10-Q

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, 2019

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)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

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

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

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

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☒
	Emerging growth company ☒

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

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

The number of shares outstanding of the registrant’s Common Stock as of November 12, 2019 was 7,883,231.

TABLE OF CONTENTS

		Page
INTRODUCTORY COMMENT		1
CAUTION REGARDING FORWARD LOOKING STATEMENTS		1
PART I –FINANCIAL INFORMATION		2
Item 1.	Financial Statements	2
	Balance Sheets as of September 30, 2019 (Unaudited) and December 31, 2018	2
	Statements of Operations for the Three and Nine Months Ended September 30, 2019  and 2018 (Unaudited)	3
	Statement of Stockholders’ Deficit for the Nine Months Ended September 30, 2019 and 2018 (Unaudited)	4
	Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018 (Unaudited)	5
	Notes to Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4.	Controls and Procedures	17
PART II – OTHER INFORMATION		18
Item 1.	Legal Proceedings	18
Item 1A.	Risk Factors	18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Mine Safety Disclosures	19
Item 5.	Other Information	19
Item 6.	Exhibits	19
Signatures		19

INTRODUCTORY COMMENT

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

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Our prospects are subject to uncertainties and risks. In this Quarterly Report on Form 10-Q (the “Report”), we make forward-looking statements that involve substantial uncertainties and risks. 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 service 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.

Balance Sheets

As of September 30, 2019 (Unaudited) and December 31, 2018  

	September 30,			December 31,
	2019			2018
Assets
Current assets:
Cash	$	35,101		$	28,001
Investments, market testing		12			-
Accounts receivable, net of allowance for doubtful accounts of $68,589 at September 30, 2019 and December 31, 2018, respectively		3,759			3,719
Advances receivable, related parties (Note 5)		29,849			-
Prepaid expenses		107,646			107,646
Prepaid expenses, related party (Note 5)		36,700			36,700
Total current assets		213,067			176,066
Property and equipment:
Office, computer and related equipment, net of depreciation of $36,944 and $28,802 at September 30, 2019 and December 31, 2018, respectively		12,208			18,763
Domain name, net of amortization of $8,118 and $3,821 at September 30, 2019 and December 31, 2018, respectively		9,074			13,371
Software development, net of amortization of $9,000 and $7,312 at September 30, 2019 and December 31, 2018, respectively		-			1,688
Right of use lease, net of amortization of $37,869 at September 30, 2019		122,204			-
Total property and equipment		143,486			33,822
Total Assets	$	356,553		$	209,888
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable	$	559,523		$	525,136
Accrued expenses		-			128,000
Accrued interest		23,977			834
Accrued interest, related party		13,000			2,080
Unearned subscriptions		108,377			90,034
Lease liability right of use, current		47,141			-
Other liabilities		180,000			180,000
Advances payable		11,100			-
Advances payable, related party (Note 5)		25,000			36,382
Convertible notes payable, net of discount of $180,346 as of September 30, 2019 (Note 8)		369,654			-
Notes payable, net of note discount of $25,571 and $25,435 at September 30, 2019 and December 31, 2018, respectively (Note 6)		191,139			165,889
Notes payable, related party (Note 7)		228,000			228,000
Total current liabilities		1,756,911			1,356,355
Lease liability right of use, long term		77,976			-
Commitments and contingencies (Note 9)
Stockholders' Deficit:
Preferred stock, $0.001 par value, 5,000,000 shares authorized; no shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively		-			-
Series A Convertible Preferred Stock, $0.001 par value, 5,000,000 shares authorized; 5,000,000 issued and outstanding at September 30, 2019 and December 31, 2018, respectively		5,000			5,000
Common stock, $0.001 par value, 100,000,000 shares authorized: 7,883,231 and 7,678,047 issued and outstanding at September 30, 2019 and December 31, 2018, respectively		7,883			7,678
Common stock, subscribed		35,060			144,060
Additional paid in capital		3,476,332			2,543,264
Accumulated deficit		(5,002,609	)		(3,846,469	)
Total Stockholders' Deficit		(1,478,334	)		(1,146,467	)
Total Liabilities and Stockholders' Deficit	$	356,553		$	209,888

2

Blackboxstocks Inc.

Statements of Operations 

For the Three and Nine Months Ended September 30, 2019 and 2018

(Unaudited)

	For the three months						For the nine months
	ended September 30,						ended September 30,
	2019			2018			2019			2018
Revenue:
Subscriptions	$	289,632		$	188,179		$	755,244		$	478,849
Other revenues		6,700			2,000			21,245			2,000
Total revenues		296,332			190,179			776,489			480,849
Cost of operations		195,344			156,366			525,670			474,379
Gross margin		100,988			33,813			250,819			6,470
Expenses:
Software development costs		27,140			32,234			102,489			47,034
General and administrative		317,134			332,986			902,885			715,289
Depreciation and amortization		4,196			6,482			14,128			15,992
Total operating expenses		348,470			371,702			1,019,502			778,315
Operating loss		(247,482	)		(337,889	)		(768,683	)		(771,845	)
Interest expense		37,373			13,033			94,078			25,574
Other expense		-			(21	)		-			-
Amortization of debt discount		223,004			-			293,379			-
Loss before income taxes		(507,859	)		(350,901	)		(1,156,140	)		(797,419	)
Income taxes		-			-			-			-
Net loss	$	(507,859	)	$	(350,901	)	$	(1,156,140	)	$	(797,419	)
Weighted average number of common shares outstanding - basic		7,788,008			7,667,942			7,701,581			7,667,096
Net loss per share - basic	$	(0.07	)	$	(0.05	)	$	(0.15	)	$	(0.10	)

3

Blackboxstocks Inc.

Statement of Stockholders’ Deficit

For the Nine Months Ended September 30, 2019 and 2018 (Unaudited)

	Series A Preferred Stock				Preferred Stock				Common Stock				Common Stock			Additional Paid-in		Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Subscribed			Capital		Deficit			Total
Balance at December 31, 2017		5,000,000	$	5,000		-	$	-		7,667,047	$	7,667	$	-		$	2,510,275	$	(2,694,587	)	$	(171,645	)
Issuance of shares		-		-		-		-		7,333		7		-			21,993		-			22,000
Net loss		-		-		-		-		-		-		-			-		(797,419	)		(797,419	)
Balance at September 30, 2018		5,000,000	$	5,000		-	$	-		7,674,380	$	7,674	$	-		$	2,532,268	$	(3,492,006	)	$	(947,064	)
Balance at December 31, 2018		5,000,000	$	5,000		-	$	-		7,678,047	$	7,678	$	144,060		$	2,543,264	$	(3,846,469	)	$	(1,146,467	)
Issuance of shares for cash		-		-		-		-		191,354		191		(109,000	)		381,356		-			272,547
Issuance of shares in settlement of accrued expenses		-		-		-		-		13,830		14		-			127,986		-			128,000
Imputed discount on convertible notes payable (Note 8)		-		-		-		-		-		-		-			423,726		-			423,726
Net loss		-		-		-		-		-		-		-			-		(1,156,140	)		(1,156,140	)
Balance at September 30, 2019		5,000,000	$	5,000		-	$	-		7,883,231	$	7,883	$	35,060		$	3,476,332	$	(5,002,609	)	$	(1,478,334	)

4

Blackboxstocks Inc.

Statements of Cash Flows

For the Nine Months Ended September 30, 2019 and 2018

(Unaudited)

	2019			2018
Cash flows from operating activities
Net loss	$	(1,156,140	)	$	(797,419	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization expense		14,128			15,992
Amortization of note discount		346,088			20,420
Financing cost		26,275			-
Expenses paid by lendor		24,984			-
Changes in operating assets and liabilities:
Investments, market testing		(12	)		(524	)
Accounts receivable		(40	)		(2,346	)
Advances, related party		-			(1,500	)
Prepaid expenses		-			16,682
Accounts payable		34,387			187,012
Accrued salary		-			4,122
Accrued interest		23,143			3,533
Accrued interest, related party		10,920			-
Unearned subscriptions		18,343			69,187
Other liabilities		-			296,060
Net cash used in operating activities		(657,924	)		(188,781	)
Cash flows from investing activities
Purchases of property and equipment		(1,587	)		(20,684	)
Net cash used in investing activities		(1,587	)		(20,684	)
Cash flows from financing activities
Common stock issued for cash		272,547			22,000
Proceeds from notes payable		175,684			248,015
Proceeds from convertible notes payable		473,725			-
Repayment of notes payable		(225,214	)		(55,505	)
Advances from others		11,100			-
Cash advances from related parties		93,442			122,000
Cash repayments to related parties		(134,673	)		(99,071	)
Net cash provided by financing activities		666,611			237,439
Net increase in cash		7,100			27,974
Cash - beginning of period		28,001			8,155
Cash - end of period	$	35,101		$	36,129
Supplemental disclosure- Non-cash investing and financing activities:
Acquisition of equipment in exchange for note payable	$	-		$	8,309
Discount on notes payable	$	52,845		$	-
Lease, right of use and liability	$	160,073		$	-
Discount on convertible notes payable	$	473,725		$	-
Common stock issued in settlement of accrued expenses	$	128,000		$	-

5

Blackboxstocks Inc.

Notes to Financial Statements

For the Three and Nine Months Ended September 30, 2019 and 2018

1. Organization

Blackboxstocks Inc. (the “Company”) was incorporated on October 4, 2011 under the laws of the State of Nevada under the name SMSA Ballinger Acquisition Corp. to effect the reincorporation of Senior Management Services of Heritage Oaks at Ballinger, Inc., a Texas corporation, mandated by a Plan of Reorganization confirmed by the United States Bankruptcy Court for the Northern District of Texas for reorganization under Chapter 11 of the United States Bankruptcy Code.

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. As a result of the Exchange Agreement transaction, the Tiger Trade stockholders acquired approximately 88.64% of the issued and outstanding capital stock of the Company, and Tiger Trade became a wholly owned subsidiary of the Company. 

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 the Tiger Trade corporate entity ceased to exist.

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 and marketing web and mobile based analytical software tools as a subscription based software as a service (the “Blackbox System”) to serve as a tool for day traders and swing traders on various securities exchanges and markets, including the OTC Markets Group, Inc. (“OTC”), the New York Stock Exchange, the NYSE MKT, LLC (formerly the American Stock Exchange), the NASDAQ markets, the Hong Kong Stock Exchange (“HKEX”), the Shanghai Stock Exchange (“SSE”) and the Shenzhen Stock Exchange (“SZSE”).

