for the Lenders in connection with the issuance of a Note in the amount of $
On March 9, 2022 the Company and FVP amended the loan agreement to change the Debt Service Coverage Ratio measurement date from the quarter ended December 31, 2021 to the quarter ending September 30, 2022. The Company was in compliance with all debt covenants at June 30, 2022.
9. Commitments and Contingencies
In August 2017 the Company acquired and was assigned all right, title and interest in an office lease with Teachers Insurance and Annuity Association of America for approximately
The table below shows the future lease payment obligations:
| Year Ending December 31, | Amount | |||
| 2022 | $ | |||
| 2023 | ||||
| 2024 | ||||
| 2025 | ||||
| 2026 | ||||
| Thereafter | ||||
| Total remaining lease payments | $ | |||
| Less: imputed interest | ( | ) | ||
| Present Value of remaining lease payments | $ | |||
| Current | $ | |||
| Noncurrent | $ | |||
| Weighted-average remaining lease term (years) | ||||
| Weighted-average discount rate | % | |||
The Company is not currently a defendant in any material litigation or any threatened litigation that could have a material effect on the Company’s financial statements.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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, 2021 as well as with our condensed financial statements and the notes thereto included elsewhere herein.
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 growing base of users that spans 42 countries.
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 http://www.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 http://www.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.
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 ending December 31, 2021 filed with the Securities and Exchange Commission on March 31, 2022.
Liquidity and Capital Resources
At June 30, 2022, we had cash and marketable securities totaling $7,069,826 as compared to cash and marketable securities totaling $10,442,379 at December 31, 2021. Our cash flows used in operations were ($2,038,532) for the six months ended June 30, 2022 as compared to ($26,192) for the same period in the prior year.
Net cash from investing activities for the six months ended June 30, 2022 was $966,779 as compared to ($54,507) for the prior year period. The volume of marketable securities purchases and sales for the current quarter was the result of trading activity in a Company account that is used to research and test specific trading techniques. The account used for those specific activities had an account balance of approximately $100,000.
Net cash used in financing activities was ($1,019,638) for the six months ended June 30, 2022 as compared to $265,636) for the prior year period. The purchase of $945,449 of common stock pursuant to the Company’s stock repurchase plan was the primary component of the use of cash. The stock repurchase plan initially authorized the repurchase of up to $2,500,000 of the Company’s common stock and expires on December 31, 2022.
On November 9, 2021 the Company enter into an underwriting agreement pursuant to which it sold 2,400,000 shares of its Common Stock at an offering price of $5.00 in an underwritten public offering upon which our shares became listed on the NASDAQ Capital Market. Net proceeds to the Company after underwriting discounts and offering expenses were approximately $10,510,000. We expect to use proceeds from this offering to further develop our Blackbox System platform, expand our product offerings, fund marketing efforts to grow our subscriber base, as well as for general and administration expenses and other general corporate purposes.
We believe that the Company has sufficient capital resources to fund current operations and debt service requirements for the twelve months following the issuance of this report.
Results of Operations
Comparison of Three Months Ended June 30, 2022 and 2021
For the three months ended June 30, 2022 and 2021, our revenue was $1,399,315 and $1,463,606, respectively, a decrease of 4.4%. We believe 2022 revenues continue to be negatively impacted macro-economic factors including poor overall performance in the stock market, high inflation and negative gross domestic product (GDP). The S&P 500 dropped by 20.6% during the six months of 2022. In addition to the poor market performance, inflation of 9.1% as measured by the consumer price index (CPI) and a decline in GDP of (0.9%) may have constricted disposable cash of prospective subscribers. Although we believe that our platform enables our subscribers to profit in both bull and bear markets, we attribute some of our decline in revenues to a higher level of hesitancy resulting from the poor macro-economic data. In order to combat this, we implemented a promotional program offering our software for $5 for the first month in March. This promotional offering was effective in increasing the subscriber totals but only contributed minimal revenue per new user during the end of March and early April. Average users for the three months ended June 30, 2022 was 6,181 as compared to 5,482 for the prior year period and 5,709 for the first quarter ended March 31, 2022. Cost of revenues for the three months ended June 30, 2022 and 2021 were $499,427 and $409,577, resulting in gross margins of 64% and 72%, 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. Cost of goods sold increased by $89,850 for the quarter ended June 30 2022 as compared to the prior year primarily as a result of a 46% increase in the cost of our program moderators, higher costs associated with our new broadcast enabled social media feature and data feeds. As noted above, our promotional event resulted in increased user counts but limited revenue that offset the costs which resulted in a lower gross margin percentage of 64%.
For the three months ended June 30, 2022, operating expenses were $2,068,654 as compared to $1,171,551 for the same period in 2021, an increase of $897,103 or 77%. We experienced significantly higher expenditures in most of our expense categories for the 2022 period. Selling, general and administrative expenses increased from $615,727 for the three months ended June 30, 2021 to $1,191,474 for the three months ended June 30, 2022, an increase of 94%. The increase in selling, general and administrative expenses of $575,747 was the largest dollar value component of the operating expense increase. The primary components of the increase were increases in salary, stock-based compensation and investor and public relations. Advertising and marketing expenses increased by $179,156 or 44% from $347,188 in the three months ended June 30, 2021 to $526,344 in the three months ended June 30, 2022. The June 30, 2022 period included general advertising expense related to television advertising of approximately $153,057 which are more general in nature than the Company’s historical direct marketing campaigns. Software development costs also increased by $141,731 or 70% from $203,255 in the three months ended June 30, 2021 to $344,986 for the three months ended June 30, 2022. The increased software development costs were primarily the result of increased personnel costs and were incurred for improvements to our platform including our online social media component, development of a native application which was released at the end of April and new product development.
