Blackboxstocks Provides Stockholder Update on Acquisition of Rare Earth Company

Rhea-AI Summary

Blackboxstocks (NASDAQ: BLBX), a fintech company, provided a comprehensive update on its pending acquisition of REalloys, Inc., a U.S.-based rare earth company. The merger, expected to close in late August 2025, will transform BLBX into a mine-to-magnet metals enterprise while maintaining its fintech operations as a subsidiary.

Key highlights include REalloys' Hoidas Lake Project in Saskatchewan with 2,153,000 metric tonnes of rare earth oxides, the acquisition of PMT Critical Metals facility in Ohio, and a partnership with the Saskatchewan Research Council. The combined entity aims to reach 1,000 metric tonnes annual production capacity by 2028. BLBX stockholders will own approximately 7.3% of the merged company and receive Contingent Value Rights (CVRs) for potential proceeds from any fintech operations sale within 24 months post-merger.

Positive

• Strategic acquisition provides entry into lucrative rare earth sector with domestic supply capabilities
• Hoidas Lake Project contains significant measured resources of 2.15M metric tonnes at 1.906% grade
• Production capacity targeted to reach 1,000 metric tonnes annually by 2028
• Existing contracts with key government clients including U.S. Defense Logistics Agency
• Shareholders receive CVRs for potential proceeds from fintech operations sale

Negative

• Significant dilution for current shareholders with only 7.3% ownership in combined entity
• Complex merger structure with regulatory and shareholder approval pending
• Substantial business model shift from fintech to rare earth mining creates operational risks
• Success dependent on regulatory approvals and NASDAQ listing requirements

Insights

Rare Earth Industry Specialist

Blackboxstocks' acquisition of REalloys transforms it from fintech to rare earth player, giving shareholders entry into critical minerals sector with minimal dilution.

Blackboxstocks is executing a significant business pivot by acquiring REalloys, a vertically integrated rare earth company with strategic assets in the critical minerals space. The acquisition represents a complete transformation from a fintech platform to a "mine-to-magnet metals" rare earth company positioned to serve protected U.S. markets.

The deal's structure is particularly notable. REalloys brings substantial assets including the Hoidas Lake Rare Earth Deposit in Saskatchewan, containing 2,153,000 metric tonnes of Total Rare Earth Oxides at a 1.906% grade. This resource is rich in the most commercially valuable rare earth elements: neodymium, praseodymium, dysprosium and terbium – critical components for permanent magnets used in defense applications, electric vehicles, and renewable energy systems.

REalloys has systematically built a vertically integrated operation by acquiring PMT Critical Metals in Ohio, which brings production capabilities and existing contracts with the Defense Logistics Agency and AMES National Laboratory. Their partnership with the Saskatchewan Research Council further strengthens their midstream processing capabilities.

For Blackboxstocks shareholders, this transaction offers 7.3% ownership in the merged entity plus Contingent Value Rights tied to any sale of the legacy fintech business within 24 months. The transaction preserves the original Blackboxstocks business through a subsidiary while giving shareholders exposure to the strategic minerals sector that's receiving significant government support under recent executive directives.

The projected production capacity increases to 500 metric tonnes by 2026 and 1,000 metric tonnes by 2028 signal ambitious growth plans. REalloys' assets and capabilities position it to potentially capture significant market share in North American rare earth production, a sector dominated by Chinese companies but increasingly prioritized for domestic development.

Corporate Finance Analyst

This merger fundamentally changes Blackboxstocks' identity and investment thesis. The transaction structure reveals several key financial considerations for current shareholders:

1. Ownership Dilution: Existing Blackboxstocks shareholders will retain only 7.3% of the combined entity. While this represents significant dilution, it must be evaluated against the value of REalloys' assets - particularly the Hoidas Lake deposit and the operational production facility in Ohio.