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern, which is dependent upon the Company's ability to obtain sufficient financing or establish itself as a profitable business.  At September 30, 2019, the Company had an accumulated deficit of $5,002,609 and for the nine months ended September 30, 2019 and 2018, the Company incurred net losses of $1,156,140 and $797,419, respectively.  These conditions raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans with respect to operations include the sustained and aggressive marketing of subscriptions for the Blackbox System both domestically and abroad and raising additional capital through sales of equity or debt securities as may be necessary to pursue its business plans and sustain operations until such time as the Company can achieve profitability. Management believes that aggressive marketing combined with additional financing as necessary will result in improved operations and cash flow. 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.

2. Summary of Significant Accounting Policies

The accompanying interim unaudited financial statements and footnotes of Blackboxstocks Inc. have been prepared in accordance with 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 the rules and regulation so fthe SEC 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. 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, 2019.

6

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

Use of Estimates – The Company’s financial statement preparation requires that management make estimates and assumptions which affect the reporting of assets and liabilities and the related disclosure of contingent assets and liabilities in order to report these financial statements in conformity with GAAP.  Actual results could differ from those estimates.

Cash - Cash includes all highly liquid investments that are readily convertible to known amounts of cash and have original maturities at the date of purchase of three months or less.

Fair Value of Financial Instruments - The Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement, defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the customer’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time.

Recently Issued Accounting Pronouncements - During the nine months ended September 30, 2019 and 2018, there were several new accounting pronouncements issued by the 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.

In February 2016, the FASB issued ASU 2016-02, Leases. This is a comprehensive new leases standard that amends various aspects of existing guidance for leases and requires additional disclosures about leasing arrangements. It requires all leases that have a term in excess of 12 months be recognized on the balance sheet with the liability for lease payments and the corresponding right-of-use asset value based on the present value of future aggregate payments. Recognition of the costs of these leases on the income statement will be dependent upon their classification as either an operating or a financing lease. Costs of an operating lease will continue to be recognized as a single operating expense on a straight-line basis over the term of the lease. Costs for a financing lease will be disaggregated and recognized as both an operating expense (for the amortization of the right-of-use asset) and interest expense (for interest on the lease liability). This standard became effective beginning January 1, 2019 and was adopted on our financial statements. The Company recorded the right-of-use asset for the lease in the amount of $160,073 and the related lease liability. The current liability for the lease is $47,141 and non-current of $77,976 as of September 30, 2019.

Property and Equipment - The Company 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 firms. The Company’s Blackbox System software for use in China was in development and costs were expensed until the software reached technological feasibility in April 2017 and capitalized until May 15, 2017 when the Blackbox System for use in China was marketable.

7

The Company’s property and equipment is being depreciated on the straight-line basis over an estimated useful life of three years.

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, 2019 and 2018, the potential dilution would be 5,300,031 and 5,000,000 shares of common stock in the event the issued and outstanding shares of Series A Convertible Preferred Stock or other potentially dilutive securities be exercised.

Share-Based Payment - Under ASC Topic 718, Compensation - Stock Compensation, all share based payments to employees, including share option grants, are to be recognized in the statement of operations based on their fair values. No share-based payments were issued for the nine months ended September 30, 2019 and 2018.

Revenue Recognition - On January 1, 2018, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers” (ASC 606) and adoption of the new standard had no impact on the Company’s statements of operations or balance sheets. Revenue is recognized from the sale of subscriptions for the use of the Blackbox System web application, on a monthly or annual basis. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities. The Company launched its Blackbox System web application and began generating subscription sales revenues during the quarter ended September 30, 2016. Revenue related to annual subscriptions is recognized each month with unearned subscriptions reflected as a current liability.

Other Liabilities - The Company is planning the development of a future product, a complimentary platform that will share similar IP protocol with the current Blackbox System on a subscription basis. The future product has not yet launched. The Company has received advance payments from a new subscriber group in anticipation of the development of this future product. These amounts are deferred until such time as the platform is launched and the services earned. As of September 30, 2019, the Company has received $180,000 from this future subscriber group.

Software Development Costs - Blackboxstocks is engaged in the development of its proprietary Blackbox System technology, a proprietary algorithm driven system, through a combination of in-house system analysts and outside contractors. Under the guidelines of ASC Topic 985, “Software”, the cost of the Company’s Blackbox System was expensed during development and the Blackbox System software for use in the United States, reached technical feasibility in August 2016, became marketable and was made available to subscribers beginning September 1, 2016. The Blackbox System for use in China achieved technological feasibility and became marketable and available to subscribers during the quarter ended June 30, 2017. Subsequent to that time, in accordance with ASC Topic 985 these costs were expensed. Costs incurred during this period were capitalized and amortized.

Domain Name - The Company acquired a domain name for its exclusive use in anticipation of its rollout within the next three years. The cost was capitalized and due to the uncertainty of our ability to successfully market this name, we elected to amortize the cost over a period of three years.

Prepaid Expenses - Prepaid expenses are current assets created when the Company makes payments or incurs an obligation for expenses identified for a future period. These amounts are charged to expense as the services are provided.

8

Marketing Costs - The Company incurs significant marketing expenses related to the development and expansion of its subscription base to potential users. During the nine months ended September 30, 2019 and 2018, the Company reported $201,299 and $107,957 for marketing costs, respectively.

Contingencies - Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and legal counsel assess such contingent liabilities, and such assessment inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.

If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements.

If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.

3.   Stockholders’ Deficit

The Company has authorized 10,000,000 shares of preferred stock at $0.001 par value, 5,000,000 of which are designated as “Series A Convertible Preferred Stock” at $0.001 par value and 100,000,000 authorized shares of common stock at $0.001 par value (“Common Stock”).

Shares of Series A Convertible Preferred Stock 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.

The Company announced and approved a reverse stock split effective July 15, 2019 at a ratio of 1 for 3, whereby every 3 shares of common stock issued and outstanding were automatically reclassified and combined into one share of common stock (“Reverse Stock Split”). The Reverse Stock Split has been reflected retroactively in these financial statements for all periods presented.

During the nine months ended September 30, 2019, the Company issued 30,833 shares of Common Stock at a cash price of $3.00 per share for a total of $92,500 and 3,333 shares of Common Stock for an aggregate cash price of $6,500 for subscriptions received during the year ended December 31, 2018.

During the nine months ended September 30, 2019 the Company issued 3,334 shares of Common Stock for an aggregate cash price of $10,000 for subscriptions received during the year ended December 31, 2018.

On April 10, 2019 the Company sold 51,282 shares of Common Stock and a Warrant, exercisable for a period of 5 years, to purchase 33,333 shares of Common Stock at an exercise price of $1.95 per share, to a third party for aggregate consideration of $100,000.

On or about May 7, 2019 the Company sold 25,641 shares of Common Stock to a third party at a price of $1.95 per share, for aggregate consideration of $50,000.

9

On or about May 22, 2019 the Company sold 12,821 shares of Common Stock and a Warrant, exercisable for a period of 5 years, to purchase 6,410 shares of Common Stock at an exercise price of $1.95 per share to a third party for aggregate consideration of $25,000.

On or about June 4, 2019 the Company sold 51,282 shares of Common Stock and a Warrant, exercisable for a period of 5 years, to purchase 25,641 shares of Common Stock at an exercise price of $1.95 per share, to a third party for aggregate consideration of $100,000.

On August 29, 2019 the Company sold 12,821 shares of Common Stock and a Warrant, exercisable for a period of 5 years, to purchase 6,411 shares of Common Stock at an exercise price of $1.95 per share, to a third party for aggregate consideration of $25,000.

4. 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. The fair value cost is computed utilizing the Black-Scholes model and assuming volatility based on U.S. Treasury yield rates for a similar period.

When the options or warrants are exercised, the receipt of consideration is an increase in stockholders’ equity.

Concurrently with certain of the securities purchase agreements entered into as described in Note 3 above, warrants to purchase the Company’s Common Stock were issued to the subscribers. Each warrant is exercisable for a period of five years from the date of the securities purchase agreement at an exercise price of $1.95 per share. The fair value cost at the date of issuance of the warrants was $502,398. There was no warrant activity during the nine months ended September 30, 2018 and as of September 30, 2019, there are 71,795 warrants outstanding.

	Number of Shares		Exercise Price
Warrants as of December 31, 2018		-		-
Issued during 2019		71,795		$1.95
Warrants as of September 30, 2019		71,795		$1.95

5.  Related Party Transactions

During the nine months ended September 30, 2019, Gust C. Kepler, a Director, President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company advanced $68,442 to the Company and he was repaid $133,173. The balance remaining of $28,349 is owed to the Company, is unsecured and bears no interest.

During the nine months ended September 30, 2019 the Company advanced $1,500 to its VP/Director of Operations and the balance remains outstanding, is unsecured and bears no interest.

During the nine months ended September 30, 2019 and 2018, the Company engaged the services of Karma Black Box LLC (“Karma”), whose two stockholders became Company stockholders as a result of the Exchange Agreement with Tiger Trade and its stockholders (Note 1), for application development services of the Company’s Blackbox System technology. Karma began operating as EDM Operators (“EDM”) in the last quarter of 2018. During the nine months ended September 30, 2019 and 2018, Karma/EDM was paid $13,500 and $36,000 for services, respectively.

During the nine months ended September 30, 2019, one of the stockholders of EDM advanced $25,000 to the Company. The balance of $25,000 remains outstanding as of September 30, 2019 is unsecured and bears no interest.

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G2 International, Inc. (“G2”), which does business as IPA Tech Group (“IPA”), 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. As of September 30, 2019 the Company has a prepaid balance of $36,700 for public relations and marketing services with G2/IPA. These funds are reserved in anticipation of a future campaign to move the Company’s stock to listing on a national exchange.

6. Notes Payable

On September 13, 2019 a third party advanced $90,000 to the Company in exchange for quasi-factoring financing arrangements to be repaid in daily installments of $490, through August 18, 2020. The related note discount of $27,000 is being amortized over the term of the agreement for a total of $1,429 in interest expense as of September 30, 2019.

On April 2, 2019 an additional $19,000 was advanced to be repaid in daily installments of $315.56, through August 8, 2019. The related note discount of $9,400 was amortized over the term of the agreement for a total of $9,400 in interest expense as of September 30, 2019.

On March 29, 2019 a third party advanced $38,755 to the Company in exchange for quasi-factoring financing arrangements to be repaid in daily installments, currently $460, through September 12, 2019. The related note discount of $16,445 was amortized over the term of the agreement for a total of $16,445 in interest expense as of September 30, 2019.

On February 19, 2019 a third party advanced $50,000 to the Company in exchange for a promissory note bearing interest at 12% per annum for a ninety-day period, maturing on May 20, 2019. This note and accrued interest of $2,000 was paid in full on June 17, 2019

During the year ended December 31, 2018 third parties advanced a total of $121,821 to the Company in exchange for quasi-factoring financing arrangements to be repaid in daily installments, currently $450, through September 18, 2019. The related note discounts of $55,190 was amortized over the term of the agreements for a total of $55,190 in interest expense as of September 30, 2019.