.
We expect to continue to incur increases in our operating costs for the foreseeable future. Expense increases for digital advertising and marketing activities, our primary advertising mechanism, should continue to increase with sales but may also increase as a result of additional strategies including but not limited to television advertising. Software development costs are also expected to increase as we expand our development team and invest in new products and features.
Our loss from operations for the three months ended June 30, 2022 was $1,168,766 as compared to a loss from operations of $117,522 for the prior year period. Lower sales and gross margin resulting from the $5 promotion in March of 2022 combined with higher operating expenses resulted in the loss from operations. Non-operating expenses for the three months ended June 30, 2022 were $147,333 as compared to $125,814 for the prior year period.
Comparison of Six Months Ended June 30, 2022 and 2021
For the six months ended June 30, 2022, we generated sales of $2,671,801 as compared to sales of $2,953,274 for the same period in 2021. As noted above, we believe that the macro-economic environment in 2022 has been detrimental to our sales. Our average subscriber count for the first six months of 2022 increased from 5,528 for the six months ended June 30, 2021 to 5,945, an increase of 7.5%. Although the subscriber count was higher for the 2022 period, revenues were lower due to lower average revenues per subscriber, primarily resulting from the March promotion described above. Cost of sales for the six months ended June 30, 2022 were $1,079,389 as compared to $805,352 for the six months ended June 30, 2021. The increase of $274,037 was primarily due to $148,330 of increased costs of our moderators/team traders, $98,250 of additional costs associated with the online social media component of our platform and $4,036 in higher data feed expenses.
For the six months ended June 30, 2022, our operating expenses were $3,782,332 as compared to $2,120,312 for the same period in 2021. Selling general and administrative expenses increased to $2,416,197 for the six months ended June 30, 2022 as compared to $1,222,414 for the same period in 2021, an increase of $1,193,783. The 2022 increase was driven primarily by higher personnel costs which increased by $593,014. In addition, investor relations expense and stock compensation were higher for the six months ended June 30, 2022. Advertising and marketing expense increased to $825,140 for the six months ended June 30, 2022 as compared to $554,500 for the prior year period. The increase of $270,640 was due primarily to the television advertising done in the second quarter as discussed above. Software development costs increased from $333,693 for the six months ended June 30, 2021 to $529,870 for the six months ended June 30, 2022. The increased software development costs were primarily the result of increased personnel costs and were incurred for improvements to our platform including our online social media component, development of a native application which was released at the end of April and new product development.
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 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.
Reconciliation of net loss to EBITDA
| For the three months ended |
For the six months ended |
|||||||||||||||
| June 30, |
June 30, |
|||||||||||||||
| 2022 |
2021 |
2022 |
2021 |
|||||||||||||
| Net loss |
$ | (1,316,099 | ) | $ | (243,336 | ) | $ | (2,558,542 | ) | $ | (230,781 | ) | ||||
| interest |
28,952 | 33,257 | 58,195 | 74,295 | ||||||||||||
| investment loss |
105,067 | - | 283,799 | - | ||||||||||||
| depreciation and amortization |
5,850 | 5,381 | 11,125 | 9,705 | ||||||||||||
| amortization of debt discount |
13,314 | 92,557 | 26,628 | 184,096 | ||||||||||||
| stock compensation |
126,179 | - | 248,212 | - | ||||||||||||
| EBITDA |
$ | (1,036,737 | ) | $ | (112,141 | ) | $ | ( 1,930,583 | ) | $ | 37,315 | |||||
Off Balance Sheet Arrangements
As of June 30, 2022, we did not have any material off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
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.
Item 4. Controls and Procedures
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 June 30, 2022, pursuant to Exchange Act Rule 13a-15. Such disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company is accumulated and communicated to the appropriate management on a basis that permits timely decisions regarding disclosure. Based upon that evaluation, our principal executive officer and principal financial officer concluded that the Company's disclosure controls and procedures as of June 30, 2022, were effective to provide reasonable assurance that information required to be disclosed in the Company’s periodic filings under the Exchange Act is accumulated and communicated to our management to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal controls over financial reporting during the quarter ended June 30, 2022 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.
None.
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 March 31, 2022 for the year ended December 31, 2021, 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, 2021 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.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Securities
There have been no sales of unregistered securities during the period covered by the Report that have not been previously reported as required in Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and/or current reports on Form 8-K.
Use of Proceeds of Registered Securities
On January 7, 2022 the Company’s Board of Directors authorized a stock repurchase plan for up to $2,500,000 of the Company’s Common Stock. The program will terminate on December 31, 2022 or when the $2,500,000 authorized has been fully utilized. As of June 30, 2022, the Company has repurchased 499,028 shares of common stock for an aggregate purchase price of $945,449. This use of proceeds was not anticipated or disclosed in the Company’s prospectus.
Other than as described above, the proceeds of the public offering have been used as described in the prospectus to promote and market our Blackbox System platform and increase our subscriber base, and for general and administration expenses.
