SEC Form S-4 filed by Blackboxstocks Inc.

Table of Contents

As filed with the Securities and Exchange Commission on May 10, 2024.

Registration No. 333-             

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-4

REGISTRATION STATEMENT UNDER

THE SECURITIES ACT OF 1933

BLACKBOXSTOCKS INC.

(Exact name of registrant as specified in its charter)

Gust Kepler

President and Chief Executive Officer

5430 LBJ Freeway, Suite 1485

Dallas, Texas 75240

(972) 726-9203

(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Copies to:

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement and the satisfaction or waiver of all other conditions under the Exchange Agreement described herein.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

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 to Section 7(a)(2)(B) of the Securities Act.  ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information contained in this preliminary information statement/prospectus is not complete and may be changed. We may not distribute or issue the securities being registered pursuant to this registration statement until the registration statement, as filed with the Securities and Exchange Commission (of which this preliminary information statement/prospectus is a part) is effective. This preliminary information statement/prospectus is not an offer to sell these securities and we are not soliciting offers to buy the securities described herein in any jurisdiction where the offer or sale is not permitted.

PRELIMINARY - SUBJECT TO COMPLETION

DATED MAY 10, 2024

BLACKBOXSTOCKS INC.

5430 LBJ Freeway, Suite 1485

Dallas, Texas 75240

INFORMATION STATEMENT/PROSPECTUS AND

NOTICE OF ACTION TAKEN BY WRITTEN CONSENT PURSUANT TO SECTION 14(C)

OF THE SECURITIES EXCHANGE ACT OF 1934

WE ARE NOT ASKING YOU FOR A PROXY AND YOU

ARE REQUESTED NOT TO SEND US A PROXY  

On December 12, 2023 Blackboxstocks Inc. (“Blackboxstocks,” “we,” “us” or the “Company”), Evtec Aluminium Limited, a company registered in England and Wales (“Evtec”) and certain holders of issued and outstanding capital shares of Evtec (each a “Seller”; collectively with holders of Evtec securities who subsequently become parties thereto, the “Sellers”) entered into a Share Exchange Agreement (the “Exchange Agreement”), a copy of which is attached to the Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on December 18, 2023 and incorporated by reference herein in the Section entitled “Where You Can Find More Information & Incorporation by Reference,” pursuant to which Blackboxstocks will acquire the entire issued and outstanding share capital of Evtec (the “Exchange”), which will become a wholly owned subsidiary. The combined company will operate under the name “Evtec Holdings, Inc.” (the “Combined Company”).

At the closing of the Exchange (the “Closing”), each ordinary share of Evtec will be sold to Blackboxstocks in exchange for a number of shares of Blackboxstocks common stock based on the exchange ratio formula in the Exchange Agreement (the “Exchange Ratio”), rounded to the nearest whole share of Blackboxstocks common stock after aggregating all fractional shares issuable to each Seller. The Exchange Ratio is subject to adjustment to the extent that Evtec raises more than $5.0 million in the Pre-Closing Financing (as defined below). The parties currently expect the Closing to occur during the third quarter of 2024. Immediately following the Closing and assuming an Exchange Ratio of 301.8 shares of Blackboxstocks common stock for each ordinary share of Evtec (which assumes Evtec raises $5.0 million in the Pre-Closing Financing), the pre-Closing Blackboxstocks securityholders and the holders of Evtec’s share capital (including all Evtec shares issued in connection with the Pre-Closing Financing) will own approximately 26.8% and 73.2%, respectively, of the outstanding common stock of the Combined Company.

As a condition to Closing under the Exchange Agreement, Evtec must raise at least $5.0 million through the sale of (or conversion of debt into) ordinary shares of Evtec in one or more private placement(s) to occur following the date of the Exchange Agreement and prior to or concurrently with the Closing (the “Pre-Closing Financing”). 

Shares of Blackboxstocks common stock are currently listed on the Nasdaq Capital Market under the symbol “BLBX”. Blackboxstocks intends to file an initial listing application with the Nasdaq Capital Market pursuant to Nasdaq’s rules for companies conducting a business combination that results in a change of control. Upon completion of the Exchange, Blackboxstocks will be renamed “Evtec Holdings, Inc.” and expects its common stock to trade on the Nasdaq Capital Market under the symbol “EVHI.” On May 9, 2024, the last trading day before the date of this information statement/prospectus, the closing sale price of Blackboxstocks common stock was $2.86 per share. This closing sale price is not necessarily indicative of the price at which the common stock of the Combined Company will trade after the Closing.