On June 26, 2018 the Company entered into a note payable with a third party for $8,309 for the purchase of office telecommunication equipment. The note bears interest at the rate of 18% per annum for 36 installments and matures on May 22, 2021.

On August 8, 2018 a third party advanced $200,000 to the Company in exchange for a secured promissory note, bearing interest at the rate of 12% per annum with a maturity date of November 20, 2018. The note is secured by a Security Agreement providing for a continuing lien and first priority security interest in the assets of the Company and by a personal Guaranty Agreement with Gust Kepler, a Director, President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company, and the Company’s controlling stockholder. On December 6, 2018, Mr. Kepler made a payment on the note in the amount of $100,000 plus accrued interest of $8,000 for an aggregate of $108,000. The principal balance of $100,000 remains outstanding and is in default as of September 30, 2019, although the holder has made no demand for settlement of the note.

7. Notes Payable, Related Party

On November 9, 2018, Gust C. Kepler, a Director, President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company advanced $120,000 to the Company in exchange for a promissory note bearing interest at 12% per annum for a ninety-day period, maturing on January 28, 2019. The note remains unpaid as of September 30 and is in default; however, no demand for repayment has been made by the holder.

On December 6, 2018, Gust C. Kepler, a Director, President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company advanced $108,000 to the Company for payment to a third party note holder (Note 6) in exchange for an unsecured promissory note.

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8. Convertible Notes Payable

On May 21, 2019, the Company issued an 8% Fixed Convertible Promissory Note payable to a third party for a total face value up to $550,000, which included an original issue discount of 10% on the investment amount of up to $500,000. The note specifies that the note holder shall retain an original issue discount of 10% of any consideration, bears interest of 8%, and matures 180 days from the effective date. If the Company prepays the note within 90 days, the Company must pay a cash redemption premium of 110%; if such prepayment is made between the 91st day and the 180th day, then such redemption premium is 115%. The note holder paid the first consideration of $350,000 was allowed thirty days to pay additional consideration, however no further consideration was remitted within the thirty days. Until maturity, the note holder may convert all or a portion of the outstanding principal into shares of Common Stock of the Company at a fixed conversion price equal to $1.95 per share. If the note is not retired on or before the maturity date, the note holder may convert a portion or all the outstanding principle into shares of the Company’s common stock at a variable conversion price which equals the lower of the fixed conversion price or 65% of the lowest closing bid price during the 15 consecutive trading days prior to the date of the note holder’s election to convert.

On July 17, 2019, the Company issued an 8% Fixed Convertible Promissory Note payable to a third party for a total face value of $165,000, which included an original issue discount of 10% on the investment amount of $150,000. The note specifies that the note holder shall retain an original issue discount of 10% of any consideration, bears interest of 8%, and matures 180 days from the effective date. If the Company prepays the note within 90 days, the Company must pay a cash redemption premium of 110%; if such prepayment is made between the 91st day and the 180th day, then such redemption premium is 115%. Until maturity, the note holder may convert all or a portion of the outstanding principal into shares of Common Stock of the Company at a fixed conversion price equal to $1.95 per share. If the note is not retired on or before the maturity date, the note holder may convert a portion or all the outstanding principle into shares of the Company’s common stock at a variable conversion price which equals the lower of the fixed conversion price or 65% of the lowest closing bid price during the 15 consecutive trading days prior to the date of the note holder’s election to convert.

9. 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. On August 28, 2017, the Company acquired and was assigned all right, title and interest in the lease from G2. On September 19, 2017 the Company amended the lease to expand its space by approximately 336 square feet for a total of 1,838 square feet and extended the expiration date to September 30, 2022. On January 1, 2019 the Company adopted ASC 842 requiring this lease to be recorded as an asset and corresponding liability on its balance sheet. The Company records rent expense associated with this lease on the straight-line basis in conjunction with the terms of the underlying lease. During the nine months ended September 30, 2019 and 2018 we incurred $39,732 and $45,299, respectively, in office rental expense. Future minimum rental payments under the extended lease for years ending December 31, are:

2019	$	14,037
2020		59,004
2021		61,800
2022		46,863

On June 18, 2018 the Company entered into a letter agreement with IC Ventures, Inc. (“ICV”), pursuant to which the Company retained ICV to provide strategic advisory services for marketing and financial matters relating to investment and acquisition issues which services commenced July 1, 2018. The agreement provided for a twenty-month (24) month term and that ICV would be compensated monthly in Company common stock valued at$20,000 with such compensation to be increased by $15,000 in cash for a twelve-month period during the term, payable in cash beginning on the earlier of (i) the election by the Company or (ii) the sixth full month following the execution of the agreement. The agreement also provided that ICV would be issued 920,000 shares of the Company’s common stock if listing on NASDAQ is achieved during the term of the agreement and ICV shall be paid a closing fee of 1.5% of gross proceeds or a minimum of $500,000 if the Company should be acquired during the term of the agreement or within 12 months of the termination of the agreement. On December 18, 2018 the Company terminated the agreement and during the quarter ended September 30, 2019 issued 13,830 shares of common stock in settlement of the $128,000 due to ICV.

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The Company engaged software design consulting services from a vendor for its Blackbox System which the Company found did not meet its standards and entered into negotiations to dispute the services rendered. The entity providing these services sought satisfaction through a complaint with the State of California for the disputed amount and a judgement in favor of the plaintiff/vendor was granted in the amount of $29,523.  This amount represents $24,920 for the disputed services, interest of $2,200 and legal costs of $2,403.  The Company is optimistic that a negotiated settlement of the judgement may be reached.  The aggregate of the judgement of $29,523 is included in accounts payable as of September 30, 2019.

On March 6, 2019 the Company entered into a letter agreement with Boustead Securities (“Boustead”), pursuant to which the Company retained Boustead to provide exclusive financial advisory services relating to corporate development, investment and acquisition issues. The agreement provides for an engagement fee of $20,000 due upon execution of the agreement; $5,000 upon the closing of any pre-initial public offering (“IPO”) financing and $25,000 upon the closing of the IPO. The agreement also provides for cash success fees should any business combination transactions or debt financing be achieved. Additionally, Boustead will earn warrants for purchase of the Company’s common stock for each debt financing transactions and success fees for any equity financing or initial public offering.

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.

10. Subsequent Events

On October 3, 2019 a third party advanced $50,000 to the Company in exchange for quasi-factoring financing arrangements to be repaid in daily installments of $409, through May 28, 2020. The related note discount of $19,000 will be amortized over the term of the agreement.

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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, 2018, as well as with our condensed financial statements and the notes thereto included elsewhere herein.

Overview

We are in the business of developing and marketing a real time analytical web based software as a service platform (the “Blackbox System”) that serves as a tool for day traders and swing traders on various securities exchanges and markets. Our proprietary Blackbox System technology is an algorithm driven 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 platform employs predictive technology enhanced by artificial intelligence to find volatility and unusual market activity that can result in the rapid change in a stock’s price. The Blackbox System was initially designed to monitor and analyze over 13,000 stocks on the OTC Markets Group, Inc. (“OTC”), New York Stock Exchange (“NYSE”), the NYSE American (formerly the American Stock Exchange), and NASDAQ markets simultaneously as our servers receive live data feeds from such markets. We have also customized our Blackbox System to analyze data from the Hong Kong Stock Exchange (“HKEX”), Shanghai Stock Exchange (“SSE”) and Shenzhen Stock Exchange (“SZSE”) for license and use primarily in Asia. We consider the Blackbox System technology to be among the most user-friendly of its kind.

We launched the Blackbox System web application for domestic use and made it available to subscribers in September 2016. Subscriptions for the use of the Blackbox System web application are sold on a monthly and/or annual subscription basis to individual consumers through our website at http://www.blackboxstocks.com.

Our principal office is located at 5430 LBJ Freeway, Suite 1485, Dallas, Texas 75240 and our telephone number is (972) 726-9203. Our Common Stock is quoted on the OTC Pink tier of the OTC Markets Group, Inc. (the “OTC Pink”) under the symbol “BLBX.” Our corporate website is located at http://www.blackboxstocks.com. We are not including the information contained in our website as part of, or incorporating it by reference into, this Report on Form 10-Q.

Basis of Presentation of Financial Information

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“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, 2019, the Company had an accumulated deficit of $5,002,609, and for the three and nine months ended September 30, 2019, incurred net losses of $507,859 and $1,156,140, respectively. By contrast, at September 30, 2018, the Company had an accumulated deficit of $3,492,006 and for the three and nine months ended September 30, 2018, incurred net losses of $350,901 and $797,419, respectively. Management expects that the Company will 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 19, 2019.

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Liquidity and Capital Resources

We launched the Blackbox System web application for domestic use and made it available to subscribers in September 2016, but we have not yet attained a level of subscription sales revenue that would allow us to meet our current overhead. We do not contemplate attaining profitable operations prior to the end of 2019, nor is there any assurance that such an operating level can ever be achieved.

At September 30, 2019, we had a cash balance of $35,101 and a working capital deficit of $1,543,844 as compared to a cash balance of $36,129 and a working capital deficit of $982,308 at September 30, 2018. As discussed below, during the nine months ended September 30, 2019 we raised approximately $272,548 in net proceeds to the Company from the sale of Common Stock and warrants for the purchase of Common Stock, $473,725 in net proceeds to the Company from the sale of two convertible promissory notes and $197,755 in net proceeds to the Company from other debt financing. Such cash amount is not sufficient to fund our plans of operation. As such, we will need to raise additional funds to carry out our plans of operation and fund our ongoing operational expenses including the marketing of our Blackbox System. We expect that costs and expenses necessary to implement our planned marketing operations over the next 12 months will be between $1 Million to $2 Million. Additional funding is expected to be generated through equity financing from the sale of our Common Stock and/or the incurrence of debt. If we are successful in completing equity financing, existing stockholders will experience dilution of their interest in our Company. We do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our Common Stock or debt to fund our plans of operation and ongoing operational expenses. In the absence of such financing, our business will likely fail. 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.

Sale of Common Stock and Warrants

During the nine months ended Sepember 30, 2019, the Company received subscriptions for 153,847 shares of Common Stock at a cash price of $1.95 per share for an aggregate of $300,000. In connection with certain of the sales, warrants to purchase up to 71,795 shares of the Company’s Common Stock at a cash price of $1.95 per share were issued to the subscribers. Sales commissions of $27,453 were paid in connection with the sales.

Sale of Convertible Promissory Note

On May 21, 2019, the Company issued an 8% Fixed Convertible Promissory Note payable to a third party for a total face value up to $550,000. The note specifies that the note holder shall retain an original issue discount of 10% of any consideration, bears interest of 8%, and matures 180 days from the effective date. The lender funded $350,000 of the principal amount under the note and the Company received $323,726 in net proceeds thereunder. Sales commissions of $26,274 were paid to Boustead Securities in connection with the transaction.