Purchases of Equity Securities by Issuer
The following table sets forth information regarding purchases made under the Company’s stock repurchase plan for up to $2,500,000 of the Company’s Common Stock. The program was authorized and publicly announced on January 7, 2022 and will terminate on December 31, 2022 or when the $2,500,000 authorized has been fully utilized.
| Period |
Total Number of Shares Purchased |
Average Price Paid Per Share |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
Maximum Number (or Approximate Dollar Value of Shares that May Yet Be Purchase under the Plans or Programs |
||||||||||||
| April 1, 2022 through April 30, 2022 |
-- | $-- | 436,600 | $1,640,388 | ||||||||||||
| May 1, 2022 through May 31, 2022 |
-- | $-- | 436,600 | $1,640,388 | ||||||||||||
| June 1, 2022 through June 30, 2022 |
62,428 | $1.37 | 499,028 | $1,554,551 | ||||||||||||
| Total |
499,028 | $1.97 | 499,028 | $1,554,551 | ||||||||||||
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
None.
The following exhibits are filed with this Quarterly Report on Form 10-Q or are incorporated by reference as described below.
| Exhibit |
Description |
| 31.1 |
Certification of Principal Executive Officer pursuant to Rule 13a-14a/Rule 14d-14(a)* |
| 31.2 |
Certification of Principal Financial Officer pursuant to Rule 13a-14a/Rule 14d-14(a)* |
| 32.1 |
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350** |
| 32.2 |
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350** |
| 101.1 |
Inline Interactive data files pursuant to Rule 405 of Regulation S-T* |
| 104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
* Filed herewith.
** Furnished herewith
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| August 15, 2022 |
BLACKBOXSTOCKS INC. |
|
| By: |
/s/ Gust Kepler |
|
| Gust Kepler |
||
| President, Chief Executive Officer and Secretary |
||
| (Principal Executive Officer) |
||
| By: |
/s/ Robert Winspear |
|
| Robert Winspear |
||
| Chief Financial Officer and Secretary (Principal Financial |
||
| and Accounting Officer) |
||
EXHIBIT INDEX
| Exhibit |
Description |
| 31.1 |
Certification of Principal Executive Officer pursuant to Rule 13a-14a/Rule 14d-14(a)* |
| 31.2 |
Certification of Principal Financial Officer pursuant to Rule 13a-14a/Rule 14d-14(a)* |
| 32.1 |
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350** |
| 32.2 |
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350** |
| 101.1 |
Inline Interactive data files pursuant to Rule 405 of Regulation S-T* |
| 104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
* Filed herewith.
** Furnished herewith
18
EXHIBIT 31.1
CERTIFICATION PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Gust Kepler, certify that:
|
(1) |
I have reviewed this quarterly report on Form 10-Q of Blackboxstocks Inc.; |
|
(2) |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
(3) |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
(4) |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
|
(5) |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
|
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
|
August 15, 2022 |
/s/ Gust Kepler |
|
Gust Kepler |
|
|
Principal Executive Officer |
EXHIBIT 31.2
CERTIFICATION PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Robert Winspear, certify that:
|
(1) |
I have reviewed this quarterly report on Form 10-Q of Blackboxstocks Inc.; |
|
(2) |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
(3) |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
(4) |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
|
(5) |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
|
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
|
August 15, 2022 |
/s/ Robert Winspear |
|
Robert Winspear |
|
|
Principal Financial Officer |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Blackboxstocks Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2022 (the “Report”), I, Gust Kepler, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
|
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
/s/ Gust Kepler
Gust Kepler
Principal Executive Officer
August 15, 2022
This certification accompanies the Report pursuant to §906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company or purposes of §18 of the Securities Exchange Act of 1934, as amended.
A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Blackboxstocks Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2022 (the “Report”), I, Robert Winspear, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
|
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
/s/ Robert Winspear
Robert Winspear
Principal Financial Officer
August 15, 2022
This certification accompanies the Report pursuant to §906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company or purposes of §18 of the Securities Exchange Act of 1934, as amended.