At a meeting of the board of directors of Blackboxstocks (the “Blackboxstocks Board”), the Blackboxstocks Board unanimously adopted resolutions (i) determining that it was advisable and in the best interests of the Company and our stockholders to enter into the Exchange Agreement and to consummate the Exchange and other transactions contemplated thereby (the “Transactions”), (ii) approving the execution, delivery and performance of the Exchange Agreement and the consummation of the Transactions and (iii) resolving to recommend that Blackboxstocks stockholders adopt the Exchange Agreement and the consummation of the Transactions.

This information statement/prospectus is being furnished on or about May 10, 2024 to the holders of record at the close of business on May 6, 2024 (the “Record Date”), of the common stock of Blackboxstocks in connection with an action taken by written consent of the holder of all of our issued and outstanding shares of Series A Convertible Preferred Stock (“Series A Preferred”) in lieu of a meeting to approve the following corporate actions contemplated under the Exchange Agreement (the “Approved Actions”):

1.        issuance of Blackboxstocks common stock to the holders of Evtec share capital in the Exchange, including holders who purchase ordinary shares of Evtec, in accordance with the terms of Exchange Agreement, in an amount representing more than 20% of the shares of Blackboxstocks common stock outstanding immediately prior to the Exchange, which will also constitute stockholder approval of a change of control of Blackboxstocks, pursuant to Nasdaq Listing Rules 5635(a) and 5635(b), respectively; and

2.         an amendment to our Articles of Incorporation changing Blackboxstocks’ corporate name from “Blackboxstocks Inc.” to “Evtec Holdings, Inc.”

Gust Kepler, a director, Chief Executive Officer, President of Blackboxstocks, and Blackboxstocks stockholder beneficially owning 573,210 issued and outstanding shares of our common stock and all 3,269,998 issued and outstanding shares of our Series A Preferred stock (the “Consenting Stockholder”), has executed a written consent approving the Approved Actions. The Consenting Stockholder held of record on the Record Date issued and outstanding shares of common stock and Series A Preferred stock representing 99.2% of the votes on all matters submitted to a vote of the stockholders, which was sufficient to approve the adoption of the Approved Actions. Dissenting stockholders do not have any statutory appraisal rights as a result of the action taken. The Blackboxstocks Board does not intend to solicit any proxies or consents from any other stockholders in connection with this action. All necessary corporate approvals have been obtained, and this information statement/prospectus is furnished solely to advise stockholders of the actions taken by written consent.

Section 78.320 of the Nevada Revised Statutes (the “NRS”) generally provides that any action required or permitted to be taken at a meeting of the stockholders may be taken without a meeting if, before or after the action, a written consent thereto is signed by stockholders holding at least a majority of the voting power, except that if a different proportion of voting power is required for such an action at a meeting, then that proportion of written consents is required. In order to eliminate the costs and management time involved in obtaining proxies and in order to effect the above Approved Actions as early as possible in order to accomplish the purposes of the Company as herein described, the Blackboxstocks Board consented to the utilization of, and did in fact obtain, the written consent of the Consenting Stockholder who owns shares representing all of our Series A Preferred stock and certain shares of our Common Stock.

This information statement/prospectus is being furnished pursuant to the requirements of Section 14(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) to the Company’s stockholders of record on the Record Date. The Closing of the Exchange and Approved Actions described herein may be effective as early as 20 days (the “20-day Period”) after the mailing of the information statement/prospectus to the holders of Blackbox common stock. The 20-day Period is expected to conclude on or about May 30, 2024.

The entire cost of furnishing this information statement/prospectus will be borne by the Company. We will request brokerage houses, nominees, custodians, fiduciaries and other like parties to forward this information statement/prospectus to the beneficial owners of the Blackboxstocks common stock held of record by them and will reimburse such persons for their reasonable charges and expenses in connection therewith.

We encourage you to read the entire accompanying information statement/prospectus carefully, in particular the risk factors set forth in the section entitled “Risk Factors” of the accompanying information statement/prospectus.

On behalf of Blackboxstocks, thank you for your continued support.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Transactions, including the Exchange, or the securities to be issued in connection therewith, passed upon the adequacy or accuracy of the accompanying information statement/prospectus or determined if the accompanying information statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

The date of this information statement/prospectus is May 10, 2024

REFERENCES TO ADDITIONAL INFORMATION

This information statement/prospectus incorporates important business and financial information about Blackboxstocks from other documents that we have filed with the U.S. Securities and Exchange Commission (the “SEC”) and that are contained in or incorporated by reference into this information statement/prospectus. For a listing of documents incorporated by reference into this information statement/prospectus, please read the section entitled “Where You Can Find More Information & Incorporation by Reference” of this information statement/prospectus. This information is available for you to review through the SEC’s website at www.sec.gov.