On July 17, 2019, the Company issued an 8% Fixed Convertible Promissory Note payable to a third party for a total face value of $165,000. The note specifies that the note holder shall retain an original issue discount of 10% of any consideration, bears interest of 8%, and matures 180 days from the effective date. The Company received $138,450 in net proceeds under the note after sales commissions of $11,550 were paid to Boustead Securities in connection with the transaction.

Other Debt Financing

On March 29, 2019 a third party advanced $38,755 to the Company in exchange for quasi-factoring financing arrangements to be repaid in daily installments, currently $460, through September 12, 2019. The related note discount of $16,445 is being amortized over the term of the note. On April 2, 2019 an additional $19,000 was advanced to be repaid in daily installments of $315.56, through August 8, 2019. The related note discount of $9,400 is being amortized over the term of the note. On September 13, 2019 $90,000 was advanced to be repaid in installments of $490 through August 18, 2020 and the related note discount of $27,000 is being amortized over the term of the note.

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On February 19, 2019 a third party advanced $50,000 to the Company in exchange for a promissory note bearing interest at 12% per annum for a ninety-day period, maturing on May 20, 2019.

Results of Operations

Comparison of Three Months Ended September 30, 2019 and 2018

For the three months ended September 30, 2019 and 2018, the Company’s revenue totaled $296,332 and $190,179, respectively, for which our respective costs of revenues totaled $195,344 and $156,366. The $106,153 increase in revenue resulted from an expanded subscription base for monthly revenues and other commission revenues from marketing partners. The majority of the costs of operations are data feed expenses for exchange information totaling approximately $87,188 for the three months ended September 30, 2019. Other costs of operations included subscriber referral program payments of $36,128 and customer retention payments of approximately $57,505 to certain select online program moderators, on-boarders and educator partners.

For the three months ended September 30, 2019, the Company had operating expenses totaling $348,470 compared to $371,702 for the same period in 2018, a decrease of $23,232. This change is primarily a result of an decrease in general and administrative expenses from $332,986 for the three months ended September 30, 2018 compared to $317,134 for the three months ended September 30, 2019. The decrease in general and administrative expenses of $15,852 was due to increases in financing expenses of $34,718; advertising expense of $8,979; professional services of $33,333; travel and entertainment of $14,941 and general administrative expenses of $14,771 netted with decreases in outside consulting services of $33,069; salary and related $5,411; computer and internet expenses of $84,114. Software development costs also decreased approximately $5,094 due to a credit for development expenses that was reported in the three months ended September 30, 2018. We also recorded depreciation and amortization expense of $4,196 for the three months ended September 30, 2019 compared to $6,482 for the three months ended September 30, 2018.

Comparison of Nine Months Ended September 30, 2019 and 2018

For the nine months ended September 30, 2019 and 2018, the Company’s revenue totaled $776,489 and $480,849, respectively, for which our respective costs of revenues totaled $525,670 and $474,379. The $295,640 increase in revenue resulted from an expanded subscription base for monthly revenues and commission revenues from marketing partners. The majority of the costs of operations are data feed expenses for exchange information totaling approximately $251,100 for the nine months ended September 30, 2019. Other costs of operations included subscriber referral program payments of approximately $87,502 and customer retention payment of approximately $147,787 to certain select online program moderators, on-boarders and educator partners.

For the nine months ended September 30, 2019, the Company had operating expenses totaling $1,019,502 compared to $778,315 for the same period in 2018, an increase of $241,187. This change is primarily a result of software development of $55,455 comprised of an increase of $24,295 in data feed expense and an increase in chat development expense of $33,711 resulting from a credit reported in 2018. General and administrative expenses increased by approximately $187,596, from $715,289 in the nine months ended September 30, 2018 to $902,885 over the same period in 2019 due to increases in professional services of $73,020; advertising and marketing of $93,342; public relations of $22,250; financing expenses of $85,993; general and administrative expenses of $12,481 and travel and related expense of $25,175, netted with decreases in salary and related costs of $5,037 and internet and computer expenses of $119,628. The Company also recorded depreciation and amortization expense of $14,128 for the nine months ended September 30, 2019 compared to $15,992 for the nine months ended September 30, 2018.          

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Off Balance Sheet Arrangements

As of September 30, 2019, we did not have any material 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.

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, 2019, 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, 2019 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, 2019 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.

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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 Proceeds

On August 29, 2019 the Company sold 12,821 shares of Common Stock and a Warrant, exercisable for a period of 5 years, to purchase 6,411 shares of Common Stock at an exercise price of $1.95 per share, to a third party for aggregate consideration of $25,000.

The Common Stock and Warrants described above were privately offered and sold in reliance upon exemptions from registration pursuant to Section 4(a)(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, were acquiring the securities for their own account and not with a view to the distribution thereof, and each investor qualified as an "accredited investor" as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act. Furthermore, no "general solicitation" 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.

All of the Company’s other sales of unregistered securities during the period covered by the Report have been previously reported as required in Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and/or current reports on Form 8-K.

Item 3. Defaults Upon Senior Securities

On August 8, 2018 a third party advanced $200,000 to the Company in exchange for a secured promissory note, bearing interest at the rate of 12% per annum with a maturity date of November 20, 2018. The note is secured by a Security Agreement providing for a continuing lien and first priority security interest in the assets of the Company and by a personal Guaranty Agreement with Gust Kepler, a Director, President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company, and the Company’s controlling stockholder. On December 6, 2018, Mr. Kepler made a payment on the note in the amount of $100,000 plus accrued interest of $8,000 for an aggregate of $108,000. The principal balance of $100,000 remains outstanding and is in default as of Sepember 30, 2019, although the holder has made no demand for settlement of the note.

On November 9, 2018, Gust C. Kepler, a Director, President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company advanced $120,000 to the Company in exchange for a promissory note bearing interest at 12% per annum for a ninety-day period, maturing on January 28, 2019. The note remains unpaid as of Sepember 30, 2019; however, no demand for repayment has been made by the holder.

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Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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 12, 2019	BLACKBOXSTOCKS INC.
	By:	/s/ Gust Kepler
		Gust Kepler
		President, Chief Executive Officer and Secretary (Principal Executive Officer and Principal Financial and Accounting Officer)

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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

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EX-31.1

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 12, 2019	/s/ Gust Kepler
	Gust Kepler
	Principal Executive Officer

EX-31.2

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 12, 2019	/s/ Gust Kepler
	Gust Kepler
	Principal Financial Officer

EX-32.1

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, 2019 (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

November 12, 2019

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

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, 2019 (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 12, 2019

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.

XML

Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Accounts receivable, allowance for doubtful accounts	$ 68,589	$ 68,589
Software development, amortization	9,000	7,312
Right of use lease, amortizationProperty and equipment, amortization	$ 37,869	$ 0
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	7,883,231	7,678,047
Common stock, shares outstanding (in shares)	7,883,231	7,678,047
Series A Preferred Stock [Member]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	5,000,000	5,000,000
Preferred stock, shares outstanding (in shares)	5,000,000	5,000,000
Convertible Notes Payable [Member]
Convertible notes payable, discount	$ 253,350	$ 0
Notes Payable, Other Payables [Member]
Convertible notes payable, discount	25,571	25,435
Internet Domain Names [Member]
Domain name, amortization	8,118	3,821
Machinery and Equipment [Member]
Property and equipment, depreciation	$ 36,944	$ 28,802

XML

Note 1 - Organization

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1.

O

rganization

Blackboxstocks Inc. (the “Company”) was incorporated on

October 4, 2011

under the laws of the State of Nevada under the name SMSA Ballinger Acquisition Corp. to effect the reincorporation of Senior Management Services of Heritage Oaks at Ballinger, Inc., a Texas corporation, mandated by a Plan of Reorganization confirmed by the United States Bankruptcy Court for the Northern District of Texas for reorganization under Chapter

11

of the United States Bankruptcy Code.

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. As a result of the Exchange Agreement transaction, the Tiger Trade stockholders acquired approximately

88.64%

of the issued and outstanding capital stock of the Company, and Tiger Trade became a wholly owned subsidiary of the Company. 

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 the Tiger Trade corporate entity ceased to exist.

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 and marketing web and mobile based analytical software tools as a subscription based software as a service (the “Blackbox System”) to serve as a tool for day traders and swing traders on various securities exchanges and markets, including the OTC Markets Group, Inc. (“OTC”), the New York Stock Exchange, the NYSE MKT, LLC (formerly the American Stock Exchange), the NASDAQ markets, the Hong Kong Stock Exchange (“HKEX”), the Shanghai Stock Exchange (“SSE”) and the Shenzhen Stock Exchange (“SZSE”).

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern, which is dependent upon the Company's ability to obtain sufficient financing or establish itself as a profitable business.  At

September 30, 2019,

the Company had an accumulated deficit of

$5,002,609

and for the

nine

months ended

September 30, 2019

and

2018,

the Company incurred net losses of

$1,156,140

and

$797,419,

respectively.  These conditions raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans with respect to operations include the sustained and aggressive marketing of subscriptions for the Blackbox System both domestically and abroad and raising additional capital through sales of equity or debt securities as

may

be necessary to pursue its business plans and sustain operations until such time as the Company can achieve profitability. Management believes that aggressive marketing combined with additional financing as necessary will result in improved operations and cash flow. 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.