2. Contingent Value Rights: The CVRs attached to the legacy fintech business create a potential additional return mechanism for current shareholders. This structure effectively separates the value of the original business from the new rare earth focus, creating two distinct value streams.

3. Access to Capital: The merger provides REalloys access to public markets funding for its ambitious expansion plans, including increasing production capacity to 1,000 metric tonnes by 2028. The ability to use stock as acquisition currency could accelerate growth.

4. Valuation Catalyst: The transaction moves Blackboxstocks from the crowded fintech sector to the strategic minerals space where companies often command premium valuations due to national security implications and supply constraints. The critical minerals focus aligns with current administration priorities for domestic supply chain security.

5. Timeline Clarity: With a Form S-4 filed and anticipated August closing, the transaction path is well-defined, reducing execution uncertainty. The primary remaining hurdles are SEC effectiveness, NASDAQ approval, and shareholder vote.

This transaction represents a calculated bet that the rare earth sector offers greater growth potential than fintech for Blackboxstocks. For shareholders, while ownership percentage decreases substantially, the potential market opportunity in critical minerals potentially justifies this dilution given global supply chain concerns and government backing for domestic production.

Blackboxstocks, Inc. Stockholder Update

DALLAS, July 18, 2025 (GLOBE NEWSWIRE) -- Blackboxstocks Inc. (NASDAQ: BLBX) (“Blackbox”), a financial technology and social media hybrid platform, today released a stockholder update from CEO Gust Kepler:

As we kick off the first month of Q3 2025, I'm excited to update our stakeholders on our developments, especially with respect to our foray into the rare earth sector with our pending acquisition of REalloys, Inc. (“REalloys”). REalloys is a U.S. based, integrated rare earth company poised to capitalize on its ability to provide high-performance magnet materials for U.S. Protected Markets. While Blackbox remains a fully operational fintech enterprise, we have taken the initiative to pursue this acquisition which we believe will greatly enhance value for our stockholders, while allowing us to continue operating the legacy Blackbox fintech operations within our wholly owned subsidiary, Blackbox.io Inc.

The following recaps the timeline and provides an update on our proposed merger transaction:

On March 10, 2025, we executed a definitive merger agreement to acquire REalloys, a company specializing in the production of high-performance magnet materials utilizing rare earth elements. We pursued this acquisition because we believe REalloys will become a leading force in North America’s rare earth and high-performance magnet industries. Structured as a true "mine-to-magnet metals" company, we believe REalloys is uniquely positioned to strengthen the critical supply chain that supports U.S. national defense, advanced technologies and infrastructure.

REalloys was founded in conjunction the acquisition of its Hoidas Lake Rare Earth Deposit in Saskatchewan, Canada, one of the world's richest and highest-grade sources of neodymium, praseodymium, dysprosium and terbium. The Hoidas Lake Project spans 14 contiguous mineral claims across 12,522 hectares (30,942 acres) in this mining-friendly jurisdiction. A December 6, 2024, S-K 1300 Technical Report by William J. Lewis, P. Geo., of Micon International Limited highlights a Measured and Indicated Mineral Resource totaling 2,153,000 metric tonnes of Total Rare Earth Oxides at an average grade of 1.906%, underscoring the project’s potential as a key domestic source of both light and heavy rare earth elements.

On April 9, 2025, we announced that REalloys successfully acquired 100% of PMT Critical Metals Inc. in a share exchange representing approximately 14% of their outstanding common stock. The transaction, which closed on March 31, 2025, resulted in the acquisition of rare earth magnet metal production equipment, intellectual property, know-how, research & development, and existing contracts and clients.

PMT Critical Metals Inc.is located in Euclid, Ohio. The facility produces rare earth metals and magnet materials for key clients such as the U.S. Defense Logistics Agency (DLA), the U.S. Department of Energy’s AMES National Laboratory (AMES), and other major players in the rare earth industry. With specialized capabilities, the facility can metalize rare earth oxides into magnet metals. We are confident that this facility will play a vital role in supporting the recent executive directive on essential minerals issued by the Trump Administration, ensuring a reliable North American supply of high-performance magnets critical for both modern industry and national defense.

