0001010549-16-000817.txt : 20161121 0001010549-16-000817.hdr.sgml : 20161121 20161121154542 ACCESSION NUMBER: 0001010549-16-000817 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 40 CONFORMED PERIOD OF REPORT: 20160930 FILED AS OF DATE: 20161121 DATE AS OF CHANGE: 20161121 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLACKBOXSTOCKS INC. CENTRAL INDEX KEY: 0001567900 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-DRUGS PROPRIETARIES & DRUGGISTS' SUNDRIES [5122] IRS NUMBER: 453598066 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-55108 FILM NUMBER: 162010297 BUSINESS ADDRESS: STREET 1: 5430 LBJ FREEWAY STREET 2: SUITE 1485 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 972-726-9203 MAIL ADDRESS: STREET 1: 5430 LBJ FREEWAY STREET 2: SUITE 1485 CITY: DALLAS STATE: TX ZIP: 75240 FORMER COMPANY: FORMER CONFORMED NAME: SMSA BALLINGER ACQUISITION CORP DATE OF NAME CHANGE: 20130125 10-Q 1 bbox10q093016.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)

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

For the quarterly period ended
September 30, 2016
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.
0-55108

BLACKBOXSTOCKS INC.
(Exact name of registrant as specified in its charter)

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

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

(972) 726-9203
(Registrant's telephone number, including area code)

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

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted 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 and post such files).   Yes    No 

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

Large accelerated filer   Accelerated filer 

Non-accelerated filer  Smaller reporting company

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

The number of shares outstanding of the Registrant's Common Stock as of November 14, 2016 was 23,020,000.




TABLE OF CONTENTS
 
     
 
 
Page
INTRODUCTORY COMMENT
1
CAUTION REGARDING FORWARD LOOKING STATEMENTS
1
   
PART I –FINANCIAL INFORMATION
2
ITEM 1.
FINANCIAL STATEMENTS
2
 
Consolidated Balance Sheets as of September 30, 2016 (Unaudited) and December 31, 2015 (Audited)
2
 
Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2016 and 2015 (Unaudited)
3
 
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2016 and 2015 (Unaudited)
4
 
Notes to Consolidated Financial Statements for the Three and Nine Months Ended September 30, 2016 and 2015
5
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
10
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
11
ITEM 4.
CONTROLS AND PROCEDURES
12
 
 
 
PART II – OTHER INFORMATION
13
ITEM 1.
LEGAL PROCEEDINGS
13
ITEM 1A.
RISK FACTORS
13
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
13
ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
13
ITEM 4.
MINE SAFETY DISCLOSURES
13
ITEM 5.
OTHER INFORMATION
13
ITEM 6.
EXHIBITS
14
 
 
 
SIGNATURES
14



INTRODUCTORY COMMENT

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

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Our prospects are subject to uncertainties and risks. In this Quarterly Report on Form 10-Q, we make forward-looking statements in this Item 2 and elsewhere that also 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 report. 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 ("SEC"). We undertake no obligation to revise or update any forward-looking statement for any reason.
 
 

1


PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

Blackboxstocks Inc. (formerly SMSA Ballinger Acquisition Corp.) and Subsidiary
Consolidated Balance Sheets
September 30, 2016 and December 31, 2015
 
             
   
September 30,
   
December 31,
 
   
2016
   
2015
 
   
(unaudited)
       
             
Assets
           
             
Current assets:
           
Cash
 
$
28,867
   
$
60,286
 
Investments, trading
   
-
     
414
 
Accounts receivable
   
3,501
     
-
 
Prepaid expenses
   
3,779
     
3,414
 
Prepaid expenses, related parties (Note 6)
   
24,050
     
154,500
 
Total current assets
   
60,197
     
218,614
 
                 
Property:
               
Computer and related equipment, net of depreciation of $3,866
               
at September 30, 2016 and $0 at December 31, 2015
   
11,599
     
15,465
 
Total property
   
11,599
     
15,465
 
                 
Total Assets
 
$
71,796
   
$
234,079
 
                 
Liabilities and Stockholders' Equity (Deficit)
               
                 
Current liabilities:
               
Accounts payable
 
$
124,699
   
$
29,148
 
Unearned subscriptions
   
14,323
     
-
 
Accrued interest
   
2,139
     
-
 
Advances, related party (Note 6)
   
29,042
     
-
 
Notes payable (Note 7)
   
50,000
     
-
 
Total current liabilities
   
220,203
     
29,148
 
                 
Commitments and contingencies (Note 8)
               
                 
Stockholders' Equity (Deficit):
               
Preferred stock, $0.001 par value, 5,000,000 shares authorized; no shares
         
 issued and outstanding at September 30, 2016 and December 31, 2015
   
-
     
-
 
Series A Convertible Preferred Stock, $0.001 par value, 5,000,000
               
shares authorized; 5,000,000 issued and outstanding at September 30, 2016
         
 and December 31, 2015, respectively
   
5,000
     
5,000
 
Common stock, $0.001 par value, 100,000,000 shares
               
authorized: 20,220,000 and 20,835,010 issued and outstanding at
               
September 30, 2016 and December 31, 2015, respectively
   
20,220
     
20,835
 
Additional paid in capital
   
910,222
     
799,607
 
Accumulated deficit
   
(1,083,849
)
   
(620,511
)
Total Stockholders' Equity (Deficit)
   
(148,407
)
   
204,931
 
                 
Total Liabilities and Stockholders' Equity (Deficit)
 
$
71,796
   
$
234,079
 
 
The accompanying notes are an integral part of these consolidated
financial statements.


2


Blackboxstocks Inc. (formerly SMSA Ballinger Acquisition Corp.) and Subsidiary
Consolidated Statements of Operations
For the Three and Nine Months Ended September 30, 2016 and 2015
(Unaudited)
 
   
For the Three Months
   
For the Nine Months
 
   
Ended September 30,
   
Ended September 30,
 
   
2016
   
2015
   
2016
   
2015
 
                         
Revenue
 
$
19,540
   
$
-
   
$
19,540
   
$
-
 
                                 
Cost of operations
   
15,633
     
-
     
15,633
     
-
 
                                 
Gross margin
   
3,907
     
-
     
3,907
     
-
 
                                 
Expenses:
                               
Software development costs
   
35,445
     
76,860
     
124,764
     
122,307
 
General and administrative
   
124,013
     
47,942
     
335,497
     
122,892
 
Depreciation
   
1,289
     
-
     
3,866
     
-
 
Total operating expenses
   
160,747
     
124,802
     
464,127
     
245,199
 
                                 
Operating loss
   
(156,840
)
   
(124,802
)
   
(460,220
)
   
(245,199
)
                                 
Interest expense
   
3,118
     
-
     
3,118
     
-
 
                                 
Loss before income taxes
   
(159,958
)
   
(124,802
)
   
(463,338
)
   
(245,199
)
                                 
Income taxes
   
-
     
-
     
-
     
-
 
                                 
Net loss
 
$
(159,958
)
 
$
(124,802
)
 
$
(463,338
)
 
$
(245,199
)
                                 
Weighted average number of common
                               
shares outstanding - basic
   
20,164,565
     
17,618,880
     
20,180,202
     
17,217,132
 
                                 
Net loss per share - basic
 
$
(0.01
)
 
$
(0.01
)
 
$
(0.02
)
 
$
(0.01
)
The accompanying notes are an integral part of these consolidated
financial statements.