XML

Note 9 - Commitments and Contingencies (Details Textual)			3 Months Ended	9 Months Ended
	Mar. 06, 2019 USD ($)	Jun. 18, 2018 USD ($) shares	Sep. 30, 2019 USD ($) ft² shares	Sep. 30, 2019 USD ($) ft²	Sep. 30, 2018 USD ($)	Sep. 19, 2017 ft²	Jul. 01, 2015 ft²
Area of Real Estate Property | ft²			1,838	1,838		336	1,502
Operating Lease, Expense				$ 39,732	$ 45,299
Stock Issued During Period, Value, Issued for Services				128,000
Consulting Services Agreement with Vendor [Member]
Litigation Settlement, Amount Awarded to Other Party				29,523
Loss Contingency, Damages Sought, Value				24,920
Litigation Settlement Interest				2,200
Litigation Settlement, Expense				$ 2,403
ICV [Member]
Monthly Compensation, Common Stock, Value		$ 20,000
Monthly Compensation, Common Stock, Value, Increase		$ 15,000
Agreement Covenant, Common Stock Issued Upon NASDAQ Listing | shares		920,000
Agreement Covenant, Closing Fee Percentage		1.50%
Agreement Covenant, Closing Fee Minimum		$ 500,000
Stock Issued During Period, Shares, Issued for Services | shares			13,830
Stock Issued During Period, Value, Issued for Services			$ 128,000
Boustead [Member]
Agreement Engagement Fee	$ 20,000
Agreement Covenenant, Pre-IPO Closing Fee	5,000
Agreement Covenant, IPO Closing Fee	$ 25,000

XML

Note 5 - Related Party Transactions (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Proceeds from Related Party Debt	$ 93,442	$ 122,000
Repayments of Related Party Debt	134,673	99,071
Prepaid Expenses, Related Party, Current	36,700		$ 36,700
Director, President, CEO,CFO, and Secretary [Member]
Proceeds from Related Party Debt	68,442
Repayments of Related Party Debt	133,173
Due to Related Parties, Total	28,349
Vice President [Member]
Due from Related Parties, Total	1,500
Karma and EDM [Member]
Payments to Related Party for Services	13,500	$ 36,000
Stockholder of EDM [Member]
Proceeds from Related Party Debt	25,000
Due to Related Parties, Total	25,000
G2 and IPA [Member]
Prepaid Expenses, Related Party, Current	$ 36,700

XML

Note 2 - Summary of Significant Accounting Policies (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Jan. 01, 2019	Dec. 31, 2018
Lease, Right-of-Use Asset	$ 122,204
Lease, Liability, Current	47,141
Lease, Liability, Noncurrent	$ 77,976
Property, Plant and Equipment, Useful Life	3 years
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	5,300,031	5,000,000
Share-based Payment Arrangement, Noncash Expense, Total	$ 0	$ 0
Other Liabilities, Current, Total	180,000			$ 180,000
Marketing Expense	$ 201,299	$ 107,957
Internet Domain Names [Member]
Finite-Lived Intangible Asset, Useful Life	3 years
Accounting Standards Update 2016-02 [Member]
Lease, Right-of-Use Asset			$ 160,073
Lease, Liability			$ 160,073

XML

Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis

of

Presentation

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

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

– The Company’s financial statement preparation requires that management make estimates and assumptions which affect the reporting of assets and liabilities and the related disclosure of contingent assets and liabilities in order to report these financial statements in conformity with GAAP.  Actual results could differ from those estimates.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash

- Cash includes all highly liquid investments that are readily convertible to known amounts of cash and have original maturities at the date of purchase of

three

months or less.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments

- The Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic

820,

Fair Value Measurement

, defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are

not

available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments

may

be made to ensure that financial instruments are recorded at fair value. These adjustments

may

include amounts to reflect counterparty credit quality and the customer’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Pronouncements

- During the

nine

months ended

September 30, 2019

and

2018,

there were several new accounting pronouncements issued by the 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.

In

February 2016,

the FASB issued ASU

2016

-

02,

Leases

. This is a comprehensive new leases standard that amends various aspects of existing guidance for leases and requires additional disclosures about leasing arrangements. It requires all leases that have a term in excess of

12

months be recognized on the balance sheet with the liability for lease payments and the corresponding right-of-use asset value based on the present value of future aggregate payments. Recognition of the costs of these leases on the income statement will be dependent upon their classification as either an operating or a financing lease. Costs of an operating lease will continue to be recognized as a single operating expense on a straight-line basis over the term of the lease. Costs for a financing lease will be disaggregated and recognized as both an operating expense (for the amortization of the right-of-use asset) and interest expense (for interest on the lease liability). This standard became effective beginning

January 1, 2019

and was adopted on our financial statements. The Company recorded the right-of-use asset for the lease in the amount of

$160,073

and the related lease liability. The current liability for the lease is

$47,141

and non-current of

$77,976

as of

September 30, 2019.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment

- The Company 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 firms. The Company’s Blackbox System software for use in China was in development and costs were expensed until the software reached technological feasibility in

April 2017

and capitalized until

May 15, 2017

when the Blackbox System for use in China was marketable.

The Company’s property and equipment is being depreciated on the straight-line basis over an estimated useful life of

three

years.

Earnings Per Share, Policy [Policy Text Block]

Earnings or

(

Loss) Per Share

- Basic earnings per share (or loss per share), is computed by dividing the earnings (loss) for the period by the weighted average number of common stock shares outstanding for the period.  Diluted earnings per share reflects the potential dilution of securities by including other potentially issuable shares of common stock, including shares issuable upon conversion of convertible securities or exercise of outstanding stock options and warrants, in the weighted average number of common shares outstanding for the period.  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, 2019

and

2018,

the potential dilution would be

5,300,031

and

5,000,000

shares of common stock in the event the issued and outstanding shares of Series A Convertible Preferred Stock or other potentially dilutive securities be exercised.

Share-based Payment Arrangement [Policy Text Block]

Share-Based Payment

- Under ASC Topic

718,

Compensation -

Stock Compensation

, all share based payments to employees, including share option grants, are to be recognized in the statement of operations based on their fair values.

No

share-based payments were issued for the

nine

months ended

September 30, 2019

and

2018.

Revenue [Policy Text Block]

Revenue Recognition

-

On

January 1, 2018,

the Company adopted ASU

2014

-

09,

“Revenue from Contracts with Customers” (ASC

606

) and adoption of the new standard had

no

impact on the Company’s statements of operations or balance sheets. Revenue is recognized from the sale of subscriptions for the use of the Blackbox System web application, on a monthly or annual basis. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities. The Company launched its Blackbox System web application and began generating subscription sales revenues during the quarter ended

September 30, 2016.

Revenue related to annual subscriptions is recognized each month with unearned subscriptions reflected as a current liability.

Other Liabilities [Policy Text Block]

Other Liabilities

- The Company is planning the development of a future product, a complimentary platform that will share similar IP protocol with the current Blackbox System on a subscription basis. The future product has

not

yet launched. The Company has received advance payments from a new subscriber group in anticipation of the development of this future product. These amounts are deferred until such time as the platform is launched and the services earned. As of

September 30, 2019,

the Company has received

$180,000

from this future subscriber group.

Research, Development, and Computer Software, Policy [Policy Text Block]

Software Development Costs

- Blackboxstocks is engaged in the development of its proprietary Blackbox System technology, a proprietary algorithm driven system, through a combination of in-house system analysts and outside contractors. Under the guidelines of ASC Topic

985,

“Software”, the cost of the Company’s Blackbox System was expensed during development and the Blackbox System software for use in the United States, reached technical feasibility in

August 2016,

became marketable and was made available to subscribers beginning

September 1, 2016.

The Blackbox System for use in China achieved technological feasibility and became marketable and available to subscribers during the quarter ended

June 30, 2017.

Subsequent to that time, in accordance with ASC Topic

985

these costs were expensed. Costs incurred during this period were capitalized and amortized.

Intangible Assets, Finite-Lived, Policy [Policy Text Block]

Domain Name

- The Company acquired a domain name for its exclusive use in anticipation of its rollout within the next

three

years. The cost was capitalized and due to the uncertainty of our ability to successfully market this name, we elected to amortize the cost over a period of

three

years.

Prepaid Expenses [Policy Text Block]

Prepaid Expenses

- Prepaid expenses are current assets created when the Company makes payments or incurs an obligation for expenses identified for a future period. These amounts are charged to expense as the services are provided.

Advertising Cost [Policy Text Block]

Marketing Costs

- The Company incurs significant marketing expenses related to the development and expansion of its subscription base to potential users. During the

nine

months ended

September 30, 2019

and

2018,

the Company reported

$201,299

and

$107,957

for marketing costs, respectively.

Commitments and Contingencies, Policy [Policy Text Block]

Contingencies

- Certain conditions

may

exist as of the date the financial statements are issued, which

may

result in a loss to the Company but which will only be resolved when

one

or more future events occur or fail to occur. The Company’s management and legal counsel assess such contingent liabilities, and such assessment inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that

may

result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.

If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements.

If the assessment indicates that a potential material loss contingency is

not

probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally

not

disclosed unless they involve guarantees, in which case the guarantee would be disclosed.

XML

Note 7 - Notes Payable, Related Party

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Notes Payable, Related Party [Text Block]

7.

Notes Payable

, Related Party

On

November 9, 2018,

Gust C. Kepler, a Director, President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company advanced

$120,000

to the Company in exchange for a promissory note bearing interest at

12%

per annum for a

ninety

-day period, maturing on

January 28, 2019.

The note remains unpaid as of

September 30

and is in default; however,

no

demand for repayment has been made by the holder.

On

December 6, 2018,

Gust C. Kepler, a Director, President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company advanced

$108,000

to the Company for payment to a

third

party note holder (Note

6

) in exchange for an unsecured promissory note.

XML

Note 9 - Commitments and Contingencies - Future Minimum Rental Payments (Details)	Sep. 30, 2019 USD ($)
2019	$ 14,037
2020	59,004
2021	61,800
2022	$ 46,863

XML

Note 10 - Subsequent Events

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Subsequent Events [Text Block]

10.

Subsequent Events

On

October 3, 2019

a

third

party advanced

$50,000

to the Company in exchange for quasi-factoring financing arrangements to be repaid in daily installments of

$409,

through

May 28, 2020.

The related note discount of

$19,000

will be amortized over the term of the agreement.

XML

Note 6 - Notes Payable

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Debt Disclosure [Text Block]

6.

Notes Payable

On

September 13, 2019

a

third

party advanced

$90,000

to the Company in exchange for quasi-factoring financing arrangements to be repaid in daily installments of

$490,

through

August 18, 2020.

The related note discount of

$27,000

is being amortized over the term of the agreement for a total of

$1,429

in interest expense as of

September 30, 2019.

On

April 2, 2019

an additional

$19,000

was advanced to be repaid in daily installments of

$315.56,

through

August 8, 2019.

The related note discount of

$9,400

was amortized over the term of the agreement for a total of

$9,400

in interest expense as of

September 30, 2019.

On

March 29, 2019

a

third

party advanced

$38,755

to the Company in exchange for quasi-factoring financing arrangements to be repaid in daily installments, currently

$460,

through

September 12, 2019.

The related note discount of

$16,445

was amortized over the term of the agreement for a total of

$16,445

in interest expense as of

September 30, 2019.

On

February 19, 2019

a

third

party advanced

$50,000

to the Company in exchange for a promissory note bearing interest at

12%

per annum for a

ninety

-day period, maturing on

May 20, 2019.

This note and accrued interest of

$2,000

was paid in full on

June 17, 2019

During the year ended

December 31, 2018

third

parties advanced a total of

$121,821

to the Company in exchange for quasi-factoring financing arrangements to be repaid in daily installments, currently

$450,

through

September 18, 2019.

The related note discounts of

$55,190

was amortized over the term of the agreements for a total of

$55,190

in interest expense as of

September 30, 2019.

On

June 26, 2018

the Company entered into a note payable with a

third

party for

$8,309

for the purchase of office telecommunication equipment. The note bears interest at the rate of

18%

per annum for

36

installments and matures on

May 22, 2021.