On May 19, 2025, we announced that REalloys signed a joint Memorandum of Understanding with the Saskatchewan Research Council (“SRC”) to begin working together to advance their initiative of commercial production of high-performance rare earth magnet materials. The SRC’s Rare Earth Separation Processing Facility in Saskatoon, Saskatchewan, Canada announced commercial production of rare earth oxides and metals in September 2024, positioning Canada as a leader in ethical, sustainable, rare earth element separation and midstream processing. By combining the SRC’s mid-stream separation capabilities in heavy rare earth dysprosium-terbium (“DyTb”) and light rare earth neodymium-praseodymium (“NdPr”) metals, high performance magnet materials can now be made in North America, at the Euclid, Ohio facility. Combined production capacity is targeted to expand to 500 metric tonnes (“mt”) per year of magnet materials in 2026, and 1,000 mt by 2028.

On July 2, 2025, we filed an amended registration statement on Form S-4 with the SEC for our merger with REalloys which was initially filed on April 14, 2025. We have also submitted a listing application to NASDAQ for the combined entity. We currently expect the transaction to close in late August of this year. Closing is contingent on the registration statement being declared effective as well as Nasdaq and stockholder approval. Here is a basic breakdown of the transaction and why I believe it will be a great benefit to our stockholders:

• Upon closing of the Merger, we anticipate Blackbox legacy stockholders will own approximately 7.3% of the combined company’s shares of common stock.
• Blackbox’s legacy stockholders of record at closing will receive Contingent Value Rights (CVRs) entitling them to certain net proceeds from any future sale of all or a portion of the Blackbox fintech operations within 24 months following the closing of the merger.
• Blackbox currently has approximately 3.7 million common shares issued and outstanding. Please refer to our current registration statement on Form S-4 for additional information on the transaction.
  

In summation, we believe this transaction will significantly enhance stockholder value by giving our stockholders access to the lucrative and rapidly expanding domestic rare earth and magnet materials sector. Our legacy Blackbox fintech operations will continue to be operated through our subsidiary Blackbox.io, Inc. Additionally, if there is a sale of the Blackbox technology portfolio, our shareholders of record upon closing of the merger will receive their pro-rata proceeds from any such divestitures.

We believe that REalloys has a unique approach to the rare earth sector, employing a fully integrated model that is designed to operate as a stand-alone entity, or work in conjunction with other rare earth producers. Once complete, we expect this merger will allow REalloys to access the public markets for growth capital as well as utilizing their stock as a currency for future acquisitions.

I want to thank our stockholders for their continued loyalty as we work toward completion of this exciting and consequential transaction.

Gust Kepler
Chief Executive Officer

About REalloys Inc.

REalloys Inc. is an integrated company focused on the development and production of rare earth elements, with a primary asset in its 100% owned Hoidas Lake deposit located in northern Saskatchewan, Canada. The project already boasts a significant Mineral Resource Estimate of 2,153,000 tons of Total Rare Earth Oxides (TREO) in the Measured and Indicated categories, with significant potential upside. The Hoidas Lake deposit is distinguished by its unique combination of both Heavy Rare Earth Elements (HREEs), including Dysprosium, Terbium, Gadolinium, and Erbium, as well as Light Rare Earth Elements (LREEs) such as Neodymium, Praseodymium, Cerium, and Lanthanum. REalloys is strategically positioning itself by building a North American high-performance magnet supply chain tailored to U.S. protected markets. REalloys’ target sectors include National Defense Stockpiles, the Defense Industrial Base, Nuclear Industrial Base, robotics, electric aviation, and critical infrastructure. With a strong focus on an accelerated timeline, REalloys is committed to supporting the growing demand for these vital materials in key industries.