 

3


Blackboxstocks Inc. (formerly SMSA Ballinger Acquisition Corp.) and Subsidiary
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2016 and 2015
(Unaudited)
 
   
2016
   
2015
 
Cash flows from operating activities
           
Net loss
 
$
(463,338
)
 
$
(245,199
)
Adjustments to reconcile net loss to net cash used in
         
  operating activities:
               
Depreciation expense
   
3,866
     
-
 
Changes in operating assets and liabilities:
               
Investment, trading
   
414
     
-
 
Accounts receivable
   
(3,501
)
   
-
 
Prepaid expenses
   
(365
)
   
-
 
Prepaid expenses, related parties
   
130,450
     
(119,764
)
Accounts payable
   
95,551
     
(888
)
Accounts payable, related parties
   
-
     
(102,428
)
Unearned subscriptions
   
14,323
         
Accrued interest
   
2,139
     
-
 
Net cash used in operating activities
   
(220,461
)
   
(468,279
)
                 
Cash flows from investing activities
               
Purchases of fixed assets
   
-
     
(15,465
)
Net cash used in investing activities
   
-
     
(15,465
)
                 
Cash flows from financing activities
               
Common stock issued for cash
   
110,000
     
760,000
 
Preferred stock issued for cash
   
-
     
5,000
 
Payment for cancellation of common stock
   
-
     
(245,000
)
Advances from shareholder
   
29,042
     
-
 
Proceeds from notes issued
   
50,000
     
-
 
Net cash provided by financing activities
   
189,042
     
520,000
 
                 
Net increase (decrease) in cash
   
(31,419
)
   
36,256
 
                 
Cash - beginning of period
   
60,286
     
200,530
 
Cash - end of period
 
$
28,867
   
$
236,786
 
                 
Supplemental disclosure-
               
Non-cash investing and financing activities:
               
  Cancellation of common shares
 
$
835
   
$
-
 
The accompanying notes are an integral part of these consolidated
financial statements.

 

4


Blackboxstocks Inc. (formerly SMSA Ballinger Acquisition Corp.) and Subsidiary
Notes to Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2016 and 2015

1. Organization

Blackboxstocks Inc. 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.

On December 1, 2015, the Company entered into a Share Exchange Agreement ("Exchange Agreement"), by and among the Company, Tiger Trade Technologies, Inc. ("Tiger Trade"), a Texas corporation and the Stockholders of Tiger Trade.  Tiger Trade had a total of 25 stockholders as of the date of the Exchange Agreement.

On February 8, 2016, the Company entered into an Agreement and Plan of Merger ("Merger Agreement") with Tiger Trade, providing for the merger of Tiger Trade with and into the Company. At the effective time of the merger (February 9, 2016), the shares of Tiger Trade capital stock outstanding immediately before the effective time were canceled, retired and ceased to exist.

On February 10, 2016, the Company entered into a Stock Cancellation Agreement (the "Cancellation Agreement") with Gust C. Kepler, our sole Director and the President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company, pursuant to which Mr. Kepler cancelled and forfeited 835,010 shares of Company Common Stock held by him.

The Company filed a Certificate of Amendment to its Articles of Incorporation effective as of March 9, 2016 changing the name of the Company to Blackboxstocks Inc.

The Company is in the business of developing, marketing and distributing a real time analytical platform (the "Blackbox System") to serve as a tool for day traders and swing traders on the OTC Markets Group, Inc. ("OTC"), NYSE, AMEX and NASDAQ exchanges markets.

2.  Going Concern

The Company has developed its Blackbox System technology and associated website/platform which it made available to subscribers in September 2016.  The Company estimates additional costs of One Million Dollars ($1,000,000) to Two Million Dollars ($2,000,000) over the next twelve months to continue research and development, as well as provide capital to market, implement and maintain the Blackbox System.  Marketing expenditures to facilitate adoption by potential subscribers are expected to increase now that the Blackbox System web application has been deemed by management to be enterprise ready for subscriber sales.

We cannot provide any assurances that the Company will be able to secure sufficient funds to satisfy our cash requirements for the next twelve months, nor that we will be successful in our endeavors to market the Blackbox System web application.  The inability to secure additional funds may have a material adverse effect on the Company.  The Company currently anticipates raising any additional amounts necessary to implement our plans through debt and/or equity financing from the sale of Company Common Stock and reinvestment of profits generated through Blackbox System web application subscription revenues.



5


Blackboxstocks Inc. (formerly SMSA Ballinger Acquisition Corp.) and Subsidiary
Notes to Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2016 and 2015

2.  Going Concern (Continued)

The consolidated financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company's ability to continue as a going concern.  There is no assurance that the Company will be successful in its efforts to raise funds through sales of stock or obtain debt financing or generate subscription revenues sufficient to meet our capital needs. These factors raise substantial doubt about the ability of the Company to continue as a going concern.

3. 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 ("GAAP"). The financial statements reflect all adjustments that are, in the opinion of management, necessary to fairly present such information. All such adjustments are of a normal recurring nature. Although the Company believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures, including a description of significant accounting policies normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. 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, 2015.  The accompanying unaudited financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results for any subsequent quarter or the entire year ending December 31, 2016.

Basis of Presentation - The accompanying financial statements were prepared in conformity with GAAP.

Use of Estimates – Blackboxstocks' 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.

Recently Issued Accounting Pronouncements - During the nine months ended September 30, 2016 and 2015, there were several new accounting pronouncements issued by the Financial Accounting Standards Board ("FASB"). Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company's financial statements.

Property and Equipment - Blackboxstocks is engaged in the development of its proprietary Blackbox System technology, an algorithm driven system, through a combination of in house system analysts and outside contractors.  The Company's Blackbox System software is still in development and will be expensed until the software reaches technological feasibility.

The Company's property and equipment acquired during 2015 was placed in service effective January 1, 2016 and depreciated on the straight line basis over an estimated useful life of three years beginning in 2016.


6


Blackboxstocks Inc. (formerly SMSA Ballinger Acquisition Corp.) and Subsidiary
Notes to Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2016 and 2015

3. Summary of Significant Accounting Policies (Continued)

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.  Therefore, 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.  At September 30, 2016 and 2015, the potential dilution would be 5,000,000 shares of common stock in the event the issued and outstanding shares of Series A Convertible Preferred Stock are converted.

Revenue Recognition - The Company recognizes revenue from the sale of subscriptions for the use of the Blackbox System web application, when persuasive evidence of an arrangement exists, delivery and collectability is probable. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities.  During the quarter ended September 30, 2016 the Company launched its Blackbox System web application and began generating subscription sales revenue.

4.   Stockholders' Equity

At December 31, 2015 the Company had 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").  As of September 30, 2016, there were 20,220,000 shares of Common Stock issued and outstanding, including 15,000,000 shares issued in exchange for proprietary assets contributed by our President and a third party vendor (Note 6).

Shares of Series A Convertible Preferred Stock have a $0.001 par value, do not accumulate dividends, and are convertible into shares of Common Stock on a one-for-one basis.  Additionally, each share entitles the holder to 100 votes and, with respect to dividend and liquidation rights, the shares rank pari passu with the Company's Common Stock.

On December 1, 2015, the Company entered into an Exchange Agreement with Tiger Trade and its Stockholders (Note 1). Under the terms and conditions of the Exchange Agreement, the Company offered and sold Seventeen Million Nine Hundred Thousand (17,900,000) newly issued shares of Company Common Stock and Five Million (5,000,000) newly issued shares of Company Series A Convertible Preferred Stock in consideration for all the issued and outstanding shares of Tiger Trade capital stock. The effect of the issuance was that Tiger Trade stockholders acquired approximately 85.91% of the issued and outstanding shares of Company Common Stock and 100% of the issued and outstanding shares of Company Series A Convertible Preferred Stock. Tiger Trade became a wholly owned subsidiary of the Company as a result of the Exchange Agreement transaction.

Tiger Trade was subsequently merged with and into the Company on February 9, 2016, at which time all of the outstanding shares of capital stock of Tiger Trade outstanding immediately before the effective date were canceled, retired and ceased to exist.



7


Blackboxstocks Inc. (formerly SMSA Ballinger Acquisition Corp.) and Subsidiary
Notes to Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2016 and 2015

4.   Stockholders' Equity (Continued)

On February 10, 2016, the Company entered into a Stock Cancellation Agreement with Gust C. Kepler, a Director, President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company, pursuant to which Mr. Kepler cancelled and forfeited 835,010 shares of the Company's Common Stock.

During the quarter ended September 30, 2016, the Company issued a total of 220,000 shares of Common Stock at a cash price of $0.50 per share for a total of $110,000. However, the Company subsequently honored a request by one investor to rescind the purchase of 200,000 of such shares of Common Stock on October 28, 2016 (Note 9).