On

August 8, 2018

a

third

party advanced

$200,000

to the Company in exchange for a secured promissory note, bearing interest at the rate of

12%

per annum with a maturity date of

November 20, 2018.

The note is secured by a Security Agreement providing for a continuing lien and

first

priority security interest in the assets of the Company and by a personal Guaranty Agreement with Gust Kepler, a Director, President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company, and the Company’s controlling stockholder. On

December 6, 2018,

Mr. Kepler made a payment on the note in the amount of

$100,000

plus accrued interest of

$8,000

for an aggregate of

$108,000.

The principal balance of

$100,000

remains outstanding and is in default as of

September 30, 2019,

although the holder has made

no

demand for settlement of the note.

XML

Note 10 - Subsequent Events (Details Textual) - USD ($)		9 Months Ended
	Oct. 03, 2019	Sep. 30, 2019	Sep. 30, 2018
Proceeds from Notes Payable, Total		$ 175,684	$ 248,015
Subsequent Event [Member] | Notes Payable Entered October 3, 2019 [Member]
Proceeds from Notes Payable, Total	$ 50,000
Debt Instrument, Periodic Payment, Total	409
Debt Instrument, Unamortized Discount, Total	$ 19,000

XML

Balance Sheets (Current Period Unaudited) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash	$ 35,101	$ 28,001
Investments, market testing	12
Accounts receivable, net of allowance for doubtful accounts of $68,589 at September 30, 2019 and December 31, 2018, respectively	3,759	3,719
Advances receivable, related parties (Note 5)	29,849
Prepaid expenses	107,646	107,646
Prepaid expenses, related party (Note 5)	36,700	36,700
Total current assets	213,067	176,066
Property and equipment:
Software development, net of amortization of $9,000 and $7,312 at September 30, 2019 and December 31, 2018, respectively		1,688
Right of use lease, net of amortization of $37,869 at September 30, 2019	122,204
Total property and equipment	143,486	33,822
Total Assets	356,553	209,888
Current liabilities:
Accounts payable	559,523	525,136
Accrued expenses		128,000
Accrued interest	23,977	834
Accrued interest, related party	13,000	2,080
Unearned subscriptions	108,377	90,034
Lease liability right of use, current	47,141
Other liabilities	180,000	180,000
Advances payable	11,100
Advances payable, related party (Note 5)	25,000	36,382
Convertible notes payable, net of discount of $180,346 as of September 30, 2019 (Note 8)	369,654
Notes payable, net of note discount of $25,571 and $25,435 at September 30, 2019 and December 31, 2018, respectively (Note 6)	191,139	165,889
Notes payable, related party (Note 7)	228,000	228,000
Total current liabilities	1,756,911	1,356,355
Lease liability right of use, long term	77,976
Commitments and contingencies (Note 9)
Stockholders' Deficit:
Preferred stock
Common stock, $0.001 par value, 100,000,000 shares authorized: 7,883,231 and 7,678,047 issued and outstanding at September 30, 2019 and December 31, 2018, respectively	7,883	7,678
Common stock, subscribed	35,060	144,060
Additional paid in capital	3,476,332	2,543,264
Accumulated deficit	(5,002,609)	(3,846,469)
Total Stockholders' Deficit	(1,478,334)	(1,146,467)
Total Liabilities and Stockholders' Deficit	356,553	209,888
Series A Preferred Stock [Member]
Stockholders' Deficit:
Preferred stock	5,000	5,000
Internet Domain Names [Member]
Property and equipment:
Domain name, net of amortization of $8,118 and $3,821 at September 30, 2019 and December 31, 2018, respectively	9,074	13,371
Machinery and Equipment [Member]
Property and equipment:
Property and equipment	$ 12,208	$ 18,763

XML

Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities
Net loss	$ (1,156,140)	$ (797,419)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization expense	14,128	15,992
Amortization of note discount	346,088	20,420
Financing cost	26,275
Expenses paid by lendor	24,984
Changes in operating assets and liabilities:
Investments, market testing	(12)	(524)
Accounts receivable	(40)	(2,346)
Advances, related party		(1,500)
Prepaid expenses		16,682
Accounts payable	34,387	187,012
Accrued salary		4,122
Accrued interest	23,143	3,533
Accrued interest, related party	10,920
Unearned subscriptions	18,343	69,187
Other liabilities		296,060
Net cash used in operating activities	(657,924)	(188,781)
Cash flows from investing activities
Purchases of property and equipment	(1,587)	(20,684)
Net cash used in investing activities	(1,587)	(20,684)
Cash flows from financing activities
Common stock issued for cash	272,547	22,000
Proceeds from notes payable	175,684	248,015
Proceeds from convertible notes payable	473,725
Repayment of notes payable	(225,214)	(55,505)
Advances from others	11,100
Cash advances from related parties	93,442	122,000
Cash repayments to related parties	(134,673)	(99,071)
Net cash provided by financing activities	666,611	237,439
Net increase in cash	7,100	27,974
Cash - beginning of period	28,001	8,155
Cash - end of period	35,101	36,129
Supplemental disclosure- Non-cash investing and financing activities:
Acquisition of equipment in exchange for note payable		8,309
Discount on notes payable	52,845
Lease, right of use and liability	160,073
Discount on convertible notes payable	473,725
Common stock issued in settlement of accrued expenses	$ 128,000

XML

Note 4 - Stock Options and Warrants - Warrant Activity (Details) - $ / shares	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Warrants, number of shares (in shares)
Warrants, exercise price (in dollars per share)
Issued, number of shares (in shares)	71,795	0
Issued, exercise price (in dollars per share)	$ 1.95
Warrants, number of shares (in shares)	71,795
Warrants, exercise price (in dollars per share)	$ 1.95

XML

Note 1 - Organization (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 01, 2015
Retained Earnings (Accumulated Deficit), Ending Balance	$ (5,002,609)		$ (5,002,609)		$ (3,846,469)
Net Income (Loss) Attributable to Parent, Total	$ (507,859)	$ (350,901)	$ (1,156,140)	$ (797,419)
Blackboxstocks [Member]
Ownership Percentage By Stockholders						88.64%

XML

Note 8 - Convertible Notes Payable (Details Textual) - USD ($)			9 Months Ended
	Jul. 17, 2019	May 21, 2019	Sep. 30, 2019	Sep. 30, 2018
Proceeds from Convertible Debt			$ 473,725
Convertible Notes Payable [Member]
Debt Instrument, Face Amount	$ 165,000	$ 550,000
Convertible Notes Payable, Total	$ 150,000	$ 500,000
Debt Instrument, Discount Rate	10.00%	10.00%
Debt Instrument, Interest Rate, Stated Percentage	8.00%	8.00%
Debt Instrument, Term	180 days	180 days
Proceeds from Convertible Debt	$ 150,000	$ 350,000
Debt Instrument, Convertible, Conversion Price	$ 1.95	$ 1.95
Debt Instrument, Convertible, Percentage of Lowest Bid Price During Prior 15 Consecutive Trading Days	65.00%	65.00%

XML

Note 4 - Stock Options and Warrants (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

	Number of Shares		Exercise Price
Warrants as of December 31, 2018		-		-
Issued during 2019		71,795		$1.95
Warrants as of September 30, 2019		71,795		$1.95

XML

Note 8 - Convertible Notes Payable

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Convertible Notes Payable [Text Block]

8.

Convertible Notes Payable

On

May 21, 2019,

the Company issued an

8%

Fixed Convertible Promissory Note payable to a

third

party for a total face value up to

$550,000,

which included an original issue discount of

10%

on the investment amount of up to

$500,000.

The note specifies that the note holder shall retain an original issue discount of

10%

of any consideration, bears interest of

8%,

and matures

180

days from the effective date. If the Company prepays the note within

90

days, the Company must pay a cash redemption premium of

110%;

if such prepayment is made between the

91st

day and the

180th

day, then such redemption premium is

115%.

The note holder paid the

first

consideration of

$350,000

was allowed

thirty

days to pay additional consideration, however

no

further consideration was remitted within the

thirty

days. Until maturity, the note holder

may

convert all or a portion of the outstanding principal into shares of Common Stock of the Company at a fixed conversion price equal to

$1.95

per share. If the note is

not

retired on or before the maturity date, the note holder

may

convert a portion or all the outstanding principle into shares of the Company’s common stock at a variable conversion price which equals the lower of the fixed conversion price or

65%

of the lowest closing bid price during the

15

consecutive trading days prior to the date of the note holder’s election to convert.

On

July 17, 2019,

the Company issued an

8%

Fixed Convertible Promissory Note payable to a

third

party for a total face value of

$165,000,

which included an original issue discount of

10%

on the investment amount of

$150,000

.

The note specifies that the note holder shall retain an original issue discount of

10%

of any consideration, bears interest of

8%,

and matures

180

days from the effective date. If the Company prepays the note within

90

days, the Company must pay a cash redemption premium of

110%;

if such prepayment is made between the

91st

day and the

180th

day, then such redemption premium is

115%.

Until maturity, the note holder

may

convert all or a portion of the outstanding principal into shares of Common Stock of the Company at a fixed conversion price equal to

$1.95

per share. If the note is

not

retired on or before the maturity date, the note holder

may

convert a portion or all the outstanding principle into shares of the Company’s common stock at a variable conversion price which equals the lower of the fixed conversion price or

65%

of the lowest closing bid price during the

15

consecutive trading days prior to the date of the note holder’s election to convert.

XML

Note 4 - Stock Options and Warrants

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

4.

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. The fair value cost is computed utilizing the Black-Scholes model and assuming volatility based on U.S. Treasury yield rates for a similar period.

When the options or warrants are exercised, the receipt of consideration is an increase in stockholders’ equity.

Concurrently with certain of the securities purchase agreements entered into as described in Note

3

above, warrants to purchase the Company’s Common Stock were issued to the subscribers. Each warrant is exercisable for a period of

five

years from the date of the securities purchase agreement at an exercise price of

$1.95

per share. The fair value cost at the date of issuance of the warrants was

$502,398.

There was

no

warrant activity during the

nine

months ended

September 30, 2018

and as of

September 30, 2019,

there are

71,795

warrants outstanding.

	Number of Shares		Exercise Price
Warrants as of December 31, 2018		-		-
Issued during 2019		71,795		$1.95
Warrants as of September 30, 2019		71,795		$1.95

XML

Note 2 - Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Significant Accounting Policies [Text Block]

2.

Summary of Significant Accounting Policies

The accompanying interim unaudited financial statements and footnotes of Blackboxstocks Inc. have been prepared in accordance with 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 the rules and regulation so fthe SEC 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. 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, 2019.