You may request copies of this information statement/prospectus and any of the documents incorporated by reference into this information statement/prospectus (other than certain exhibits or schedules to those documents) or other information concerning the Company, without charge, by telephone or written request directed to:

Attention: Corporate Secretary

Blackboxstocks Inc.

5430 LBJ Freeway, Suite 1485

Dallas, Texas 75240

(972) 726-9203

If you request any such documents, Blackboxstocks will mail them to you by first class mail, or another equally prompt means, after receipt of your request.

ABOUT THIS INFORMATION STATEMENT/PROSPECTUS

This information statement/prospectus, which forms part of a registration statement on Form S-4 (File No. 333-[●]) filed with the SEC by Blackboxstocks, constitutes a prospectus of Blackboxstocks under Section 5 of the Securities Act, with respect to the shares of Blackboxstocks common stock to be issued to Evtec Sellers in the Exchange pursuant to the Exchange Agreement. This information statement/prospectus also constitutes an information statement of Blackboxstocks under Section 14(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), informing the stockholders of Blackboxstocks of the approval of the Approved Actions required to effect the Exchange and related Transactions. Upon Closing of the Exchange described in this information statement/prospectus, each ordinary share of Evtec will be sold to Blackboxstocks in exchange for a number of shares of Blackboxstocks common stock.

Information contained in or incorporated by reference into this information statement/prospectus relating to Evtec has been supplied by Evtec. You should rely only on the information contained in or incorporated by reference into this information statement/prospectus. No person has been authorized to provide you with information that is different from what is contained in, or incorporated by reference into, this information statement/prospectus, and, if given or made by any person, such information must not be relied upon as having been authorized. The information contained in this information statement/prospectus speaks only as of the date of this information statement/prospectus or, in the case of information in a document incorporated by reference, as of the date of such document, unless the information specifically indicates that another date applies. Neither the mailing of this information statement/prospectus to stockholders of Blackboxstocks nor the issuance of common stock pursuant to the Exchange Agreement will create any implication to the contrary.

TABLE OF CONTENTS

QUESTIONS AND ANSWERS ABOUT THE EXCHANGE

The following questions and answers are intended to briefly address some commonly asked questions regarding the Exchange Agreement and the Transactions, including the Exchange. You are encouraged to carefully read the remainder of this information statement/prospectus, its exhibits and the documents that are referred to in this information statement/prospectus and to pay special attention to the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” of this information statement/prospectus, because the information contained in this section may not provide all the information that might be important to you with respect to the Exchange Agreement and the Transactions, including the Exchange. For further information, please read the section entitled “Where You Can Find More Information & Incorporation by Reference” of this information statement/prospectus.

Q:           What is the Exchange?

A:         On December 12, 2023, Blackboxstocks Inc. (“Blackboxstocks,” “we,” “us” or the “Company”), Evtec Aluminium Limited, a company registered in England and Wales (“Evtec”) and certain holders of issued and outstanding capital shares of Evtec (each a “Seller”; collectively with holders of Evtec securities who subsequently become parties thereto, the “Sellers”) entered into a Share Exchange Agreement (the “Exchange Agreement”). The Exchange Agreement contains the terms and conditions of the proposed business combination of Blackboxstocks and Evtec. Under the Exchange Agreement, Blackboxstocks will acquire the entire issued and outstanding share capital of Evtec (the “Exchange”) and Evtec will become a wholly owned subsidiary of Blackboxstocks, which will be renamed “Evtec Holdings, Inc.” (the “Combined Company”).

At the closing of the Exchange (the “Closing”), each ordinary share of Evtec will be sold to Blackboxstocks in exchange for a number of shares of Blackboxstocks common stock based on the exchange ratio formula in the Exchange Agreement (the “Exchange Ratio”), rounded to the nearest whole share of Blackboxstocks common stock after aggregating all fractional shares issuable to each Seller. The Exchange Ratio is subject to adjustment to the extent that Evtec raises more than $5.0 million in the Pre-Closing Financing (as defined below). The parties currently expect the Closing to occur during the third quarter of 2024. Immediately following the Closing and assuming an Exchange Ratio of 301.8 shares of Blackboxstocks common stock for each Evtec ordinary share (which assumes Evtec raises $5.0 million in the Pre-Closing Financing), the pre-Closing Blackboxstocks securityholders and the holders of Evtec’s share capital (including all Evtec shares issued in connection with the Pre-Closing Financing) are expected to own approximately 26.8% and 73.2%, respectively, of the outstanding common stock of the Combined Company.