5.  Stock Options and Warrants
 
Costs attributable to the issuance of stock options and share purchase warrants are measured at fair value at the date of issuance and offset with a corresponding increase in 'Additional Paid in Capital' at the time of issuance.  When the options or warrants are exercised, the receipt of consideration is an increase in stockholders' equity.  There was no stock option or warrant activity during the nine months ended September 30, 2016 and 2015 and as of November 14, 2016 no options or warrants were outstanding.

6.  Related Party Transactions

During the quarter ended September 30, 2016, Gust C. Kepler, a Director, President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company advanced $19,082 to the Company. The advance is unsecured and bears no interest.

During the period April 28, 2014 through March 31, 2016, the Company (and its predecessor, Tiger Trade) engaged the services of Karma Black Box LLC ("Karma"), which became a Company stockholder as a result of the Exchange Agreement (Note 4), for application development services of the Company's Blackbox System technology.   Karma was issued 5,000,000 shares of Tiger Trade common stock in exchange for some of the services valued at $5,000.  Karma's Tiger Trade shares were exchanged for Company Common Stock on a one-for-one basis under the terms of the Exchange Agreement.  At September 30, 2016 and December 31, 2015, there was no accounts payable owed to Karma.

G2 International, Inc. ("G2"), which does business as IPA Tech Group ("IPA") (Note 8), is a company wholly owned by Gust C. Kepler, a Director, President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company, and the Company's controlling stockholder. During the nine months ended September 30, 2016 and 2015, G2 provided software development services to the Company in exchange for fees totaling $0 and $3,000, respectively.  In 2016 G2/IPA refunded $130,450 of prepayments leaving a prepaid balance of $24,050 as of November 14, 2016.  During the nine months ended September 30, 2016 and 2015, the Company incurred $0 and $126,051 of expenses with G2, respectively.  At September 30, 2016 and December 31, 2015, there were no accounts payable owed to G2.

7.  Notes Payable

On April 29, 2016 a third party advanced $50,000 to the Company in exchange for a six month promissory note accruing interest at a rate of 10% per annum and secured by all assets and personal property of the Company.  Accrued interest on the note was $2,139 as of September 30, 2016.


8


Blackboxstocks Inc. (formerly SMSA Ballinger Acquisition Corp.) and Subsidiary
Notes to Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2016 and 2015

8.  Commitments and Contingencies

The Company entered into a sublease agreement with G2 effective July 1, 2015 subject to the terms and conditions of the office lease between G2 and Teachers Insurance and Annuity Association of America for approximately 1,502 square feet of office space at 5430 LBJ Freeway, Dallas, Texas.  The sublease agreement expires March 31, 2020.  During the nine months ended September 30, 2016 we incurred $33,742 in office rental expense.

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.

9.  Subsequent Events

On October 26, 2016, Blackboxstocks Inc. entered into a Stock Purchase Agreement (the "Purchase Agreement") with a resident of Singapore (the "Investor"), pursuant to which the Company sold 3,000,000 shares of the Company's Common Stock in a private offering to the Investor at a price of $0.50 per share, for total consideration to the Company of $1,500,000.

On October 28, 2016 the Company entered into a Rescission and Release Agreement with an investor pursuant to which the Company granted rescission of the purchase of 200,000 of such shares of Common Stock purchased on July 22, 2016.



9


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, 2015, as well as with our condensed financial statements and the notes thereto included elsewhere herein.

Overview

The Company is in the business of developing, marketing and distributing a real time analytical platform to serve as a tool for day traders and swing traders on the OTC Markets Group, Inc., NYSE, AMEX and NASDAQ markets. Our proprietary technology is an algorithm driven system (the "Blackbox System") that works in real time, measuring market trends and data while utilizing a multitude of specific criteria, both live and historical. Our Blackbox System was designed to monitor and analyzes over 13,000 stocks on the NASDAQ, NYSE, AMEX and OTC markets simultaneously as our servers receive live feeds from these markets. We consider the Blackbox System technology to be among the most user-friendly of its kind.

The Company launched its Blackbox System web application 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. As of September 30, 2016, we sold 230 monthly and 23 annual subscriptions.

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 OTC Pink tier of the OTC Markets Group, Inc. (the "OTC Pink") under the symbol "BLBX." Prior to March 9, 2016, our Common Stock was quoted under the symbol "SMQA."  Our corporate website is located at http://www.blackboxstocks.com.

Basis of Presentation of Financial Information

The accompanying financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern, which is dependent upon the Company's ability to establish itself as a profitable business.  At September 30, 2016, the Company had an accumulated deficit of $1,083,849, and for the three and nine months ended September 30, 2016, incurred net losses of $159,958 and $463,338, respectively.  Management expects that the Company may need to raise additional capital to sustain operations until such time as the Company can achieve profitability.  However, there can be no assurance that management will be successful in obtaining additional funding or in attaining profitable operations.

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

Significant Accounting Policies

There have been no changes from the Summary of Significant Accounting Policies described in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 14, 2016.

Liquidity and Capital Resources

Since our inception, we have not attained a level of operations that allows us to meet our current overhead.  We do not contemplate attaining profitable operations until we complete the development of the Blackbox System web application and execute plans to market the Blackbox System. Nevertheless, there can be no assurance that management will be able to successfully implement such plans and if executed, there can be no assurance that operating levels sufficient to sustain profitability can ever be achieved.  We expect to be dependent upon obtaining additional financing in order to adequately fund working capital, infrastructure, development and marketing expenses in order to execute plans for future operations, so that we can achieve a level of revenue adequate to support our cost structure, none of which can be assured.  These factors raise substantial doubt about our ability to continue as a going concern and the accompanying financial statements do not include any adjustments related to the recoverability or classification of asset carrying amounts or the amounts and classification of liabilities that may result should we be unable to continue as a going concern.
 
 
10


As of September 30, 2016, the Company's cash balance was $28,867. Management expects that the Company will need to raise significant additional capital to sustain operations until such time as the Company can achieve profitability.   Our ability to generate revenue with the goal of reaching profitability is solely dependent upon the success of our planned efforts to finish development and continue to market the Blackbox System to subscribers. If subscriptions for the Blackbox System do not meet our revenue objectives, we will not be able to reach or sustain profitability and will be required to obtain funds through debt or equity financing sources, however, there can be no assurance that management will be able to successfully obtain financing on acceptable terms.

Results of Operations

Comparison of Three Months Ended September 30, 2016 and 2015

For the three months ended September 30, 2016 the Company had revenues of $19,540 compared to no revenue and cost of operations of $15,633 compared to none for the same period in 2015.  For the three months ended September 30, 2016, the Company had operating expenses totaling $160,747 compared to $124,802 for the same period in 2015, an increase of $35,945. This change is primarily a result of an increase in general and administrative expenses of $76,071 due to new expenses relating to payroll, consulting, rent, insurance and marketing, as well as increased accounting, legal and transfer agent expenses. The increased general and administrative expenses were offset by a decrease in software development costs of $41,415, from $76,860 to $35,445 for the third quarter ended September 30, 2015 and 2016, respectively. The Company also recorded a depreciation expense of $1,289 for the three months ended September 30, 2016.

Comparison of Nine Months Ended September 30, 2016 and 2015

For the nine months ended September 30, 2016 the Company had revenues of $19,540 compared to no revenue and cost of operations of $15,633 compared to none during the same period in 2015.  For the nine months ended September 30, 2016, the Company had operating expenses totaling $464,127 compared to $245,199 for the same period in 2015, an increase of $218,928. This change is primarily a result of an increase in general and administrative expenses of $212,605 due to new expenses relating to payroll, consulting, rent, insurance and marketing, as well as increased accounting, legal and transfer agent expenses. Software development costs also increased by $2,457, from $122,307 to $124,764 for the nine month periods ended September 30, 2015 and 2016, respectively. The Company also recorded a depreciation expense of $3,866 for the nine months ended September 30, 2016.

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our Company is a "smaller reporting company" as defined by Rule 12b-2 of the Exchange Act, and as such, is not required to provide the information required under this Item.


11


ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Gust Kepler, our principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) as of September 30, 2016, 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, the Company's principal executive officer and principal financial officer concluded that the Company's disclosure controls and procedures as of September 30, 2016 were not 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 September 30, 2016 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.