Basis

of

Presentation

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

Use of Estimates

– The Company’s financial statement preparation requires that management make estimates and assumptions which affect the reporting of assets and liabilities and the related disclosure of contingent assets and liabilities in order to report these financial statements in conformity with GAAP.  Actual results could differ from those estimates.

Cash

- Cash includes all highly liquid investments that are readily convertible to known amounts of cash and have original maturities at the date of purchase of

three

months or less.

Fair Value of Financial Instruments

- The Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic

820,

Fair Value Measurement

, defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are

not

available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments

may

be made to ensure that financial instruments are recorded at fair value. These adjustments

may

include amounts to reflect counterparty credit quality and the customer’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time.

Recently Issued Accounting Pronouncements

- During the

nine

months ended

September 30, 2019

and

2018,

there were several new accounting pronouncements issued by the 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.

In

February 2016,

the FASB issued ASU

2016

-

02,

Leases

. This is a comprehensive new leases standard that amends various aspects of existing guidance for leases and requires additional disclosures about leasing arrangements. It requires all leases that have a term in excess of

12

months be recognized on the balance sheet with the liability for lease payments and the corresponding right-of-use asset value based on the present value of future aggregate payments. Recognition of the costs of these leases on the income statement will be dependent upon their classification as either an operating or a financing lease. Costs of an operating lease will continue to be recognized as a single operating expense on a straight-line basis over the term of the lease. Costs for a financing lease will be disaggregated and recognized as both an operating expense (for the amortization of the right-of-use asset) and interest expense (for interest on the lease liability). This standard became effective beginning

January 1, 2019

and was adopted on our financial statements. The Company recorded the right-of-use asset for the lease in the amount of

$160,073

and the related lease liability. The current liability for the lease is

$47,141

and non-current of

$77,976

as of

September 30, 2019.

Property and Equipment

- The Company 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 firms. The Company’s Blackbox System software for use in China was in development and costs were expensed until the software reached technological feasibility in

April 2017

and capitalized until

May 15, 2017

when the Blackbox System for use in China was marketable.

The Company’s property and equipment is being depreciated on the straight-line basis over an estimated useful life of

three

years.

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, 2019

and

2018,

the potential dilution would be

5,300,031

and

5,000,000

shares of common stock in the event the issued and outstanding shares of Series A Convertible Preferred Stock or other potentially dilutive securities be exercised.

Share-Based Payment

- Under ASC Topic

718,

Compensation -

Stock Compensation

, all share based payments to employees, including share option grants, are to be recognized in the statement of operations based on their fair values.

No

share-based payments were issued for the

nine

months ended

September 30, 2019

and

2018.

Revenue Recognition

-

On

January 1, 2018,

the Company adopted ASU

2014

-

09,

“Revenue from Contracts with Customers” (ASC

606

) and adoption of the new standard had

no

impact on the Company’s statements of operations or balance sheets. Revenue is recognized from the sale of subscriptions for the use of the Blackbox System web application, on a monthly or annual basis. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities. The Company launched its Blackbox System web application and began generating subscription sales revenues during the quarter ended

September 30, 2016.

Revenue related to annual subscriptions is recognized each month with unearned subscriptions reflected as a current liability.

Other Liabilities

- The Company is planning the development of a future product, a complimentary platform that will share similar IP protocol with the current Blackbox System on a subscription basis. The future product has

not

yet launched. The Company has received advance payments from a new subscriber group in anticipation of the development of this future product. These amounts are deferred until such time as the platform is launched and the services earned. As of

September 30, 2019,

the Company has received

$180,000

from this future subscriber group.

Software Development Costs

- Blackboxstocks is engaged in the development of its proprietary Blackbox System technology, a proprietary algorithm driven system, through a combination of in-house system analysts and outside contractors. Under the guidelines of ASC Topic

985,

“Software”, the cost of the Company’s Blackbox System was expensed during development and the Blackbox System software for use in the United States, reached technical feasibility in

August 2016,

became marketable and was made available to subscribers beginning

September 1, 2016.

The Blackbox System for use in China achieved technological feasibility and became marketable and available to subscribers during the quarter ended

June 30, 2017.

Subsequent to that time, in accordance with ASC Topic

985

these costs were expensed. Costs incurred during this period were capitalized and amortized.

Domain Name

- The Company acquired a domain name for its exclusive use in anticipation of its rollout within the next

three

years. The cost was capitalized and due to the uncertainty of our ability to successfully market this name, we elected to amortize the cost over a period of

three

years.

Prepaid Expenses

- Prepaid expenses are current assets created when the Company makes payments or incurs an obligation for expenses identified for a future period. These amounts are charged to expense as the services are provided.

Marketing Costs

- The Company incurs significant marketing expenses related to the development and expansion of its subscription base to potential users. During the

nine

months ended

September 30, 2019

and

2018,

the Company reported

$201,299

and

$107,957

for marketing costs, respectively.

Contingencies

- Certain conditions

may

exist as of the date the financial statements are issued, which

may

result in a loss to the Company but which will only be resolved when

one

or more future events occur or fail to occur. The Company’s management and legal counsel assess such contingent liabilities, and such assessment inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that

may

result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.

If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements.

If the assessment indicates that a potential material loss contingency is

not

probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally

not

disclosed unless they involve guarantees, in which case the guarantee would be disclosed.

XML

Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenue:
Revenues	$ 296,332	$ 190,179	$ 776,489	$ 480,849
Cost of operations	195,344	156,366	525,670	474,379
Gross margin	100,988	33,813	250,819	6,470
Expenses:
Software development costs	27,140	32,234	102,489	47,034
General and administrative	317,134	332,986	902,885	715,289
Depreciation and amortization	4,196	6,482	14,128	15,992
Total operating expenses	348,470	371,702	1,019,502	778,315
Operating loss	(247,482)	(337,889)	(768,683)	(771,845)
Interest expense	37,373	13,033	94,078	25,574
Other expense		(21)
Amortization of debt discount	223,004		293,379
Loss before income taxes	(507,859)	(350,901)	(1,156,140)	(797,419)
Income taxes
Net loss	$ (507,859)	$ (350,901)	$ (1,156,140)	$ (797,419)
Weighted average number of common shares outstanding - basic (in shares)	7,788,008	7,667,942	7,701,581	7,667,096
Net loss per share - basic (in dollars per share)	$ (0.07)	$ (0.05)	$ (0.15)	$ (0.10)
Subscription and Circulation [Member]
Revenue:
Revenues	$ 289,632	$ 188,179	$ 755,244	$ 478,849
Product and Service, Other [Member]
Revenue:
Revenues	$ 6,700	$ 2,000	$ 21,245	$ 2,000

XML

Note 6 - Notes Payable (Details Textual)								1 Months Ended	9 Months Ended		12 Months Ended
	Sep. 13, 2019 USD ($)	Jun. 17, 2019 USD ($)	Apr. 02, 2019 USD ($)	Feb. 19, 2019 USD ($)	Dec. 06, 2018 USD ($)	Aug. 08, 2018 USD ($)	Jun. 26, 2018 USD ($)	Mar. 29, 2019 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)
Proceeds from Notes Payable, Total									$ 175,684	$ 248,015
Repayments of Notes Payable									225,214	$ 55,505
Note Payable to Purchase Equipment [Member]
Proceeds from Notes Payable, Total							$ 8,309
Debt Instrument, Interest Rate, Stated Percentage							18.00%
Debt Instrument, Number of Installments							36
Notes Payable Entered September 13, 2019 [Member]
Proceeds from Notes Payable, Total	$ 90,000
Debt Instrument, Periodic Payment, Total	490
Debt Instrument, Unamortized Discount, Total	$ 27,000
Interest Expense, Debt, Total									1,429
Notes Payable Entered April 2, 2019 [Member]
Proceeds from Notes Payable, Total			$ 19,000
Debt Instrument, Periodic Payment, Total			315.56
Debt Instrument, Unamortized Discount, Total			$ 9,400
Interest Expense, Debt, Total									9,400
Notes Payable Entered March 29, 2019 [Member]
Proceeds from Notes Payable, Total								$ 38,755
Debt Instrument, Periodic Payment, Total								460
Debt Instrument, Unamortized Discount, Total								$ 16,445
Interest Expense, Debt, Total									16,445
Promissory Note Payable [Member]
Proceeds from Notes Payable, Total				$ 50,000
Interest Expense, Debt, Total		$ 2,000
Debt Instrument, Interest Rate, Stated Percentage				12.00%
Notes Payable During Fiscal 2018 [Member]
Proceeds from Notes Payable, Total											$ 121,821
Debt Instrument, Periodic Payment, Total											450
Debt Instrument, Unamortized Discount, Total											$ 55,190
Interest Expense, Debt, Total									55,190
Secured Promissory Note Payable [Member]
Proceeds from Notes Payable, Total						$ 200,000
Interest Expense, Debt, Total					$ 8,000
Debt Instrument, Interest Rate, Stated Percentage						12.00%
Repayments of Notes Payable					100,000
Repayment of Notes Payable Including Interest					$ 108,000
Debt Default, Short-term Debt, Amount									$ 100,000

XML

Note 3 - Stockholders' Deficit (Details Textual)							9 Months Ended		12 Months Ended
	Aug. 29, 2019 USD ($) $ / shares shares	Jul. 15, 2019	Jun. 04, 2019 USD ($) $ / shares shares	May 22, 2019 USD ($) $ / shares shares	May 07, 2019 USD ($) $ / shares shares	Apr. 10, 2019 USD ($) $ / shares shares	Sep. 30, 2019 USD ($) $ / shares shares	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($) $ / shares shares
Preferred Stock, Shares Authorized							5,000,000		5,000,000
Preferred Stock, Par or Stated Value Per Share | $ / shares							$ 0.001		$ 0.001
Common Stock, Shares Authorized							100,000,000		100,000,000
Common Stock, Par or Stated Value Per Share | $ / shares							$ 0.001		$ 0.001
Stock Issued During Period, Shares, New Issues	12,821		51,282	12,821	25,641	51,282
Shares Issued, Price Per Share | $ / shares					$ 1.95
Stock Issued During Period, Value, New Issues | $							$ 272,547	$ 22,000
Stock Issued During Period, Shares, Subscriptions							3,334		3,333
Stock Issued During Period, Value, Subscriptions | $							$ 10,000		$ 6,500
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares							$ 1.95
Proceeds from Issuance or Sale of Equity, Total | $			$ 100,000	$ 25,000	$ 50,000	$ 100,000
Warrants in Connection with Common Stock Sold [Member]
Warrants and Rights Outstanding, Term	5 years		5 years	5 years		5 years	5 years
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	6,411		25,641	6,410		33,333
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares	$ 1.95		$ 1.95	$ 1.95		$ 1.95	$ 1.95
Proceeds from Issuance or Sale of Equity, Total | $	$ 25,000
Issuance of Common Stock 1 [Member]
Stock Issued During Period, Shares, New Issues							30,833
Shares Issued, Price Per Share | $ / shares							$ 3
Stock Issued During Period, Value, New Issues | $							$ 92,500
Reverse Stock Split [Member]
Stockholders' Equity Note, Stock Split, Conversion Ratio		3
Total Preferred Stock [Member]
Preferred Stock, Shares Authorized							10,000,000
Series A Preferred Stock [Member]
Preferred Stock, Shares Authorized							5,000,000		5,000,000
Preferred Stock, Par or Stated Value Per Share | $ / shares							$ 0.001		$ 0.001
Convertible Preferred Stock, Shares Issued upon Conversion							1
Preferred Stock, Number of Votes Per Share							100