A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
| Revenues | $ 1,399,315 | $ 1,463,606 | $ 2,671,801 | $ 2,953,274 |
| Cost of revenues | 499,427 | 409,577 | 1,079,389 | 805,352 |
| Gross margin | 899,888 | 1,054,029 | 1,592,412 | 2,147,922 |
| Operating expenses: | ||||
| Software development costs | 344,986 | 203,255 | 529,870 | 333,693 |
| Selling, general and administrative | 1,191,474 | 615,727 | 2,416,197 | 1,222,414 |
| Advertising and marketing | 526,344 | 347,188 | 825,140 | 554,500 |
| Depreciation and amortization | 5,850 | 5,381 | 11,125 | 9,705 |
| Total operating expenses | 2,068,654 | 1,171,551 | 3,782,332 | 2,120,312 |
| Operating income (loss) | (1,168,766) | (117,522) | (2,189,920) | 27,610 |
| Other (income) expense: | ||||
| Interest expense | 28,952 | 33,257 | 58,195 | 74,295 |
| Amortization of debt discount and issuance costs | 13,314 | 92,557 | 26,628 | 184,096 |
| Investment loss | 105,067 | 0 | 283,799 | 0 |
| Total other (income) expense | 147,333 | 125,814 | 368,622 | 258,391 |
| Loss before income taxes | (1,316,099) | (243,336) | (2,558,542) | (230,781) |
| Income Taxes | 0 | 0 | 0 | 0 |
| Net loss | $ (1,316,099) | $ (243,336) | $ (2,558,542) | $ (230,781) |
| Weighted average number of common shares outstanding - basic and diluted (in shares) | 13,185,659 | 8,581,448 | 13,183,750 | 8,547,758 |
| Net loss per share - basic and diluted (in dollars per share) | $ (0.10) | $ (0.03) | $ (0.19) | $ (0.03) |
| Subscription and Circulation [Member] | ||||
| Revenues | $ 1,395,624 | $ 1,460,375 | $ 2,666,554 | $ 2,946,173 |
| Product and Service, Other [Member] | ||||
| Revenues | $ 3,691 | $ 3,231 | $ 5,247 | $ 7,101 |
Statement of Stockholders' Equity (Deficit) (Unaudited) - USD ($) |
Warrants Issued for Compensation [Member]
Common Stock Payable [Member]
|
Warrants Issued for Compensation [Member]
Additional Paid-in Capital [Member]
|
Warrants Issued for Compensation [Member]
Retained Earnings [Member]
|
Warrants Issued for Compensation [Member] |
Preferred Stock [Member] |
Preferred Stock Outstanding [Member]
Series A Preferred Stock [Member]
|
Common Stock [Member] |
Common Stock, Subscribed [Member] |
Common Stock Payable [Member] |
Treasury Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Total |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance (in shares) at Dec. 31, 2020 | 0 | 5,000,000 | 8,410,386 | ||||||||||
| Balance at Dec. 31, 2020 | $ 0 | $ 5,000 | $ 8,410 | $ 12,500 | $ 0 | $ 0 | $ 5,401,154 | $ (7,184,818) | $ (1,757,754) | ||||
| Issuance of shares for cash, net of fees (in shares) | 0 | 0 | 70,772 | ||||||||||
| Issuance of shares for cash, net of fees | $ 0 | $ 0 | $ 71 | 0 | 0 | 0 | 137,935 | 0 | 138,006 | ||||
| Issuance of subscribed shares (in shares) | 0 | 0 | 6,411 | ||||||||||
| Issuance of subscribed shares | $ 0 | $ 0 | $ 6 | (12,500) | 0 | 0 | 12,494 | 0 | 0 | ||||
| Issuance of shares in settlement of liabilities (in shares) | 0 | 0 | 103,308 | ||||||||||
| Issuance of shares in settlement of liabilities | $ 0 | $ 0 | $ 104 | 0 | 0 | 0 | 201,346 | 0 | 201,450 | ||||
| Net loss | $ 0 | $ 0 | $ 0 | 0 | 0 | 0 | 0 | (230,781) | (230,781) | ||||
| Balance (in shares) at Jun. 30, 2021 | 0 | 5,000,000 | 8,590,877 | ||||||||||
| Balance at Jun. 30, 2021 | $ 0 | $ 5,000 | $ 8,591 | 0 | 0 | 0 | 5,752,929 | (7,415,599) | (1,649,079) | ||||
| Balance (in shares) at Dec. 31, 2021 | 0 | 3,269,998 | 13,099,272 | ||||||||||
| Balance at Dec. 31, 2021 | $ 0 | $ 3,270 | $ 13,099 | 0 | 15,000 | 0 | 17,586,635 | (9,800,554) | 7,817,450 | ||||
| Net loss | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (2,558,542) | (2,558,542) | ||||
| Purchase of treasury stock | $ 0 | $ 0 | $ 0 | 0 | 0 | (945,449) | 0 | 0 | (945,449) | ||||
| Cashless exercise of warrants (in shares) | 0 | 0 | 86,387 | ||||||||||
| Cashless exercise of warrants | $ 0 | $ 0 | $ 87 | 0 | 0 | 0 | (87) | 0 | 0 | ||||
| Issuance of warrants | $ 0 | $ 63,760 | $ 0 | $ 63,760 | 0 | 0 | 0 | 0 | 0 | ||||
| Issuance of options for compensation | 0 | 0 | 0 | 0 | 0 | 0 | 169,452 | 0 | 169,452 | ||||
| Common stock payable for compensation | $ 0 | $ 0 | $ 0 | 0 | 15,000 | 0 | 0 | 0 | 15,000 | ||||
| Balance (in shares) at Jun. 30, 2022 | 0 | 3,269,998 | 13,185,659 | ||||||||||
| Balance at Jun. 30, 2022 | $ 0 | $ 3,270 | $ 13,186 | $ 0 | $ 30,000 | $ (945,449) | $ 17,819,760 | $ (12,359,096) | $ 4,561,671 |
Note 1 - Organization |
6 Months Ended |
|---|---|
Jun. 30, 2022 | |
| Notes to Financial Statements | |
| Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] |
1. Organization
Blackboxstocks Inc. (the “Company”) was incorporated on October 4, 2011 under the laws of the State of Nevada under the name SMSA Ballinger Acquisition Corp. to effect the reincorporation of Senior Management Services of Heritage Oaks at Ballinger, Inc., a Texas corporation, mandated by a Plan of Reorganization confirmed by the United States Bankruptcy Court for the Northern District of Texas for reorganization under Chapter 11 of the United States Bankruptcy Code.