Management is aware that there is a lack of segregation of duties at the Company due to the fact that the Company only has one director and executive officer dealing with general administrative and financial matters. This constitutes a material weakness in the internal controls. Management has decided that considering the officer/director involved, the control procedures in place, and the outsourcing of certain financial functions, the risks associated with such lack of segregation were low and the potential benefits of adding additional employees to clearly segregate duties did not justify the expenses associated with such increases. Management periodically reevaluates this situation. In light of the Company's current cash flow situation, the Company does not intend to increase staffing to mitigate the current lack of segregation of duties within the general administrative and financial functions.


12


PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

None.

ITEM 1A.  RISK FACTORS

Our Company is a "smaller reporting company" as defined by Rule 12b-2 of the Exchange Act, and as such, is not required to provide the information required under this Item.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEEDS

During the three months ended September 30, 2016 we issued 220,000 shares of our Common Stock to two individual investors at a price of $0.50 per shares for aggregate proceeds of $110,000. Subsequent to the end of our third fiscal quarter, on October 28, 2016, the Company entered into a Rescission and Release Agreement with an investor pursuant to which the Company granted rescission of the purchase of 200,000 of such shares of Common Stock and refunded the investor's $100,000 purchase price.

The Common Stock was privately offered and sold in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act. The Company reasonably believed that each of the purchasers of such securities had access to information concerning its operations and financial condition, was acquiring the securities for its own account and not with a view to the distribution thereof, and was an "accredited investor" as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act. Furthermore, no "general solicitation of investors" was made by the Company with respect to sale of any of the securities. At the time of their issuance, the securities described above were deemed to be restricted securities for purposes of the Securities Act and the documentation representing the securities bear legends and/or non-transfer provisions to that effect.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.  OTHER INFORMATION

None.


13


ITEM 6.  EXHIBITS

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
Interactive data files pursuant to Rule 405 of Regulation S-T*
* Filed herewith.
**              Furnished herewith


SIGNATURES

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.
     
November 21, 2016
BLACKBOXSTOCKS INC.
     
 
 By:
      /s/ Gust Kepler
 
Gust Kepler
 
President, Chief Executive Officer and Secretary
(Principal Executive Officer and Principal Financial
and Accounting Officer)


14


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
Interactive data files pursuant to Rule 405 of Regulation S-T*
* Filed herewith.
**              Furnished herewith

15


 
 
EX-31.1 2 ex311.htm
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.

November 21, 2016
 
/s/ Gust Kepler
 
 
Gust Kepler
 
 
Principal Executive Officer
EX-31.1 3 ex312.htm
EXHIBIT 31.2

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.

November 21, 2016
 
/s/ Gust Kepler
 
 
Gust Kepler
 
 
Principal Financial Officer
EX-32.1 4 ex321.htm
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 September 30, 2016 (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 and Principal Financial Officer
November 21, 2016

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.
EX-32.2 5 ex322.htm
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 September 30, 2016 (the "Report"), I, Gust Kepler, 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/ Gust Kepler
Gust Kepler
Principal Financial Officer
November 21, 2016

