Blackboxstocks boosts debenture offering to $2.85 million

Blackboxstocks Inc. (NASDAQ:BLBX), a micro-cap technology company with a market value of $10.41 million and annual revenue of $2.76 million, has amended its securities purchase agreement to increase the principal amount of its debenture offering, according to a recent SEC filing. The Dallas-based company, which operates on the NASDAQ Capital Market under the ticker symbol BLBX, disclosed the amendment in a Form 8-K filed with the U.S. Securities and Exchange Commission on Tuesday. According to InvestingPro data, the company has faced profitability challenges, reporting negative EBITDA of $3.45 million in the last twelve months.

The amendment, dated January 27, 2025, revises an original agreement from January 17, 2025, with Five Narrow Lane LP, who acts as both the purchaser and collateral agent. The new terms raise the aggregate principal and subscription amount of the initial and additional debentures to $550,000 and $2,300,000, respectively, totaling $2.85 million. This adjustment reflects changes to various provisions within the agreement, including definitions and conditions for closing. InvestingPro analysis shows the company’s current ratio of 0.36 indicates potential liquidity challenges, with short-term obligations exceeding liquid assets.

The initial debenture has been amended and restated, now prohibiting prepayments without holder consent and barring certain financial arrangements like factoring agreements. This amended debenture will mature on the earlier of the trigger date or March 15, 2025. Palladium Capital Group LLC served as the placement agent for Blackboxstocks in connection with the amendment.

The securities offered are debentures, which are a type of debt instrument that the company is obligated to repay. The issuance of these debentures is pursuant to an exemption from registration requirements provided by Section 4(a)(2) of the Securities Act of 1933 and Rule 506 of Regulation D, meaning they have not been registered with the SEC and are subject to restrictions on resale.

This move to increase the debenture offering suggests that Blackboxstocks is seeking to raise capital, although the specific intended use of the proceeds was not disclosed in the filing. The information for this report is based on statements from a press release. For deeper insights into BLBX’s financial health and more exclusive metrics, investors can access additional analysis through InvestingPro, which offers comprehensive financial health scores and over 30 additional financial tips.

In other recent news, Blackboxstocks Inc. has been making strategic moves towards a potential merger. The company has secured financing of up to $2 million, a significant step that has been well-received by investors. The financing involves the purchase of senior debentures totaling $250,000, with provisions to convert into additional debentures of up to $2 million under certain conditions.

In addition, the company has recently switched its certifying accountant, moving from Turner, Stone & Company, L.L.P. to Victor Mokuolo CPA PLLC. This transition was approved by the company’s audit committee and took place without any disagreements regarding accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

However, Blackboxstocks has also been facing some challenges. The company received notices from Nasdaq regarding non-compliance with certain listing requirements, including the standards for holding annual stockholder meetings and board independence. In response, Blackboxstocks has scheduled its 2024 annual meeting for February and is actively exploring options to regain compliance within the provided timeframe. These are the recent developments for Blackboxstocks as it navigates towards a possible merger and compliance resolution.

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