The Company changed its name to Blackboxstocks, Inc. and began operating as a financial technology and social media platform in March 2016. The platform offers real-time proprietary analytics and news for stock and options traders of all levels. The Company believes its 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. The software continuously scans the NASDAQ, New York Stock Exchange, CBOE, and other options markets, analyzing over 10,000 stocks and up to 1,500,000 options contracts multiple times per second. The Company also provides users with a fully interactive social media platform that is integrated into our dashboard, enabling users to exchange information and ideas quickly and efficiently through a common network. The Company has also introduced a live audio/video feature that allows members to broadcast on their own channels to share trade strategies and market insight within the community. The platform was initially made available to subscribers in September 2016. Subscriptions for the use of the platform are sold on a monthly and/or annual subscription basis to individual consumers through the Company website at http://www.blackboxstocks.com.
On November 10, 2021, the Company issued 2,400,000 shares of Common Stock in its initial public offering and concurrently was listed on the Nasdaq Capital Market (“Nasdaq”) under the symbol “BLBX”. |
Note 2 - Summary of Significant Accounting Policies |
6 Months Ended | |||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||
| Significant Accounting Policies [Text Block] |
2. Summary of Significant Accounting Policies
The accompanying interim unaudited financial statements and footnotes of Blackboxstocks Inc. have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions to Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these unaudited consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results of the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 31, 2022. These financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
Use of Estimates. The Company’s financial statement preparation requires that management make estimates and assumptions which affect the reporting of assets and liabilities and the related disclosure of contingent assets and liabilities in order to report these financial statements in conformity with GAAP. Actual results could differ from those estimates.
Cash. Cash includes all highly liquid investments that are readily convertible to known amounts of cash and have original maturities at the date of purchase of three months or less.
Investments in Marketable Securities. The Company has invested in marketable securities which primarily consist of investments in mutual funds that hold commercial and government debt securities. These investments are recorded at fair value based on quoted prices at the end of the Company’s reporting period. Any realized or unrealized gains or losses are recognized in the accompanying statements of operations.
Recently Issued Accounting Pronouncements. During the period ended June 30, 2022, there were no new accounting pronouncements issued that management believes the adoption of which will have a material impact on the Company’s financial statements.
Earnings or (Loss) Per Share. Basic earnings per share (or loss per share), is computed by dividing the earnings (loss) for the period by the weighted average number of common stock shares outstanding for the period. Diluted earnings per share reflects the potential dilution of securities by including other potentially issuable shares of common stock, including shares issuable upon conversion of convertible securities or exercise of outstanding stock options and warrants, in the weighted average number of common shares outstanding for the period. Because including shares issuable upon conversion of convertible securities and/or exercise of outstanding options and warrants would have an anti-dilutive effect on the loss per share, only the basic earnings (loss) per share is reported in the accompanying financial statements for period of loss.
The Company had total potential additional dilutive securities outstanding at June 30, 2022, as follows:
Revenue Recognition. We operate under a software as a service (SaaS) model whereby we sell monthly and annual subscriptions allowing subscribers access to our platform. We recognize revenue over the subscription period (either monthly or annual) and record cash received but not yet earned as deferred revenue on our balance sheet. Additionally, the Company receives revenues from commissions and the sale of promotional products which are presented as other revenues on the accompanying statements of operations. Commission revenues are recognized as they are earned and revenues from the sale of promotional products are recognized upon shipment. |
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Note 3 - Marketable Securities |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] |
3. Marketable Securities
The Company determines the fair values of its financial instruments based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following three levels of inputs may be used to measure fair value:
Level 1 inputs utilize unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access;
Level 2 inputs utilize other-than-quoted prices that are observable, either directly or indirectly and include quoted prices for similar assets and liabilities in active markets, and inputs such as interest rates and yield curves that are observable at commonly quoted intervals; and
Level 3 inputs are unobservable and are typically based on our own assumptions, including situations where there is little, if any, market activity.
The Company’s marketable securities are highly liquid and are quoted on major exchanges and are therefore classified as Level 1 securities. The following table summarizes the Company’s assets that were measured and recognized at fair value as of June 30, 2022:
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Note 4 - Stockholders' Equity |
6 Months Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | ||||||||||||||||
| Notes to Financial Statements | ||||||||||||||||
| Stockholders' Equity Note Disclosure [Text Block] |
4. Stockholders’ Equity
The Company has authorized 10,000,000 shares of preferred stock at $0.001 par value, 5,000,000 of which are designated as “Series A Convertible Preferred Stock” at $0.001 par value and 100,000,000 authorized shares of common stock at $0.001 par value (“Common Stock”).
Shares of Series A Convertible Preferred Stock (“Series A Stock”) rank pari passu with the Company’s Common Stock with respect to dividend and liquidation rights. Additionally, each share entitles the holder to votes. During 2021, 1,730,002 previously issued and outstanding shares of the Series A Stock were converted into Common Stock. All currently issued and outstanding shares of the Series A Stock are held by Gust Kepler, the Company’s Chairman and Chief Executive Officer (“Mr. Kepler”). The Company and Mr. Kepler entered into Conversion Rights Agreement dated effective as of October 14, 2021, limiting the rights of the holder(s) of our outstanding shares of Series A Stock to convert such shares into Common Stock on a -for-1 basis as provided for in the Certificate of Designation of the Series A Stock (the “Designation Conversion Rights”). Pursuant to the terms of the Conversion Rights Agreement, the Designation Conversion Rights are limited and exercisable based upon the Company reaching the following market capitalization thresholds, measured on the last day of each calendar quarter:
The Agreement terminates when the last share of Series A Stock is either converted or the largest Market Capitalization Threshold is met.
On January 4, 2022, 86,387 shares of common stock were issued for the cashless exercise of a warrant for the purchase of 120,000 shares (Note 5).