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.
EX-101.INS 6 blbx-20160930.xml XBRL INSTANCE DOCUMENT 3866 0 0.001 0.001 5000000 5000000 0.001 0.001 5000000 5000000 5000000 5000000 5000000 5000000 0.001 0.001 100000000 100000000 20220000 20835010 20220000 20835010 19540 0 19540 0 15633 0 15633 0 3907 0 3907 0 35445 76860 124764 122307 124013 47942 335497 122892 1289 0 3866 0 160747 124802 464127 245199 -156840 -124802 -460220 -245199 3118 0 3118 0 -159958 -124802 -463338 -245199 0 0 0 0 -159958 -124802 20164565 17618880 20180202 17217132 -0.01 -0.01 -0.02 -0.01 -463338 -245199 -463338 -245199 3866 0 414 0 -3501 0 -365 0 130450 -119764 95551 -888 0 -102428 14323 0 2139 0 -220461 -468279 0 -15465 0 -15465 110000 760000 0 5000 0 -245000 29042 0 50000 0 189042 520000 -31419 36256 60286 200530 28867 236786 835 0 28867 60286 0 414 3501 0 3779 3414 24050 154500 60197 218614 11599 15465 11599 15465 71796 234079 124699 29148 14323 0 2139 0 29042 0 50000 0 220203 29148 0 0 5000 5000 20220 20835 910222 799607 -1083849 -620511 -148407 204931 71796 234079 <!--egx--><p style='margin:3pt 0in;line-height:12.55pt'><b>1. Organization</b></p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>Blackboxstocks Inc. 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.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>On December 1, 2015, the Company entered into a Share Exchange Agreement ("Exchange Agreement"), by and among the Company, Tiger Trade Technologies, Inc. ("Tiger Trade"), a Texas corporation and the Stockholders of Tiger Trade.&nbsp; Tiger Trade had a total of 25 stockholders as of the date of the Exchange Agreement.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>On February 8, 2016, the Company entered into an Agreement and Plan of Merger ("Merger Agreement") with Tiger Trade, providing for the merger of Tiger Trade with and into the Company. At the effective time of the merger (February 9, 2016), the shares of Tiger Trade capital stock outstanding immediately before the effective time were canceled, retired and ceased to exist.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>On February 10, 2016, the Company entered into a Stock Cancellation Agreement (the "Cancellation Agreement") with Gust C. Kepler, our sole Director and the President, Chief Executive Officer, Chief Financial Officer and Secretary<b>&nbsp;</b>of the Company, pursuant to which Mr. Kepler cancelled and forfeited 835,010 shares of Company Common Stock held by him.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>The Company filed a Certificate of Amendment to its Articles of Incorporation effective as of March 9, 2016 changing the name of the Company to Blackboxstocks Inc.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>The Company is in the business of developing, marketing and distributing a real time analytical platform (the "Blackbox System") to serve as a tool for day traders and swing traders on the OTC Markets Group, Inc. ("OTC"), NYSE, AMEX and NASDAQ exchanges markets.</p> <!--egx--><p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'><b>2.&nbsp; Going Concern</b></p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>The Company has developed its Blackbox System technology and associated website/platform which it made available to subscribers in September 2016.&nbsp; The Company estimates additional costs of One Million Dollars ($1,000,000) to Two Million Dollars ($2,000,000) over the next twelve months to continue research and development, as well as provide capital to market, implement and maintain the Blackbox System.&nbsp; Marketing expenditures to facilitate adoption by potential subscribers&nbsp;are expected to increase now that the Blackbox System web application has been deemed by management to be enterprise ready for subscriber sales.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>We cannot provide any assurances that the Company will be able to secure sufficient funds to satisfy our cash requirements for the next twelve months, nor that we will be successful in our endeavors to market the Blackbox System web application.&nbsp; The inability to secure additional funds may have a material adverse effect on the Company.&nbsp; The Company currently anticipates raising any additional amounts necessary to implement our plans through debt and/or equity financing from the sale of Company Common Stock and reinvestment of profits generated through Blackbox System web application subscription revenues.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>The consolidated financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company's ability to continue as a going concern.&nbsp; There is no assurance that the Company will be successful in its efforts to raise funds through sales of stock or obtain debt financing or generate subscription revenues sufficient to meet our capital needs. These factors raise substantial doubt about the ability of the Company to continue as a going concern.</p> <!--egx--><p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'><b>3. Summary of Significant Accounting Policies</b></p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>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 ("GAAP"). The financial statements reflect all adjustments that are, in the opinion of management, necessary to fairly present such information. All such adjustments are of a normal recurring nature. Although the Company believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures, including a description of significant accounting policies normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. 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, 2015.&nbsp; The accompanying unaudited financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results for any subsequent quarter or the entire year ending December 31, 2016.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'><u>Basis of Presentation</u> - The accompanying financial statements were prepared in conformity with GAAP.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'><u>Use of Estimates</u> &#150; Blackboxstocks' 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.&nbsp;&nbsp;Actual results could differ from those estimates.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'><u>Recently Issued Accounting Pronouncements</u> - During the nine months ended September 30, 2016 and 2015, there were several new accounting pronouncements issued by the Financial Accounting Standards Board ("FASB"). Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company's financial statements.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'><u>Property and Equipment</u> - Blackboxstocks is engaged in the development of its proprietary Blackbox System technology, an algorithm driven system, through a combination of in house system analysts and outside contractors.&nbsp; The Company's Blackbox System software is still in development and will be expensed until the software reaches technological feasibility.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>The Company's property and equipment acquired during 2015 was placed in service effective January 1, 2016 and depreciated on the straight line basis over an estimated useful life of three years beginning in 2016.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'><u>Earnings or (Loss) Per Share</u> - 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.&nbsp;&nbsp;Diluted earnings per share reflects the potential dilution of securities by including other potentially issuable shares of common stock,&nbsp; 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.&nbsp;&nbsp;Therefore, 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.&nbsp; At September 30, 2016 and 2015, the potential dilution would be 5,000,000 shares of common stock in the event the issued and outstanding shares of Series A Convertible Preferred Stock are converted.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'><u>Revenue Recognition</u> - The Company recognizes revenue from the sale of subscriptions for the use of the Blackbox System web application, when persuasive evidence of an arrangement exists, delivery and collectability is probable. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities.&nbsp; During the quarter ended September 30, 2016 the Company launched its Blackbox System web application and began generating subscription sales revenue.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <!--egx--><p style='margin:3pt 0in;line-height:12.55pt'><b>4.&nbsp;&nbsp;&nbsp;Stockholders' Equity</b></p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>At December 31, 2015 the Company had 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").&nbsp; As of September 30, 2016, there were 20,220,000 shares of Common Stock issued and outstanding, including 15,000,000 shares issued in exchange for proprietary assets contributed by our President and a third party vendor (Note 6).</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>Shares of Series A Convertible Preferred Stock have a $0.001 par value, do not accumulate dividends, and are convertible into shares of Common Stock on a one-for-one basis.&nbsp; Additionally, each share entitles the holder to 100 votes and, with respect to dividend and liquidation rights, the shares rank pari passu with the Company's Common Stock.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>On December 1, 2015, the Company entered into an Exchange Agreement with Tiger Trade and its Stockholders (Note 1). Under the terms and conditions of the Exchange Agreement, the Company&nbsp;offered and sold Seventeen Million Nine Hundred Thousand (17,900,000) newly issued shares of Company Common Stock and Five Million (5,000,000) newly issued shares of Company Series A Convertible Preferred Stock in consideration for all the issued and outstanding shares of Tiger Trade capital stock. The effect of the issuance was that Tiger Trade stockholders acquired approximately 85.91% of the issued and outstanding shares of Company Common Stock and 100% of the issued and outstanding shares of Company Series A Convertible Preferred Stock.&nbsp;Tiger Trade became a wholly owned subsidiary of the Company as a result of the Exchange Agreement transaction.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>Tiger Trade was subsequently merged with and into the Company on February 9, 2016, at which time all of the outstanding shares of capital stock of Tiger Trade outstanding immediately before the effective date were canceled, retired and ceased to exist.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>On February 10, 2016, the Company entered into a Stock Cancellation Agreement with Gust C. Kepler, a Director, President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company, pursuant to which Mr. Kepler cancelled and forfeited 835,010 shares of the Company's Common Stock.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>During the quarter ended September 30, 2016, the Company issued a total of 220,000 shares of Common Stock at a cash price of $0.50 per share for a total of $110,000. However, the Company subsequently honored a request by one investor to rescind the purchase of 200,000 of such shares of Common Stock on October 28, 2016 (Note 9).</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <!--egx--><p style='margin:3pt 0in;line-height:12.55pt'><b>5.&nbsp; Stock Options and Warrants</b></p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>Costs attributable to the issuance of stock options and share purchase warrants are measured at fair value at the date of issuance and offset with a corresponding increase in 'Additional Paid in Capital' at the time of issuance.&nbsp;&nbsp;When the options or warrants are exercised, the receipt of consideration is an increase in stockholders' equity.&nbsp; There was no stock option or warrant activity during the nine months ended September 30, 2016 and 2015 and as of November 14, 2016 no options or warrants were outstanding.</p> <!--egx--><p style='margin:3pt 0in;line-height:12.55pt'><b>6.&nbsp;&nbsp;Related Party Transactions</b></p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>During the quarter ended September 30, 2016, Gust C. Kepler, a Director, President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company advanced $19,082 to the Company. The advance is unsecured and bears no interest.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>During the period April 28, 2014 through March 31, 2016, the Company (and its predecessor, Tiger Trade) engaged the services of Karma Black Box LLC ("Karma"), which became a Company stockholder as a result of the Exchange Agreement (Note 4), for application development services of the Company's Blackbox System technology.&nbsp;&nbsp; Karma was issued 5,000,000 shares of Tiger Trade common stock in exchange for some of the services valued at $5,000.&nbsp; Karma's Tiger Trade shares were exchanged for Company Common Stock on a one-for-one basis under the terms of the Exchange Agreement.&nbsp; At September 30, 2016 and December 31, 2015, there was no accounts payable owed to Karma.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>G2 International, Inc. ("G2"), which does business as IPA Tech Group ("IPA") (Note 8), is a company wholly owned by Gust C. Kepler, a Director, President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company, and the Company's controlling stockholder. During the nine months ended September 30, 2016 and 2015, G2 provided software development services to the Company in exchange for fees totaling $0 and $3,000, respectively.&nbsp; In 2016 G2/IPA refunded $130,450 of prepayments leaving a prepaid balance of $24,050 as of November 14, 2016.&nbsp; During the nine months ended September 30, 2016 and 2015, the Company incurred $0 and $126,051 of expenses with G2, respectively.&nbsp; At September 30, 2016 and December 31, 2015, there were no accounts payable owed to G2.</p> <!--egx--><p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'><b>7.&nbsp; Notes Payable</b></p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>On April 29, 2016 a third party advanced $50,000 to the Company in exchange for a six month promissory note accruing interest at a rate of 10% per annum and secured by all assets and personal property of the Company.&nbsp; Accrued interest on the note was $2,139 as of September 30, 2016.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <!--egx--><p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'><b>8.&nbsp; Commitments and Contingencies</b></p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>The Company entered into a sublease agreement with G2 effective July 1, 2015 subject to the terms and conditions of the office lease between G2 and Teachers Insurance and Annuity Association of America for approximately 1,502 square feet of office space at 5430 LBJ Freeway, Dallas, Texas.&nbsp; The sublease agreement expires March 31, 2020.&nbsp; During the nine months ended September 30, 2016 we incurred $33,742 in office rental expense.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>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.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <!--egx--><p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'><b>9.&nbsp; Subsequent Events</b></p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>On October 26, 2016, Blackboxstocks Inc. entered into a Stock Purchase Agreement (the "Purchase Agreement") with a resident of Singapore (the "Investor"), pursuant to which the Company sold 3,000,000 shares of the Company's Common Stock in a private offering to the Investor at a price of $0.50 per share, for total consideration to the Company of $1,500,000.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>On October 28, 2016 the Company entered into a Rescission and Release Agreement with an investor pursuant to which the Company granted rescission of the purchase of 200,000 of such shares of Common Stock purchased on July 22, 2016.</p> <!--egx--><p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'><u>Basis of Presentation</u> - The accompanying financial statements were prepared in conformity with GAAP.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <!--egx--><p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'><u>Use of Estimates</u> &#150; Blackboxstocks' 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.&nbsp;&nbsp;Actual results could differ from those estimates.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <!--egx--><p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'><u>Recently Issued Accounting Pronouncements</u> - During the nine months ended September 30, 2016 and 2015, there were several new accounting pronouncements issued by the Financial Accounting Standards Board ("FASB"). Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company's financial statements.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <!--egx--><p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'><u>Property and Equipment</u> - Blackboxstocks is engaged in the development of its proprietary Blackbox System technology, an algorithm driven system, through a combination of in house system analysts and outside contractors.&nbsp; The Company's Blackbox System software is still in development and will be expensed until the software reaches technological feasibility.</p> <p style='margin:3pt 0in;line-height:12.55pt'>&nbsp;</p> <p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'>The Company's property and equipment acquired during 2015 was placed in service effective January 1, 2016 and depreciated on the straight line basis over an estimated useful life of three years beginning in 2016.</p> <!--egx--><p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'><u>Earnings or (Loss) Per Share</u> - 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.&nbsp;&nbsp;Diluted earnings per share reflects the potential dilution of securities by including other potentially issuable shares of common stock,&nbsp; 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.&nbsp;&nbsp;Therefore, 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.&nbsp; At September 30, 2016 and 2015, the potential dilution would be 5,000,000 shares of common stock in the event the issued and outstanding shares of Series A Convertible Preferred Stock are converted.</p> <!--egx--><p style='text-align:justify;margin:3pt 0in;line-height:12.55pt'><u>Revenue Recognition</u> - The Company recognizes revenue from the sale of subscriptions for the use of the Blackbox System web application, when persuasive evidence of an arrangement exists, delivery and collectability is probable. 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Document and Entity Information - shares
9 Months Ended
Sep. 30, 2016
Nov. 14, 2016
Document and Entity Information:    
Entity Registrant Name BLACKBOXSTOCKS INC.  
Document Type 10-Q  
Document Period End Date Sep. 30, 2016  
Trading Symbol blbx  
Amendment Flag false  
Entity Central Index Key 0001567900  
Current Fiscal Year End Date --12-31  
Entity Common Stock, Shares Outstanding   23,020,000
Entity Filer Category Smaller Reporting Company  
Entity Current Reporting Status Yes  
Entity Voluntary Filers No  
Entity Well-known Seasoned Issuer No  
Document Fiscal Year Focus 2016  
Document Fiscal Period Focus Q3  
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Consolidated Balance Sheets - USD ($)
Sep. 30, 2016
Dec. 31, 2015
Current assets:    
Cash $ 28,867 $ 60,286
Investments, trading 0 414
Accounts receivable 3,501 0
Prepaid expenses 3,779 3,414
Prepaid expenses, related parties (Note 6) 24,050 154,500
Total current assets 60,197 218,614
Property:    
Computer and related equipment, net of depreciation of $3,866 at September 30, 2016 and $0 at December 31, 2015 11,599 15,465
Total property 11,599 15,465
Total Assets 71,796 234,079
Current liabilities:    
Accounts payable 124,699 29,148
Unearned subscriptions 14,323 0
Accrued interest 2,139 0
Advances, related party (Note 6) 29,042 0
Notes payable (Note 7) 50,000 0
Total current liabilities 220,203 29,148
Commitments and contingencies (Note 8)
Stockholders' Equity (Deficit):    
Preferred stock, $0.001 par value, 5,000,000 shares authorized; no sharesissued and outstanding at September 30, 2016 and December 31, 2015 0 0
Series A Convertible Preferred Stock, $0.001 par value, 5,000,000 shares authorized; 5,000,000 issued and outstanding at September 30, 2016 and December 31, 2015, respectively 5,000 5,000
Common stock, $0.001 par value, 100,000,000 shares authorized: 20,220,000 and 20,835,010 issued and outstanding at September 30, 2016 and December 31, 2015, respectively 20,220 20,835
Additional paid in capital 910,222 799,607
Accumulated deficit (1,083,849) (620,511)
Total Stockholders' Equity (Deficit) (148,407) 204,931
Total Liabilities and Stockholders' Equity (Deficit) $ 71,796 $ 234,079
XML 14 R3.htm IDEA: XBRL DOCUMENT v3.5.0.2
Consolidated Balance Sheets Parentheticals - USD ($)
Sep. 30, 2016
Dec. 31, 2015
Parentheticals    
Computer and related equipment, net of depreciation $ 3,866 $ 0
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock shares authorized 5,000,000 5,000,000
Series A Convertible Preferred Stock par value $ 0.001 $ 0.001
Series A Convertible Preferred Stock shares authorized 5,000,000 5,000,000
Series A Convertible Preferred Stock issued 5,000,000 5,000,000
Series A Convertible Preferred Stock outstanding 5,000,000 5,000,000
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 20,220,000 20,835,010
Common stock, shares outstanding 20,220,000 20,835,010
XML 15 R4.htm IDEA: XBRL DOCUMENT v3.5.0.2
Consolidated Statements of Operations (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
REVENUES        
Revenue $ 19,540 $ 0 $ 19,540 $ 0
Cost of operations 15,633 0 15,633 0
Gross margin 3,907 0 3,907 0
Expenses:        
Software development costs 35,445 76,860 124,764 122,307
General and administrative 124,013 47,942 335,497 122,892
Depreciation 1,289 0 3,866 0
Total operating expenses 160,747 124,802 464,127 245,199
Operating loss (156,840) (124,802) (460,220) (245,199)
Interest expense 3,118 0 3,118 0
Loss before income taxes (159,958) (124,802) (463,338) (245,199)
Income taxes 0 0 0 0
Net loss $ (159,958) $ (124,802) $ (463,338) $ (245,199)
Weighted average number of commonshares outstanding - basic 20,164,565 17,618,880 20,180,202 17,217,132
Net loss per share - basic $ (0.01) $ (0.01) $ (0.02) $ (0.01)
XML 16 R5.htm IDEA: XBRL DOCUMENT v3.5.0.2
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Cash flows from operating activities    
Net loss $ (463,338) $ (245,199)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation expense 3,866 0
Changes in operating assets and liabilities:    
Investment, trading 414 0
Accounts receivable (3,501) 0
Prepaid expenses (365) 0
Prepaid expenses, related parties 130,450 (119,764)
Accounts payable 95,551 (888)
Accounts payable, related parties 0 (102,428)
Unearned subscriptions 14,323 0
Accrued interest 2,139 0
Net cash used in operating activities (220,461) (468,279)
Cash flows from investing activities    
Purchases of fixed assets 0 (15,465)
Net cash used in investing activities 0 (15,465)
Cash flows from financing activities    
Common stock issued for cash 110,000 760,000
Preferred stock issued for cash 0 5,000
Payment for cancellation of common stock 0 (245,000)
Advances from shareholder 29,042 0
Proceeds from notes issued 50,000 0
Net cash provided by financing activities 189,042 520,000
Net increase (decrease) in cash (31,419) 36,256
Cash - beginning of period 60,286 200,530
Cash - end of period 28,867 236,786
Non-cash investing and financing activities:    
Cancellation of common shares $ 835 $ 0
XML 17 R6.htm IDEA: XBRL DOCUMENT v3.5.0.2
ORGANIZATION
9 Months Ended
Sep. 30, 2016
ORGANIZATION  
ORGANIZATION