As a condition to Closing under the Exchange Agreement, Evtec must raise at least $5.0 million through the sale of (or conversion of debt into) ordinary shares of Evtec in one or more private placement(s) to occur following the date of the Exchange Agreement and prior to or concurrently with the Closing (the “Pre-Closing Financing”). 

Shares of Blackboxstocks common stock are currently listed on the Nasdaq Capital Market under the symbol “BLBX”. Blackboxstocks intends to file an initial listing application with the Nasdaq Capital Market pursuant to Nasdaq’s rules for companies conducting a business combination that results in a change of control. Upon completion of the Exchange, as noted above Blackboxstocks will be renamed “Evtec Holdings, Inc.” and expects its common stock to trade on the Nasdaq Capital Market under the symbol “EVHI.” On May 9, 2024, the last trading day before the date of this information statement/prospectus, the closing sale price of Blackboxstocks common stock was $2.86 per share. This closing sale price is not necessarily indicative of the price at which the common stock of the Combined Company will trade after the Closing.

Q:           Why am I receiving this information statement/prospectus?  

A:           You are receiving this information statement/prospectus because you have been identified as a Blackboxstocks stockholder as of May 6, 2024 (the “Record Date”), and you are entitled to notice of the Approved Actions contemplated by the Exchange Agreement, including the issuance of shares of Blackboxstocks common stock pursuant to the Exchange Agreement. Upon completion of the Exchange, holders of issued and outstanding capital shares of Evtec will own shares of Blackboxstocks common stock, which is expected to be listed for trading on the Nasdaq Capital Market under the ticker symbol “EVHI.” This document serves as:

We have included in this information statement/prospectus important information about the Exchange, including the Approved Actions, the Exchange Agreement and the Transactions to be consummated thereunder. You should carefully read this information and the documents referred to herein in their entirety.

Please note that the delivery of the written consent of the Consenting Stockholder was sufficient to adopt and approve the Exchange Agreement and the Transactions (including the Exchange) on behalf of stockholders of Blackboxstocks. You are not being asked for a proxy, and you are requested not to send a proxy.

Q:           Why are Blackboxstocks stockholders not being asked to vote on the Exchange? 

A:          Pursuant to the Exchange Agreement and the Nevada Revised Statutes and Nasdaq listing rules, the following corporate actions contemplated under the Exchange Agreement (the “Approved Actions”) must be adopted and approved, by the affirmative vote of the holders of a majority stockholders holding at least a majority of the voting power entitled to vote thereon:

1.          issuance of Blackboxstocks common stock to the holders of Evtec share capital in the Exchange, including holders who purchase ordinary shares of Evtec, in accordance with the terms of Exchange Agreement, in an amount representing more than 20% of the shares of Blackboxstocks common stock outstanding immediately prior to the Exchange, which will also constitute stockholder approval of a change of control of Blackboxstocks, pursuant to Nasdaq Listing Rules 5635(a) and 5635(b), respectively; and

2.          an amendment to our Articles of Incorporation changing Blackboxstocks’ corporate name from “Blackboxstocks Inc.” to “Evtec Holdings, Inc.”

This condition was satisfied following the execution and delivery of written consent approving the Approved Actions by a stockholder beneficially owning 573,210 issued and outstanding shares of our common stock and all 3,269,998 issued and outstanding shares of our Series A Preferred stock (the “Consenting Stockholder”) representing 99.2% of the votes on all matters submitted to a vote of the stockholders. No further approval of Blackboxstocks stockholders is required to adopt the Exchange Agreement or to approve the Exchange. Therefore, your vote is not required and is not being sought. We are not asking you for a proxy, and you are requested not to send us a proxy. This information statement/prospectus is being provided to you for informational purposes only.

Q:           Why are Blackboxstocks and Evtec proposing to combine?