On January 7, 2022, the Company’s Board of Directors authorized a stock repurchase plan for up to $2,500,000 of the Company’s common stock. The program will terminate on December 31, 2022, or when the $2,500,000 authorized has been fully utilized. As of June 30, 2022, the Company has repurchased 499,028 shares for an aggregate purchase price of $945,449. |
Note 5 - Warrants to Purchase Common Stock |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement [Text Block] |
5. Warrants to Purchase Common Stock
The following table presents the Company’s warrants as of June 30, 2022:
At June 30, 2022, warrants for the purchase of 366,116 shares were vested and warrants for the purchase of 72,220 shares remained unvested. The Company expects to incur expenses for the unvested warrants totaling $276,296 as they vest. |
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Note 6 - Incentive Stock Plan |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement [Text Block] |
5. Warrants to Purchase Common Stock
The following table presents the Company’s warrants as of June 30, 2022:
At June 30, 2022, warrants for the purchase of 366,116 shares were vested and warrants for the purchase of 72,220 shares remained unvested. The Company expects to incur expenses for the unvested warrants totaling $276,296 as they vest. |
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| Share-Based Payment Arrangement, Option [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement [Text Block] |
6. Incentive Stock Plan
On August 4, 2021, our Board of Directors created and our stockholders approved the 2021 Blackboxstocks, Inc. Incentive Stock Plan (the “2021 Plan”) which became effective August 31, 2021. We have reserved 750,000 of our outstanding shares of our common stock for issuance under the 2021 Plan. The 2021 Plan allows the Company, under the direction of the Board of Directors or a committee thereof, to make grants of stock options, restricted and unrestricted stock and other stock-based awards to employees, including our executive officers, consultants and directors.
In addition, 6,048 shares of restricted common stock were granted on September 11, 2021 with 25% vesting at issuance and the remaining shares vesting quarterly over nine months. As of June 30, 2022, all 6,048 of the restricted common stock shares have vested and are included in common stock payable.
The following table presents the Company’s options as of June 30, 2022:
At June 30, 2022, options to purchase 237,450 shares were vested and options to purchase 453,717 shares remained unvested. The Company expects to incur expenses for the unvested options totaling $643,370 as they vest. |
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Note 7 - Related Party Transactions |
6 Months Ended |
|---|---|
Jun. 30, 2022 | |
| Notes to Financial Statements | |
| Related Party Transactions Disclosure [Text Block] |
7. Related Party Transactions
G2 International, Inc. (“G2”), which does business as IPA Tech Group (“IPA”), is a company wholly owned by Gust C. Kepler. As of December 31, 2020, the Company had a prepaid balance of $36,700 for public relations and marketing services with G2/IPA. These funds were utilized during the year ended December 31, 2021. |
Note 8 - Debt |
6 Months Ended |
|---|---|
Jun. 30, 2022 | |
| Notes to Financial Statements | |
| Debt Disclosure [Text Block] |
8. Debt
Notes Payable
On May 1, 2020, pursuant to the Paycheck Protection Program under the Coronavirus Aid Relief and Economic Security Act (“CARES Act”) the Company was awarded a loan of $130,200. The loan carries an interest rate of 1% and had an initial maturity of May 1, 2022. During August 2021, the Company received partial loan forgiveness from the SBA reducing the principal balance of the note to $96,795. During December 2021, the terms of the note were amended to extend the maturity to May 4, 2025. As of June 30, 2022 and December 31, 2021, the unpaid balances of the note totaled $82,606 and $96,795, respectively.
On November 12, 2020, the Company executed a Loan Agreement with certain Lenders (“the Lenders”) and FVP Servicing LLC, as agent for the Lenders in connection with the issuance of a Note in the amount of $1,000,000 bearing interest at 12% per annum with an initial maturity of November 12, 2022. Simultaneously, with the execution of the Loan Agreement, the Company also entered into an agreement with an affiliate of FVP to provide certain credit and debit card processing services for the Company, which services will continue for a period of one year after the loan is repaid and contains a right of first refusal to continue to provide such services in the future subject to certain limitations. Mr. Kepler executed a guaranty in favor of FVP in connection with the loan. Proceeds from the loan were used to repay the existing senior secured loan balance of $100,000 along with accrued interest, certain outstanding trade payables in the amount of $133,880 and for general working capital purposes. In addition, the Company granted the Lenders a security interest in substantially all of its assets. As of June 30, 2022 and December 31, 2021, the unpaid balances of the note totaled $930,000 and $990,000, respectively.
On March 9, 2022 the Company and FVP amended the loan agreement to change the Debt Service Coverage Ratio measurement date from the quarter ended December 31, 2021 to the quarter ending September 30, 2022. The Company was in compliance with all debt covenants at June 30, 2022. |
Note 9 - Commitments and Contingencies |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Text Block] |
9. Commitments and Contingencies
In August 2017 the Company acquired and was assigned all right, title and interest in an office lease with Teachers Insurance and Annuity Association of America for approximately 1,502 square feet of office space at 5430 LBJ Freeway, Dallas, Texas. During September 2017 the Company amended the lease to expand its space by approximately 336 square feet for a total of 1,838 square feet and extended the expiration date to September 30, 2022. The Company records rent expense associated with this lease on a straight-line basis in conjunction with the terms of the underlying lease. On February 22, 2021 the Company amended its lease with Teachers Insurance and Annuity Association of America (“TIAA”) to expand its space by approximately 847 square feet for a total of 2,685 square feet and extended the expiration date to September 30, 2025. On April 14, 2021, the Company amended its lease with TIAA extending the lease expiration until September 30, 2028. During the six months ended June 30, 2022, the Company’s office rental expenses totaled approximately $44,700.