1. Organization

 

Blackboxstocks Inc. 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.

 

On December 1, 2015, the Company entered into a Share Exchange Agreement ("Exchange Agreement"), by and among the Company, Tiger Trade Technologies, Inc. ("Tiger Trade"), a Texas corporation and the Stockholders of Tiger Trade.  Tiger Trade had a total of 25 stockholders as of the date of the Exchange Agreement.

 

On February 8, 2016, the Company entered into an Agreement and Plan of Merger ("Merger Agreement") with Tiger Trade, providing for the merger of Tiger Trade with and into the Company. At the effective time of the merger (February 9, 2016), the shares of Tiger Trade capital stock outstanding immediately before the effective time were canceled, retired and ceased to exist.

 

On February 10, 2016, the Company entered into a Stock Cancellation Agreement (the "Cancellation Agreement") with Gust C. Kepler, our sole Director and the President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company, pursuant to which Mr. Kepler cancelled and forfeited 835,010 shares of Company Common Stock held by him.

 

The Company filed a Certificate of Amendment to its Articles of Incorporation effective as of March 9, 2016 changing the name of the Company to Blackboxstocks Inc.

 

The Company is in the business of developing, marketing and distributing a real time analytical platform (the "Blackbox System") to serve as a tool for day traders and swing traders on the OTC Markets Group, Inc. ("OTC"), NYSE, AMEX and NASDAQ exchanges markets.