A:         Blackboxstocks and Evtec believe that the Exchange will result in a publicly listed technology-focused manufacturing company that is a leader in the design, manufacture, and supply of aluminum parts and tools, which has support of its major customers for the listing and in terms of a strong pipeline of future business, and which has significant growth potential as demand for hybrid and electric vehicles and related technologies increases. As a public company, Evtec will have greater access to capital which will be used to fund its organic growth as well as potential future acquisitions. In aggregate, Evtec has a forward looking order book of an estimated £540.5 million (being the aggregate of the order books for existing parts and new parts) with estimated capital expenditures of approximately £40 million over the next five years. Blackboxstocks believes that it can significantly enhance stockholder value by allowing its stockholders to retain 100% of their economic interest in the current Blackboxstocks operations via a contingent value right “CVR” and retain a 26.8% interest in the Combined Company. For a discussion of Blackboxstocks’ and Evtec’s reasons for the Exchange, see the section titled “The Exchange— Blackboxstocks Reasons for the Exchange” and “The Exchange—Evtec Board’s Reasons for the Exchange” in this information statement/prospectus.

Q:           What will Evtec Securityholders receive in the Exchange?

A:          Immediately after the consummation of the Exchange, the holders of Evtec share capital (including all Evtec shares issued in connection with the Pre-Closing Financing) will receive shares of Blackboxstocks common stock equal to the Exchange Ratio for each Evtec ordinary share held immediately prior to the Closing. Immediately following the Closing and assuming an Exchange Ratio of 301.8 shares of Blackboxstocks Common Stock for each Evtec Ordinary Share (which assumes that Evtec raises $5.0 million in the Pre-Closing Financing), the Evtec securityholders are expected to own approximately 73.2% of the outstanding common stock of the Combined Company, as described in the section titled “The Exchange Agreement—Exchange Consideration and Exchange Ratio.”

Q:           What will Blackboxstocks Securityholders receive in the Exchange?

A:          At the Closing, Blackboxstocks stockholders will continue to own and hold their existing shares of Blackboxstocks common stock. Immediately following the Closing and assuming an Exchange Ratio of 301.8 shares of Blackboxstocks Common Stock for each Evtec Ordinary Share (which assumes that Evtec raises $5.0 million in the Pre-Closing Financing), the pre-Closing Blackboxstocks stockholders are expected to retain approximately 26.8% of the outstanding common stock of the Combined Company, as described in the section titled “The Exchange Agreement—Exchange Consideration and Exchange Ratio.”

In addition, pre-Closing Blackboxstocks common stockholders will receive contingent value rights (“CVRs”) for each share of Blackboxstocks common stock held of record as of immediately prior to the Closing. The CVRs will represent the rights to receive cash payments or, under certain circumstances, distribution of securities of Blackbox.io Inc. held by Blackboxstocks, in connection with certain transactions involving the assets, rights, and properties owned, used, or useable by Blackbox.io Inc. in connection with or related to the business as conducted by Blackbox.io Inc. and all of the Company’s rights therein (the “CVR Agreement) within 24 months of Closing. Blackbox.io Inc. is a wholly owned subsidiary of Blackboxstocks organized to continue legacy business operations of the Company as conducted prior to the Exchange.

Pursuant to the Exchange Agreement and the CVR Agreement, each share of Blackboxstocks common stock held by Blackboxstocks stockholders as of a record date immediately prior to the Closing will receive a dividend of one CVR entitling such holders to receive, in connection with certain transactions within 24 months of Closing involving Blackbox.io Inc. or its assets occurring on or prior to an agreed-upon expiration date, an aggregate amount equal to the net proceeds received divided by the total number of shares of CVRs outstanding as of such record date or, the pro rata distribution of the shares of Blackbox.io Inc. common stock held by Blackboxstocks. See the section titled “Agreements Related to the Exchange—The Contingent Value Rights Agreement” in this information statement/prospectus.

Q:           Who will be the directors of the Combined Company following the Exchange?

A:           Following the Closing, the board of directors of the Combined Company will include a total of six directors, who have been designated by Evtec under the terms of the Exchange Agreement. It is anticipated that, following the Closing, the board of directors of the Combined Company will be constituted as follows:

Q:           Who will be the executive officers of the Combined Company following the Exchange?

A:           Immediately following the Closing, the executive management team of the Combined Company is expected to be as follows:

Q:           What are the U.S. federal income tax consequences of the Exchange to U.S. Holders?

A:         Blackboxstocks and Evtec intend to treat the Exchange as constituting a reorganization within the meaning of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (a “B-Reorganization”). As further described in the section titled “The Exchange—U.S. Federal Income Tax Consequences” in this information statement/prospectus, whether the Exchange constitutes a B-Reorganization is uncertain.