The table below shows the future lease payment obligations:
The Company is not currently a defendant in any material litigation or any threatened litigation that could have a material effect on the Company’s financial statements. |
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Significant Accounting Policies (Policies) |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||
| Use of Estimates, Policy [Policy Text Block] | Use of Estimates. The Company’s financial statement preparation requires that management make estimates and assumptions which affect the reporting of assets and liabilities and the related disclosure of contingent assets and liabilities in order to report these financial statements in conformity with GAAP. Actual results could differ from those estimates. | |||||||||||||||||||||||||||||||||||
| Cash and Cash Equivalents, Policy [Policy Text Block] | Cash. Cash includes all highly liquid investments that are readily convertible to known amounts of cash and have original maturities at the date of purchase of three months or less. | |||||||||||||||||||||||||||||||||||
| Marketable Securities, Policy [Policy Text Block] | Investments in Marketable Securities. The Company has invested in marketable securities which primarily consist of investments in mutual funds that hold commercial and government debt securities. These investments are recorded at fair value based on quoted prices at the end of the Company’s reporting period. Any realized or unrealized gains or losses are recognized in the accompanying statements of operations. | |||||||||||||||||||||||||||||||||||
| New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Pronouncements. During the period ended June 30, 2022, there were no new accounting pronouncements issued that management believes the adoption of which will have a material impact on the Company’s financial statements. | |||||||||||||||||||||||||||||||||||
| Earnings Per Share, Policy [Policy Text Block] | Earnings or (Loss) Per Share. Basic earnings per share (or loss per share), is computed by dividing the earnings (loss) for the period by the weighted average number of common stock shares outstanding for the period. Diluted earnings per share reflects the potential dilution of securities by including other potentially issuable shares of common stock, including shares issuable upon conversion of convertible securities or exercise of outstanding stock options and warrants, in the weighted average number of common shares outstanding for the period. Because including shares issuable upon conversion of convertible securities and/or exercise of outstanding options and warrants would have an anti-dilutive effect on the loss per share, only the basic earnings (loss) per share is reported in the accompanying financial statements for period of loss.
The Company had total potential additional dilutive securities outstanding at June 30, 2022, as follows:
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| Revenue from Contract with Customer [Policy Text Block] | Revenue Recognition. We operate under a software as a service (SaaS) model whereby we sell monthly and annual subscriptions allowing subscribers access to our platform. We recognize revenue over the subscription period (either monthly or annual) and record cash received but not yet earned as deferred revenue on our balance sheet. Additionally, the Company receives revenues from commissions and the sale of promotional products which are presented as other revenues on the accompanying statements of operations. Commission revenues are recognized as they are earned and revenues from the sale of promotional products are recognized upon shipment. | |||||||||||||||||||||||||||||||||||
Note 2 - Summary of Significant Accounting Policies (Tables) |
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| Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] |
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Note 3 - Marketable Securities (Tables) |
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| Marketable Securities [Table Text Block] |
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Note 5 - Warrants to Purchase Common Stock (Tables) |
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| Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] |
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Note 6 - Incentive Stock Plan (Tables) |
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| Share-Based Payment Arrangement, Option, Activity [Table Text Block] |
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Note 9 - Commitments and Contingencies (Tables) |
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| Lessee, Operating Lease, Liability, Maturity [Table Text Block] |
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Note 1 - Organization (Details Textual) |
Nov. 10, 2021
shares
|
|---|---|
| Stock Issued During Period, Shares, New Issues (in shares) | 2,400,000 |
Note 2 - Summary of Significant Accounting Policies - Potential Additional Dilutive Securities Outstanding (Details) |
6 Months Ended |
|---|---|
|
Jun. 30, 2022
shares
| |
| Series A Convertible Preferred Shares (in shares) | 3,269,998 |
| Conversion rate | 0.2 |
| Common shares after conversion (in shares) | 654,000 |
| Warrant [Member] | |
| Warrant shares (in shares) | 438,336 |
