Business Context and Reporting Period
This Form 8-K was filed by Blackboxstocks Inc. on November 13, 2017. The report addresses the termination of a material definitive agreement. Note: The request metadata references "REALLOYS INC.", but the filing text explicitly identifies the registrant as Blackboxstocks Inc.
Key Financial Metrics
The filing does not provide standard financial statements (revenue, profit, cash flow, or margins). However, it details the financial terms of the terminated agreement:
- Lost Royalty Revenue (Year 1): $1.4 million (period: June 1, 2017 – May 31, 2018).
- Lost Royalty Revenue (Year 2): $3.6 million (period: June 1, 2018 – May 31, 2019).
- Total Potential Revenue at Risk: $5.0 million.
Material Changes
On November 13, 2017, the Company terminated its License Agreement with EIGH8T TECHNOLOGIES INC. (BBTR). The agreement allowed BBTR to use and sublicense the Company's proprietary real-time analytical web-based software for data from the Hong Kong, Shanghai, and Shenzhen Stock Exchanges. The termination was executed due to BBTR's failure to make timely payments of license fees.
Outlook, Risks, and Unusual Items
Management Commentary: The termination was a direct response to non-payment by the licensee.
Risks and Contingencies:
- Related Party Transaction: Stephen Chiang, a principal of BBTR, holds 3,000,000 shares of Company Common Stock, representing approximately 13% of issued and outstanding shares.
- Revenue Impact: The Company has lost the anticipated royalty stream of $5.0 million over the two-year term of the agreement.
Investor Verification Checklist
- Verify the current status of the $1.4 million owed for the first 12-month period and any legal actions taken to recover funds.
- Confirm the impact of this termination on the Company's projected revenue for fiscal years 2018 and 2019.
- Review the relationship between the Company and Stephen Chiang (13% shareholder) regarding the dispute.
- Assess whether the Company has secured alternative licensing agreements to replace the lost revenue from the Asian markets.