XML 18 R7.htm IDEA: XBRL DOCUMENT v3.5.0.2
GOING CONCERN
9 Months Ended
Sep. 30, 2016
GOING CONCERN  
GOING CONCERN

2.  Going Concern

 

The Company has developed its Blackbox System technology and associated website/platform which it made available to subscribers in September 2016.  The Company estimates additional costs of One Million Dollars ($1,000,000) to Two Million Dollars ($2,000,000) over the next twelve months to continue research and development, as well as provide capital to market, implement and maintain the Blackbox System.  Marketing expenditures to facilitate adoption by potential subscribers are expected to increase now that the Blackbox System web application has been deemed by management to be enterprise ready for subscriber sales.

 

We cannot provide any assurances that the Company will be able to secure sufficient funds to satisfy our cash requirements for the next twelve months, nor that we will be successful in our endeavors to market the Blackbox System web application.  The inability to secure additional funds may have a material adverse effect on the Company.  The Company currently anticipates raising any additional amounts necessary to implement our plans through debt and/or equity financing from the sale of Company Common Stock and reinvestment of profits generated through Blackbox System web application subscription revenues.

 

The consolidated financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company's ability to continue as a going concern.  There is no assurance that the Company will be successful in its efforts to raise funds through sales of stock or obtain debt financing or generate subscription revenues sufficient to meet our capital needs. These factors raise substantial doubt about the ability of the Company to continue as a going concern.

XML 19 R8.htm IDEA: XBRL DOCUMENT v3.5.0.2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
9 Months Ended
Sep. 30, 2016
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3. 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 ("GAAP"). The financial statements reflect all adjustments that are, in the opinion of management, necessary to fairly present such information. All such adjustments are of a normal recurring nature. Although the Company believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures, including a description of significant accounting policies normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. 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, 2015.  The accompanying unaudited financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results for any subsequent quarter or the entire year ending December 31, 2016.

 

Basis of Presentation - The accompanying financial statements were prepared in conformity with GAAP.

 

Use of Estimates – Blackboxstocks' 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.

 

Recently Issued Accounting Pronouncements - During the nine months ended September 30, 2016 and 2015, there were several new accounting pronouncements issued by the Financial Accounting Standards Board ("FASB"). Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company's financial statements.

 

Property and Equipment - Blackboxstocks is engaged in the development of its proprietary Blackbox System technology, an algorithm driven system, through a combination of in house system analysts and outside contractors.  The Company's Blackbox System software is still in development and will be expensed until the software reaches technological feasibility.

 

The Company's property and equipment acquired during 2015 was placed in service effective January 1, 2016 and depreciated on the straight line basis over an estimated useful life of three years beginning in 2016.

 

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.  Therefore, 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.  At September 30, 2016 and 2015, the potential dilution would be 5,000,000 shares of common stock in the event the issued and outstanding shares of Series A Convertible Preferred Stock are converted.

 

Revenue Recognition - The Company recognizes revenue from the sale of subscriptions for the use of the Blackbox System web application, when persuasive evidence of an arrangement exists, delivery and collectability is probable. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities.  During the quarter ended September 30, 2016 the Company launched its Blackbox System web application and began generating subscription sales revenue.

 

XML 20 R9.htm IDEA: XBRL DOCUMENT v3.5.0.2
STOCKHOLDERS' EQUITY
9 Months Ended
Sep. 30, 2016
STOCKHOLDERS' EQUITY  
STOCKHOLDERS' EQUITY

4.   Stockholders' Equity

 

At December 31, 2015 the Company had 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").  As of September 30, 2016, there were 20,220,000 shares of Common Stock issued and outstanding, including 15,000,000 shares issued in exchange for proprietary assets contributed by our President and a third party vendor (Note 6).

 

Shares of Series A Convertible Preferred Stock have a $0.001 par value, do not accumulate dividends, and are convertible into shares of Common Stock on a one-for-one basis.  Additionally, each share entitles the holder to 100 votes and, with respect to dividend and liquidation rights, the shares rank pari passu with the Company's Common Stock.

 

On December 1, 2015, the Company entered into an Exchange Agreement with Tiger Trade and its Stockholders (Note 1). Under the terms and conditions of the Exchange Agreement, the Company offered and sold Seventeen Million Nine Hundred Thousand (17,900,000) newly issued shares of Company Common Stock and Five Million (5,000,000) newly issued shares of Company Series A Convertible Preferred Stock in consideration for all the issued and outstanding shares of Tiger Trade capital stock. The effect of the issuance was that Tiger Trade stockholders acquired approximately 85.91% of the issued and outstanding shares of Company Common Stock and 100% of the issued and outstanding shares of Company Series A Convertible Preferred Stock. Tiger Trade became a wholly owned subsidiary of the Company as a result of the Exchange Agreement transaction.

 

Tiger Trade was subsequently merged with and into the Company on February 9, 2016, at which time all of the outstanding shares of capital stock of Tiger Trade outstanding immediately before the effective date were canceled, retired and ceased to exist.

 

On February 10, 2016, the Company entered into a Stock Cancellation Agreement with Gust C. Kepler, a Director, President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company, pursuant to which Mr. Kepler cancelled and forfeited 835,010 shares of the Company's Common Stock.

 

During the quarter ended September 30, 2016, the Company issued a total of 220,000 shares of Common Stock at a cash price of $0.50 per share for a total of $110,000. However, the Company subsequently honored a request by one investor to rescind the purchase of 200,000 of such shares of Common Stock on October 28, 2016 (Note 9).

 

XML 21 R10.htm IDEA: XBRL DOCUMENT v3.5.0.2
STOCK OPTIONS AND WARRANTS
9 Months Ended
Sep. 30, 2016
STOCK OPTIONS AND WARRANTS  
STOCK OPTIONS AND WARRANTS

5.  Stock Options and Warrants

 

Costs attributable to the issuance of stock options and share purchase warrants are measured at fair value at the date of issuance and offset with a corresponding increase in 'Additional Paid in Capital' at the time of issuance.  When the options or warrants are exercised, the receipt of consideration is an increase in stockholders' equity.  There was no stock option or warrant activity during the nine months ended September 30, 2016 and 2015 and as of November 14, 2016 no options or warrants were outstanding.

XML 22 R11.htm IDEA: XBRL DOCUMENT v3.5.0.2
RELATED PARTY TRANSACTIONS
9 Months Ended
Sep. 30, 2016
RELATED PARTY TRANSACTIONS  
RELATED PARTY TRANSACTIONS

6.  Related Party Transactions

 

During the quarter ended September 30, 2016, Gust C. Kepler, a Director, President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company advanced $19,082 to the Company. The advance is unsecured and bears no interest.

 

During the period April 28, 2014 through March 31, 2016, the Company (and its predecessor, Tiger Trade) engaged the services of Karma Black Box LLC ("Karma"), which became a Company stockholder as a result of the Exchange Agreement (Note 4), for application development services of the Company's Blackbox System technology.   Karma was issued 5,000,000 shares of Tiger Trade common stock in exchange for some of the services valued at $5,000.  Karma's Tiger Trade shares were exchanged for Company Common Stock on a one-for-one basis under the terms of the Exchange Agreement.  At September 30, 2016 and December 31, 2015, there was no accounts payable owed to Karma.

 

G2 International, Inc. ("G2"), which does business as IPA Tech Group ("IPA") (Note 8), is a company wholly owned by Gust C. Kepler, a Director, President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company, and the Company's controlling stockholder. During the nine months ended September 30, 2016 and 2015, G2 provided software development services to the Company in exchange for fees totaling $0 and $3,000, respectively.  In 2016 G2/IPA refunded $130,450 of prepayments leaving a prepaid balance of $24,050 as of November 14, 2016.  During the nine months ended September 30, 2016 and 2015, the Company incurred $0 and $126,051 of expenses with G2, respectively.  At September 30, 2016 and December 31, 2015, there were no accounts payable owed to G2.

XML 23 R12.htm IDEA: XBRL DOCUMENT v3.5.0.2
Notes Payable
9 Months Ended
Sep. 30, 2016
Notes Payable:  
Notes Payable

7.  Notes Payable

 

On April 29, 2016 a third party advanced $50,000 to the Company in exchange for a six month promissory note accruing interest at a rate of 10% per annum and secured by all assets and personal property of the Company.  Accrued interest on the note was $2,139 as of September 30, 2016.