For more information, go to: https://realloys.com

About Blackboxstocks Inc.

Blackboxstocks Inc. is a financial technology and social media hybrid platform offering real-time proprietary analytics and news for stock and options traders of all levels. Our web-based software employs "predictive technology" enhanced by artificial intelligence to find volatility and unusual market activity that may result in the rapid change in the price of a stock or option. Blackbox continuously scans the NASDAQ, New York Stock Exchange, CBOE, and all other options markets, analyzing over 10,000 stocks and up to 1,500,000 options contracts multiple times per second. We provide our users with a fully interactive social media platform that is integrated into our dashboard, enabling our users to exchange information and ideas quickly and efficiently through a common network. We recently introduced a live audio/screenshare feature that allows our members to broadcast on their own channels to share trade strategies and market insight within the Blackbox community. Blackbox is a SaaS company with a growing base of users that spans over 40 countries.

For more information, go to: https://blackboxstocks.com/

Safe Harbor Clause and Forward-Looking Statements

This press release includes forward-looking statements. All statements other than statements of historical facts contained in this press release, including statements regarding our future results of operations and financial position, business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “expose,” “intend,” “may,” “might,” “opportunity,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements contained in this press release are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, (a) those factors described under the heading “Risk Factors” in our filings with the SEC, including our reports on Forms 10-K, 10-Q, 8-K and other filings that we make with the SEC from time to time; (b) that the Company and REalloys may be unable to complete the proposed Merger and related transactions because, among other reasons, conditions to the closing of the proposed transaction may not be satisfied or waived; (c) uncertainty as to the timing of completion of the proposed Merger and related transactions; (d) the inability to complete the proposed transaction due to the failure to obtain Company stockholder approval for the proposed Merger and related transactions or the failure to satisfy other conditions to completion of the proposed Merger and related transactions; (e) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement; (f) risks related to disruption of management’s attention from the Company’s ongoing business operations due to the proposed transaction; (g) the effect of the announcement of the proposed transaction on the Company’s relationships with its customers and suppliers, and on its operating results and business generally and (h) the outcome of any legal proceedings to the extent initiated against Company, REalloys or others following the announcement of the proposed transaction, as well as the Company’s and REalloys’ management's response to any of the aforementioned factors. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. These risks and others described under “Risk Factors” in our SEC filings may not be exhaustive.

Contacts

Blackboxstocks Inc.
Investors@blackboxstocks.com

PCG Advisory
Jeff Ramson
(646) 863-6893
jramson@pcgadvisory.com

REalloys Inc.
David Argyle - CEO REalloys Inc.
ceo@realloys.com

FAQ

What percentage will BLBX shareholders own of the combined company after the REalloys merger?

Blackboxstocks legacy stockholders will own approximately 7.3% of the combined company's shares of common stock after the merger closes.

What are the key assets of REalloys being acquired by Blackboxstocks?

REalloys' key assets include the Hoidas Lake Rare Earth Deposit in Saskatchewan (2.15M metric tonnes of rare earth oxides), PMT Critical Metals facility in Ohio, and strategic partnerships with the Saskatchewan Research Council.

When is the BLBX-REalloys merger expected to close?

The merger is expected to close in late August 2025, subject to SEC registration statement effectiveness, NASDAQ approval, and stockholder approval.

What happens to Blackboxstocks' existing fintech business after the merger?

The fintech operations will continue through the wholly-owned subsidiary Blackbox.io Inc., and shareholders will receive CVRs entitling them to proceeds from any potential sale within 24 months post-merger.

What is the production capacity target for the combined BLBX-REalloys entity?

The combined entity targets production capacity of 500 metric tonnes per year by 2026, expanding to 1,000 metric tonnes by 2028.

Who are the major customers of REalloys' rare earth materials?

Major customers include the U.S. Defense Logistics Agency (DLA), the U.S. Department of Energy's AMES National Laboratory, and other major players in the rare earth industry.