| Share-Based Payment Arrangement, Nonemployee [Member] | |
| Option shares (in shares) | 691,167 |
Note 3 - Marketable Securities - Summary of Assets Measured at Fair Value By Measurement Input Level (Details) - USD ($) |
6 Months Ended | |
|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
| Balance | $ 8,015,882 | |
| Purchases | 13,753,390 | $ (0) |
| Sales | (14,750,753) | $ 0 |
| Change in fair value | (283,799) | |
| Balance | 6,734,720 | |
| Fair Value, Inputs, Level 1 [Member] | ||
| Balance | 8,015,882 | |
| Purchases | 13,753,390 | |
| Sales | (14,750,753) | |
| Change in fair value | (283,799) | |
| Balance | 6,734,720 | |
| Fair Value, Inputs, Level 2 [Member] | ||
| Balance | 0 | |
| Purchases | 0 | |
| Sales | 0 | |
| Change in fair value | 0 | |
| Balance | 0 | |
| Fair Value, Inputs, Level 3 [Member] | ||
| Balance | 0 | |
| Purchases | 0 | |
| Sales | 0 | |
| Change in fair value | 0 | |
| Balance | $ 0 | |
Note 5 - Warrants to Purchase Common Stock (Details Textual) |
Jun. 30, 2022
USD ($)
shares
|
|---|---|
| Class of Warrant or Right, Number of Securities Called by Warrants or Rights, Vested (in shares) | 366,116 |
| Class of Warrant or Right, Number of Securities Called by Warrants or Rights, Unvested (in shares) | 72,220 |
| Warrant, Nonvested, Cost Not yet Recognized, Amount | $ | $ 276,296 |
Note 5 - Warrants to Purchase Common Stock - Warrant Activity (Details) - $ / shares |
6 Months Ended | 12 Months Ended |
|---|---|---|
Jun. 30, 2022 |
Dec. 31, 2021 |
|
| Warrants outstanding, number of shares (in shares) | 558,336 | |
| Warrants, average remaining life (Year) | 5 years 10 days | 5 years 1 month 2 days |
| Issued, number of shares (in shares) | 0 | |
| Exercised (in shares) | (120,000) | |
| Exercised, average remaining life (Year) | 3 years 3 months 10 days | |
| Exercised, number of shares (in shares) | 438,336 | 558,336 |
| Minimum [Member] | ||
| Warrants, exercise price (in dollars per share) | $ 3.28 | |
| Issued, exercise price (in dollars per share) | 0 | |
| Exercised, exercise price (in dollars per share) | 1.00 | |
| Warrants, exercise price (in dollars per share) | $ 4.18 | $ 3.28 |
Note 6 - Incentive Stock Plan - Option Activity Under Stock Plan (Details) - The 2021 Incentive Stock Plan [Member] - $ / shares |
6 Months Ended | 12 Months Ended |
|---|---|---|
Jun. 30, 2022 |
Dec. 31, 2021 |
|
| Options outstanding, weighted average remaining life (Year) | 9 years 3 months 3 days | 9 years 8 months 8 days |
| Issued (in shares) | 62,000 | |
| Issued, weighted average exercise price (in dollars per share) | $ 2.01 | |
| Issued, weighted average remaining life (Year) | 10 years | |
| Forfeited (in shares) | (46,666) | |
| Forfeited, weighted average exercise price (in dollars per share) | $ 2.99 | |
| Forfeited, weighted average remaining life (Year) | 9 years 2 months 26 days | |
| Exercised (in shares) | 0 | |
| Exercised, weighted average exercise price (in dollars per share) | $ 0 | |
| Outstanding (in shares) | 691,167 | |
| Outstanding, weighted average exercise price (in dollars per share) | $ 2.98 |
Note 7 - Related Party Transactions (Details Textual) |
Dec. 31, 2020
USD ($)
|
|---|---|
| G2 and IPA [Member] | |
| Prepaid Expenses, Related Party, Current | $ 36,700 |
Note 8 - Debt (Details Textual) - USD ($) |
6 Months Ended | |||||
|---|---|---|---|---|---|---|
Nov. 12, 2020 |
May 01, 2020 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
Aug. 31, 2021 |
|
| Repayments of Notes Payable | $ 14,189 | $ 1,405 | ||||
| Paycheck Protection Program CARES Act [Member] | ||||||
| Proceeds from Issuance of Long-term Debt, Total | $ 130,200 | |||||
| Debt Instrument, Interest Rate, Stated Percentage | 1.00% | |||||
| Long-term Debt, Total | $ 96,795 | |||||
| Notes Payable, Noncurrent, Total | 82,606 | $ 96,795 | ||||
| Loan Agreement [Member] | ||||||
| Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||
| Debt Instrument, Face Amount | $ 1,000,000 | |||||
| Secured Note Payable [Member] | ||||||
| Notes Payable, Noncurrent, Total | $ 930,000 | $ 990,000 | ||||
| Repayments of Notes Payable | 100,000 | |||||
| Repayments of Trade Payables | $ 133,880 | |||||
Note 9 - Commitments and Contingencies (Details Textual) |
6 Months Ended | |||
|---|---|---|---|---|
|
Jun. 30, 2022
USD ($)
|
Feb. 21, 2021
ft²
|
Sep. 30, 2017
ft²
|
Aug. 31, 2017
ft²
|
|
| Operating Lease, Expense | $ | $ 44,700 | |||
| Office Space, 5430 LBJ Freeway Dallas Texas [Member] | ||||
| Area of Real Estate Property (Square Foot) | 1,502 | |||
| Expansion, Area of Real Estate Property (Square Foot) | 336 | |||
| Expanded Office Space, 5430 LBJ Freeway Dallas Texas [Member] | ||||
| Area of Real Estate Property (Square Foot) | 2,685 | 1,838 | ||
| Expansion, Area of Real Estate Property (Square Foot) | 847 |
Note 9 - Commitments and Contingencies - Future Lease Payment Obligations (Details) |
Jun. 30, 2022
USD ($)
|
|---|---|
| 2022 | $ 44,098 |
| 2023 | 87,934 |
| 2024 | 89,948 |
| 2025 | 91,122 |
| 2026 | 93,136 |
| Thereafter | 167,645 |
| Total remaining lease payments | 573,883 |
| Less: imputed interest | (205,615) |
| Present Value of remaining lease payments | 368,268 |
| Current | 68,230 |
| Noncurrent | $ 300,038 |
| Weighted-average remaining lease term (years) (Year) | 4 years 7 months 28 days |
| Weighted-average discount rate | 10.22% |