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Nov. 12, 2019
Document Information [Line Items]
Entity Registrant Name	BLACKBOXSTOCKS INC.
Entity Central Index Key	0001567900
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding (in shares)		7,883,231
Entity Shell Company	false
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Statement of Stockholders' Deficit (Unaudited) - USD ($)	Preferred Stock [Member] Series A Preferred Stock [Member]	Preferred Stock [Member]	Common Stock [Member]	Common Stock, Subscribed [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Dec. 31, 2017	5,000,000		7,667,047
Balance at Dec. 31, 2017	$ 5,000		$ 7,667		$ 2,510,275	$ (2,694,587)	$ (171,645)
Issuance of shares (in shares)			7,333
Issuance of shares			$ 7		21,993		22,000
Net loss						(797,419)	(797,419)
Balance (in shares) at Sep. 30, 2018	5,000,000		7,674,380
Balance at Sep. 30, 2018	$ 5,000		$ 7,674		2,532,268	(3,492,006)	(947,064)
Balance (in shares) at Dec. 31, 2018	5,000,000		7,678,047
Balance at Dec. 31, 2018	$ 5,000		$ 7,678	144,060	2,543,264	(3,846,469)	(1,146,467)
Issuance of shares (in shares)			191,354
Issuance of shares			$ 191	(109,000)	381,356		272,547
Net loss						(1,156,140)	(1,156,140)
Issuance of shares in settlement of accrued expenses (in shares)			13,830
Issuance of shares in settlement of accrued expenses			$ 14		127,986		128,000
Imputed discount on convertible notes payable (Note 8)					423,726		423,726
Balance (in shares) at Sep. 30, 2019	5,000,000		7,883,231
Balance at Sep. 30, 2019	$ 5,000		$ 7,883	$ 35,060	$ 3,476,332	$ (5,002,609)	$ (1,478,334)

XML

Note 3 - Stockholders' Deficit

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

3.

   Stockholders’ Deficit

The Company has authorized

10,000,000

shares of preferred stock at

$0.001

par value,

5,000,000

of which are designated as “Series A Convertible Preferred Stock” at

$0.001

par value and

100,000,000

authorized shares of common stock at

$0.001

par value (“Common Stock”).

Shares of Series A Convertible Preferred Stock 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.

The Company announced and approved a reverse stock split effective

July 15, 2019

at a ratio of

1

for

3,

whereby every

3

shares of common stock issued and outstanding were automatically reclassified and combined into

one

share of common stock (“Reverse Stock Split”). The Reverse Stock Split has been reflected retroactively in these financial statements for all periods presented.

During the

nine

months ended

September 30, 2019,

the Company issued

30,833

shares of Common Stock at a cash price of

$3.00

per share for a total of

$92,500

and

3,333

shares of Common Stock for an aggregate cash price of

$6,500

for subscriptions received during the year ended

December 31, 2018.

During the

nine

months ended

September 30, 2019

the Company issued

3,334

shares of Common Stock for an aggregate cash price of

$10,000

for subscriptions received during the year ended

December 31, 2018.

On

April 10, 2019

the Company sold

51,282

shares of Common Stock and a Warrant, exercisable for a period of

5

years, to purchase

33,333

shares of Common Stock at an exercise price of

$1.95

per share, to a

third

party for aggregate consideration of

$100,000.

On or about

May 7, 2019

the Company sold

25,641

shares of Common Stock to a

third

party at a price of

$1.95

per share, for aggregate consideration of

$50,000.

On or about

May 22, 2019

the Company sold

12,821

shares of Common Stock and a Warrant, exercisable for a period of

5

years, to purchase

6,410

shares of Common Stock at an exercise price of

$1.95

per share to a

third

party for aggregate consideration of

$25,000.

On or about

June 4, 2019

the Company sold

51,282

shares of Common Stock and a Warrant, exercisable for a period of

5

years, to purchase

25,641

shares of Common Stock at an exercise price of

$1.95

per share, to a

third

party for aggregate consideration of

$100,000.

On

August 29, 2019

the Company sold

12,821

shares of Common Stock and a Warrant, exercisable for a period of

5

years, to purchase

6,411

shares of Common Stock at an exercise price of

$1.95

per share, to a

third

party for aggregate consideration of

$25,000.

XML

Note 7 - Notes Payable, Related Party (Details Textual) - USD ($)			9 Months Ended
	Dec. 06, 2018	Nov. 09, 2018	Sep. 30, 2019	Sep. 30, 2018
Proceeds from Related Party Debt			$ 93,442	$ 122,000
Director, President, CEO,CFO, and Secretary [Member]
Proceeds from Related Party Debt			$ 68,442
Notes Payable, Other Payables [Member] | Director, President, CEO,CFO, and Secretary [Member]
Proceeds from Related Party Debt	$ 108,000	$ 120,000
Debt Instrument, Interest Rate, Stated Percentage		12.00%

XML

Note 4 - Stock Options and Warrants (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Aug. 29, 2019	Jun. 04, 2019	May 22, 2019	Apr. 10, 2019	Dec. 31, 2018
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 1.95
Class of Warrant or Right, Issued in Period	71,795	0
Class of Warrant or Right, Outstanding	71,795
Warrants in Connection with Common Stock Sold [Member]
Warrants and Rights Outstanding, Term	5 years		5 years	5 years	5 years	5 years
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 1.95		$ 1.95	$ 1.95	$ 1.95	$ 1.95
Warrants and Rights Outstanding	$ 502,398

XML

Note 9 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

9.

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. On

August 28, 2017,

the Company acquired and was assigned all right, title and interest in the lease from

G2.

On

September 19, 2017

the Company amended the lease to expand its space by approximately

336

square feet for a total of

1,838

square feet and extended the expiration date to

September 30, 2022.

On

January 1, 2019

the Company adopted ASC

842

requiring this lease to be recorded as an asset and corresponding liability on its balance sheet. The Company records rent expense associated with this lease on the straight-line basis in conjunction with the terms of the underlying lease. During the

nine

months ended

September 30, 2019

and

2018

we incurred

$39,732

and

$45,299,

respectively, in office rental expense. Future minimum rental payments under the extended lease for years ending

December 31,

are:

2019	$	14,037
2020		59,004
2021		61,800
2022		46,863

On

June 18, 2018

the Company entered into a letter agreement with IC Ventures, Inc. (“ICV”), pursuant to which the Company retained ICV to provide strategic advisory services for marketing and financial matters relating to investment and acquisition issues which services commenced

July 1, 2018.

The agreement provided for a

twenty

-month (

24

) month term and that ICV would be compensated monthly in Company common stock valued

at$20,000

with such compensation to be increased by

$15,000

in cash for a

twelve

-month period during the term, payable in cash beginning on the earlier of (i) the election by the Company or (ii) the

sixth

full month following the execution of the agreement. The agreement also provided that ICV would be issued

920,000

shares of the Company’s common stock if listing on NASDAQ is achieved during the term of the agreement and ICV shall be paid a closing fee of

1.5%

of gross proceeds or a minimum of

$500,000

if the Company should be acquired during the term of the agreement or within

12

months of the termination of the agreement. On

December 18, 2018

the Company terminated the agreement and during the quarter ended

September 30, 2019

issued

13,830

shares of common stock in settlement of the

$128,000

due to ICV.

The Company engaged software design consulting services from a vendor for its Blackbox System which the Company found did

not

meet its standards and entered into negotiations to dispute the services rendered. The entity providing these services sought satisfaction through a complaint with the State of California for the disputed amount and a judgement in favor of the plaintiff/vendor was granted in the amount of

$29,523.

  This amount represents

$24,920

for the disputed services, interest of

$2,200

and legal costs of

$2,403.

  The Company is optimistic that a negotiated settlement of the judgement

may

be reached.  The aggregate of the judgement of

$29,523

is included in accounts payable as of

September 30, 2019.

On

March 6, 2019

the Company entered into a letter agreement with Boustead Securities (“Boustead”), pursuant to which the Company retained Boustead to provide exclusive financial advisory services relating to corporate development, investment and acquisition issues. The agreement provides for an engagement fee of

$20,000

due upon execution of the agreement;

$5,000

upon the closing of any pre-initial public offering (“IPO”) financing and

$25,000

upon the closing of the IPO. The agreement also provides for cash success fees should any business combination transactions or debt financing be achieved. Additionally, Boustead will earn warrants for purchase of the Company’s common stock for each debt financing transactions and success fees for any equity financing or initial public offering.

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

Note 5 - Related Party Transactions

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

5.

  Related Party Transactions

During the

nine

months ended

September 30, 2019,

Gust C. Kepler, a Director, President, Chief Executive Officer, Chief Financial Officer and Secretary of the Company advanced

$68,442

to the Company and he was repaid

$133,173.

The balance remaining of

$28,349

is owed to the Company, is unsecured and bears

no

interest.

During the

nine

months ended

September 30, 2019

the Company advanced

$1,500

to its VP/Director of Operations and the balance remains outstanding, is unsecured and bears

no

interest.

During the

nine

months ended

September 30, 2019

and

2018,

the Company engaged the services of Karma Black Box LLC (“Karma”), whose

two

stockholders became Company stockholders as a result of the Exchange Agreement with Tiger Trade and its stockholders (Note

1

), for application development services of the Company’s Blackbox System technology. Karma began operating as EDM Operators (“EDM”) in the last quarter of

2018.

During the

nine

months ended

September 30, 2019

and

2018,

Karma/EDM was paid

$13,500

and

$36,000

for services, respectively.

During the

nine

months ended

September 30, 2019,

one

of the stockholders of EDM advanced

$25,000

to the Company. The balance of

$25,000

remains outstanding as of

September 30, 2019

is unsecured and bears

no

interest.

G2

International, Inc. (

“G2”

), which does business as IPA Tech Group (“IPA”), 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. As of

September 30, 2019

the Company has a prepaid balance of

$36,700

for public relations and marketing services with

G2/IPA.

These funds are reserved in anticipation of a future campaign to move the Company’s stock to listing on a national exchange.

XML

Note 9 - Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

2019	$	14,037
2020		59,004
2021		61,800
2022		46,863