If the Exchange is not treated as a B-Reorganization, then, subject to the limitations and qualifications described in the above referenced section of this information statement/prospectus, each U.S. Holder of Evtec share capital will generally recognize capital gain or loss, for U.S. federal income tax purposes, on the receipt of shares of Blackboxstocks common stock issued to such U.S. Holder in the Exchange. The U.S. federal income tax consequences to each U.S. Holder of Evtec share capital will depend on that stockholder’s particular circumstances. Each U.S. Holder of Evtec share capital should consult with his, her or its tax advisor for a full understanding of the tax consequences of the Exchange to that stockholder.

There are no expected material U.S. federal income tax consequences of the Exchange to U.S. Holders of Blackboxstocks common stock.

Q:           What are the U.S. federal income tax consequences of the receipt of CVRs to U.S. Holders?

A:          Blackboxstocks intends to take the position that the fair market value of the CVRs cannot be reasonably ascertained on the date of the issuance of the CVRs and, accordingly, the issuance of the CVRs constitutes an “open transaction.” Accordingly, absent a change in law requiring otherwise, Blackboxstocks will not report the issuance of the CVRs as a current distribution of property with respect to its stock and will instead report each future cash payment or distribution of securities (if any) on the CVRs as a distribution by Blackboxstocks for U.S. federal income tax purposes, with each such payment being reported as a dividend to the extent of Blackboxstocks current or accumulated earnings and profits in the year in which such payment is made. However, as further described in the section titled “Agreements Related to the Share Exchange—The Contingent Value Rights Agreement” in this information statement/prospectus, there is substantial uncertainty as to the U.S. federal income tax treatment of the issuance of CVRs. Specifically, there is no authority directly addressing whether the issuance of contingent value rights with characteristics similar to the CVRs should be treated as a distribution of property with respect to Blackboxstocks’ common stock, a distribution of equity, a “debt instrument” or an “open transaction” for U.S. federal income tax purposes. Applicable U.S. Treasury regulations provide that “open transaction” treatment is only available in those “rare and extraordinary cases” involving contingent payment obligations in which the “fair market value of the obligation cannot reasonably be ascertained.” If the issuance of the CVRs is treated as an “open transaction,” a U.S. Holder (as defined in the above referenced section of this information statement/prospectus) would not generally recognize income in respect of the CVRs at the time such CVRs are issued and would take no tax basis in the CVRs. Future cash payments or distribution of securities (if any) on the CVRs would be treated as a distribution and constitute a dividend to the extent of the U.S. Holder’s pro rata share of Blackboxstocks current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) in the taxable year of such payment, then as a non-taxable return of capital to the extent of the U.S. Holder’s basis in its Blackboxstocks common stock, and finally as capital gain from the sale or exchange of Blackboxstocks common stock with respect to any remaining payment. Dividends received by individual U.S. Holders are currently eligible for reduced rates of taxation applicable to long-term capital gains, provided certain holding period requirements are met.

The tax consequences to you of the receipt of CVRs are subject to substantial uncertainty and may also depend on your particular facts and circumstances. Please consult your tax advisors as to the specific tax consequences to you.

Q:           What conditions must be satisfied to complete the Exchange?

A:          Blackboxstocks and Evtec are not required to complete the Exchange unless a number of conditions are satisfied or waived, which we refer to as the “closing conditions.” These closing conditions include, among other customary closing conditions:

In addition, each of Blackboxstocks’ and Evtec’s respective obligations to complete the Exchange, is subject to, among other conditions, the accuracy of the other party’s representations and warranties described in the Exchange Agreement (subject in many cases to “materiality” and “material adverse effect” qualifications) and the other parties’ compliance with its covenants and agreements in the Exchange Agreement in all material respects.

Q:           What happens if the Exchange is not completed?

A:          If the Exchange is not completed, Blackboxstocks and/or Evtec may be subject to the termination provisions of the Exchange Agreement which are further described in the section titled “The Exchange Agreement—Termination of the Exchange Agreement” in this information statement/prospectus. Generally, under certain circumstances provided for in the Exchange Agreement, termination may cause Blackboxstocks or Evtec to be liable for a $500,000 termination fee along with all fees and expenses (up to $250,000) incurred in connection with the authorization, negotiation, execution and performance of the Exchange Agreement and the Transactions to be consummated thereunder.

Q:           Do persons involved in the Exchange have interests that may conflict with mine as a Blackboxstocks stockholder?