 

XML 24 R13.htm IDEA: XBRL DOCUMENT v3.5.0.2
COMMITMENTS AND CONTINGENCIES
9 Months Ended
Sep. 30, 2016
COMMITMENTS AND CONTINGENCIES  
COMMITMENTS AND CONTINGENCIES

8.  Commitments and Contingencies

 

The Company entered into a sublease agreement with G2 effective July 1, 2015 subject to the terms and conditions of the office lease between G2 and Teachers Insurance and Annuity Association of America for approximately 1,502 square feet of office space at 5430 LBJ Freeway, Dallas, Texas.  The sublease agreement expires March 31, 2020.  During the nine months ended September 30, 2016 we incurred $33,742 in office rental expense.

 

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.

 

XML 25 R14.htm IDEA: XBRL DOCUMENT v3.5.0.2
SUBSEQUENT EVENTS
9 Months Ended
Sep. 30, 2016
Subsequent Events  
Subsequent Events

9.  Subsequent Events

 

On October 26, 2016, Blackboxstocks Inc. entered into a Stock Purchase Agreement (the "Purchase Agreement") with a resident of Singapore (the "Investor"), pursuant to which the Company sold 3,000,000 shares of the Company's Common Stock in a private offering to the Investor at a price of $0.50 per share, for total consideration to the Company of $1,500,000.

 

On October 28, 2016 the Company entered into a Rescission and Release Agreement with an investor pursuant to which the Company granted rescission of the purchase of 200,000 of such shares of Common Stock purchased on July 22, 2016.

XML 26 R15.htm IDEA: XBRL DOCUMENT v3.5.0.2
SIGNIFICANT ACCOUNTING POLICIES (POLICIES)
9 Months Ended
Sep. 30, 2016
SIGNIFICANT ACCOUNTING POLICIES (POLICIES):  
Basis of Presentation

Basis of Presentation - The accompanying financial statements were prepared in conformity with GAAP.

 

Use of Estimates

Use of Estimates – Blackboxstocks' 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.

 

Recently Issued Accounting Pronouncements , Policy

Recently Issued Accounting Pronouncements - During the nine months ended September 30, 2016 and 2015, there were several new accounting pronouncements issued by the Financial Accounting Standards Board ("FASB"). Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company's financial statements.

 

Property and Equipment

Property and Equipment - Blackboxstocks is engaged in the development of its proprietary Blackbox System technology, an algorithm driven system, through a combination of in house system analysts and outside contractors.  The Company's Blackbox System software is still in development and will be expensed until the software reaches technological feasibility.

 

The Company's property and equipment acquired during 2015 was placed in service effective January 1, 2016 and depreciated on the straight line basis over an estimated useful life of three years beginning in 2016.

Earnings or (Loss) Per Share

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.  Therefore, 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.  At September 30, 2016 and 2015, the potential dilution would be 5,000,000 shares of common stock in the event the issued and outstanding shares of Series A Convertible Preferred Stock are converted.

Revenue Recognition

Revenue Recognition - The Company recognizes revenue from the sale of subscriptions for the use of the Blackbox System web application, when persuasive evidence of an arrangement exists, delivery and collectability is probable. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities.  During the quarter ended September 30, 2016 the Company launched its Blackbox System web application and began generating subscription sales revenue.

 

XML 27 R16.htm IDEA: XBRL DOCUMENT v3.5.0.2
ORGANIZATION (Details)
Feb. 10, 2016
shares
ORGANIZATION Details  
Company, pursuant to which Mr. Kepler cancelled and forfeited shares of Company Common Stock 835,010
XML 28 R17.htm IDEA: XBRL DOCUMENT v3.5.0.2
GOING CONCERN (Details)
Sep. 30, 2016
USD ($)
GOING CONCERN:  
Company anticipates additional costs of One Million Dollars ($1,000,000) to $ 2,000,000
XML 29 R18.htm IDEA: XBRL DOCUMENT v3.5.0.2
EARNINGS OR (LOSS) PER SHARE (DETAILS) - shares
Sep. 30, 2016
Sep. 30, 2015
EARNINGS OR (LOSS) PER SHARE DETAILS    
Potential dilution common shares 5,000,000 5,000,000
XML 30 R19.htm IDEA: XBRL DOCUMENT v3.5.0.2
CAPITAL STOCK TRANSACTION (Details) - $ / shares
Sep. 30, 2016
Feb. 10, 2016
Dec. 31, 2015
Dec. 02, 2015
CAPITAL STOCK TRANSACTION:        
Company had authorized shares of preferred stock     10,000,000  
Company had authorized shares of preferred stock at par value     $ 0.001  
Series A Convertible Preferred Stock     5,000,000  
Series A Convertible Preferred Stock par value     $ 0.001  
Authorized shares of common stock     100,000,000  
Authorized shares of common stock par value     $ 0.001  
Common shares issued for proprietary assets contributed by President     15,000,000  
Shares of Common Stock issued and outstanding 20,220,000      
Shares of Common Stock have been issued     20,000,000  
Mr. Kepler cancelled and forfeited shares of Company   835,010    
Company offered and sold newly issued shares of the Company Common Stock       17,900,000
Company offered newly issued shares of Series A Convertible Preferred Stock       5,000,000
Issued and outstanding shares of Company Common Stock       85.91%
Issued and outstanding shares of Company Preferred Stock       100.00%
XML 31 R20.htm IDEA: XBRL DOCUMENT v3.5.0.2
Common Stock share (Details) - USD ($)
3 Months Ended
Sep. 30, 2016
Oct. 28, 2016
Common Stock share Details    
Company issued a total of shares of Common Stock 220,000  
Common stock cash price per share $ 0.50  
Common Stock at a cash price of $0.50 per share for a total value $ 110,000  
Company subsequently honored a request by one investor to rescind the purchase of shares   200,000
XML 32 R21.htm IDEA: XBRL DOCUMENT v3.5.0.2
RELATED PARTY TRANSACTION (Details) - USD ($)
3 Months Ended 9 Months Ended 23 Months Ended
Sep. 30, 2016
Sep. 30, 2016
Sep. 30, 2015
Mar. 31, 2016
Nov. 14, 2016
RELATED PARTY TRANSACTION Details          
Gust C. Kepler, a Director, President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company advanced to the company $ 19,082        
Issued shares of common stock in exchange for some of the services       5,000,000  
Issued shares of common stock in exchange for some of the services valued at       $ 5,000  
G2 International, Inc. (G2)          
Software development services to the Company   $ 0 $ 3,000    
Refunded of these prepayments   130,450 0    
G2/IPA prepayments leaving a prepaid balance         $ 24,050
Company incurred expenses   $ 0 $ 126,051    
XML 33 R22.htm IDEA: XBRL DOCUMENT v3.5.0.2
NOTES PAYABLES (Details) - USD ($)
Sep. 30, 2016
Apr. 29, 2016
Notes Payable Details    
Third party advanced to the Company   $ 50,000
Accruing interest at a rate   10.00%
Accrued interest on the note $ 2,139  
XML 34 R23.htm IDEA: XBRL DOCUMENT v3.5.0.2
COMMITMENTS AND CONTINGENCIES (DETAILS)
9 Months Ended
Sep. 30, 2016
USD ($)
Jul. 01, 2015
COMMITMENTS AND CONTINGENCIES DETAILS    
The Company entered into a sublease agreement with G2.The office lease between G2 and Teachers Insurance and Annuity Association of America office space in acres   1,502
Office rental expense $ 33,742  
XML 35 R24.htm IDEA: XBRL DOCUMENT v3.5.0.2
SUBSEQUENT EVENTS (DETAILS) - USD ($)
Oct. 28, 2016
Oct. 26, 2016
Company sold shares of the company common stock in a private offering to the investor.   3,000,000
Common Stock in a private offering to the Investor at a price of   $ 0.50
Private offering to the Investor shares valued at   $ 1,500,000
Company granted rescission of the purchase of such shares 200,000  
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