A:          Yes. You should be aware that certain Blackboxstocks directors and executive officers have interests in the Exchange that are different from, or are in addition to, yours. In connection with the Exchange, Blackboxstocks and Gust Kepler, a director and our Chief Executive Officer and President, will enter into an Option Agreement (the “Option Agreement”) pursuant to which, subject to consummation of the Exchange, Blackboxstocks shall have the right to call for redemption and Mr. Kepler shall have the right to cause Blackboxstocks to redeem all of the issued and outstanding Series A Convertible Preferred Stock of Blackboxstocks held by Mr. Kepler in exchange for shares of Series A Convertible Preferred Stock of Blackbox.io Inc. If the Option Agreement is exercised, the shares of Series A Convertible Preferred Stock of Blackbox.io Inc. Mr. Kepler would receive, each share of which is entitled to 100 votes on all stockholder matters, would vest him with direct voting control over Blackbox.io Inc. Mr. Kepler is currently the Chief Executive Officer, President, Secretary, Treasurer and sole director of Blackbox.io, Inc. In addition, Robert Winspear, a director and the current Chief Financial Officer and Secretary of Blackboxstocks, will continue to serve in such positions for the Combined Company after the Exchange. See “The Exchange—Interests of the Blackboxstocks Directors and Executive Officers in the Exchange” in this information statement/prospectus.

Q:           When do you expect the Exchange to be consummated?

A:          Blackboxstocks and Evtec anticipate that the Closing of the Exchange will occur in the third quarter of 2024, shortly after the 20-day period after the mailing of this information statement/prospectus, but the companies cannot predict the exact timing. For more information, see the section titled “The Exchange Agreement—Conditions to the Closing of the Exchange Agreement” in this information statement/prospectus.

Q:           What approval by Blackboxstocks stockholders is required to adopt the Exchange Agreement and, therefore, approve the Exchange?

A:          The Exchange Agreement and Transactions to be consummated thereunder were approved by our Board of Directors (the “Board”) by written consent on December 12, 2023. Thereafter, on May 6, 2023, a Blackboxstocks stockholder beneficially owning 573,210 issued and outstanding shares of our common stock and all 3,269,998 issued and outstanding shares of our Series A Preferred stock (the “Consenting Stockholder”) executed a written consent approving the Approved Actions. The Consenting Stockholder held of record on the Record Date issued and outstanding shares of common stock and Series A Preferred stock representing 99.2% of the votes on all matters submitted to a vote of the stockholders, which was sufficient to approve the adoption of the Exchange Agreement and, therefore, approve the Exchange.

Q:           Can Blackboxstocks stockholders dissent and require appraisal of their shares? 

A:           No. Blackboxstocks stockholders will not have dissenters’ rights to be paid the value of their shares in cash in connection with the Exchange. See “The Exchange - No Appraisal Rights and Dissenters’ Rights.”

Q:           Who can help answer my questions?

A:         If you are a Blackboxstocks stockholder and would like additional copies, without charge, of this information statement/prospectus or if you have questions about the Exchange, you should contact:

Blackboxstocks Inc.

5430 LBJ Freeway, Suite 1485

Dallas, Texas 75240

(972) 726-9203

Attention: Corporate Secretary

If you are a holder of Evtec share capital, and would like additional copies, without charge, of this information statement/prospectus or if you have questions about the Exchange, you should contact:

Evtec Aluminium Limited

Chelmarsh Daimler Green, Coventry, CV6 3LT, England

Tel: +44 024-7642-7000

Attention: Amaya Corcuera

PROSPECTUS SUMMARY

This summary highlights selected information from this information statement/prospectus and may not contain all of the information that is important to you. To better understand the Exchange and the Approved Actions taken by the Consenting Stockholder, you should read this entire information statement/prospectus carefully, including the other exhibits and appendices to which you are referred herein. For more information, see the section titled “Where You Can Find More Information & Incorporation by Reference” in this information statement/prospectus.

The Companies

Blackboxstocks Inc.

Blackboxstocks Inc.

5430 LBJ Freeway, Suite 1485

Dallas, Texas 75240

(972) 726-9203

Blackboxstocks Inc., a Nevada corporation is a holding company that serves as the parent of its operating subsidiary, Blackbox.io Inc., a Delaware corporation. Blackboxstocks common stock is currently listed on the Nasdaq Capital Market under the ticker symbol “BLBX.” The Company’s website address is https://blackboxstocks.com. Information contained on the Company’s website or connected thereto is provided for textual reference only and does not constitute part of, and is not incorporated by reference into, this information statement/prospectus or the registration statement of which it forms a part.

Blackbox.io Inc.

Blackbox.io Inc.

5430 LBJ Freeway, Suite 1485

Dallas, Texas 75240

(972) 726-9203

Blackbox.io Inc., a Delaware corporation and wholly owned operating subsidiary of 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 (the “Blackbox System”) 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. We continuously scan the New York Stock Exchange (“NYSE”), NASDAQ, Chicago Board Options Exchange (the “CBOE”) and other options markets, analyzing over 10,000 stocks and over 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 have also introduced a live audio/video feature that allows our members to broadcast on their own channels to share trading strategies and market insight within the Blackbox community. We employ a subscription- based Software as a Service (“SaaS”) business model and maintain a growing base of users that spans over 40 countries.

The Blackbox System web application was launched 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 the Blackboxstocks website at https://blackboxstocks.com.

Evtec Aluminium Limited

Evtec Aluminium Limited

Having its registered office address at: Chelmarsh, Daimler Green, Coventry, CV6 3LT, England+44 024-7642-7000

Evtec Aluminium Limited (“Evtec”), a company registered in England and Wales with registration number 13182146, specializes in the design, manufacture and supply of aluminum parts and tools to its principal customer, Jaguar Land Rover (“JLR”), Britain’s largest automotive manufacturer, and other intermediate suppliers to European Original Equipment Manufacturers (“OEMs”). Evtec aims to develop parts with extreme performance, durability, and lightweight construction in mind.

Evtec is attractive to OEMs, such as JLR, because it provides a complete solution by offering both foundry and machining capabilities, as well as in-house engineering capabilities to be able to develop tools which will be used in JLR’s assembly line for new hybrid and electric vehicles. Evtec operates from two sites in the United Kingdom (UK), one in Coventry and one in Kidderminster. Both sites are located in the ‘West Midlands’, an area of the United Kingdom, recognized as a traditional automotive manufacturing center. Evtec’s Kidderminster site is a High Pressure Die Casting (“HPDC”) foundry, the most modern one of its type in the UK, producing strong, light weight complex aluminum parts for use in hybrid engines and electric power units such as motor housings and electronic drive units. The parts produced in Kidderminster are transported daily to Chelmarsh, Evtec’s site in Coventry, which houses one of the UK’s largest machining facilities, where the cast parts are machined and sequenced for delivery to its OEM customers on a ‘Just in Time’ basis.

Evtec’s sites are located nearby to JLR’s headquarters in Coventry and JLR’s iconic plant in Solihull where Land Rover has manufactured its pioneering vehicles since 1947. Evtec’s infrastructure and geographic location means that it is perfectly located to provide “Just in Time” delivery capability to OEMs and other automotive suppliers in the United Kingdom, which has become increasingly important in a new era of supply chain shocks and geopolitical problems, which has led to widespread disruption across the automotive industry.

The Combined Company Following the Exchange

The Combined Company will continue to be a Nevada corporation, which has elected to be taxed as a C-Corporation under the Internal Revenue Code. The Combined Company is expected to have a pro forma equity market capitalization of approximately $33,345,000 and a total enterprise value (including debt) of approximately $51,218,000 based on Blackboxstocks’ closing price of $2.77 per share and Evtec’s fair market value of $835.92 per share on May 3, 2024. The business of the Combined Company will be conducted through its subsidiaries, including Blackbox.io, Inc. and Evtec Aluminium Limited.

The Combined Company will operate under the name “Evtec Holdings, Inc.” and expects its common stock to trade on the Nasdaq Capital Market under the symbol “EVHI.”

The Combined Company’s principal executive offices will be located at 5430 LBJ Freeway, Suite 1485, Dallas, Texas 75240.

The Exchange

Blackboxstocks will acquire the entire issued and outstanding share capital of Evtec (including all shares issuable in connection with the Pre-Closing Financing). At the Closing, each ordinary share of Evtec will be acquired by Blackboxstocks in exchange for a number of shares of Blackboxstocks common stock, $0.001 par value per share, based on the Exchange Ratio (described further in this information statement/prospectus), rounded to the nearest whole share of Blackboxstocks common stock after aggregating all fractional shares issuable to each Seller. Immediately following the Closing (assuming Evtec raises $5.0 million in Pre-Closing Financing), the Blackboxstocks pre-Closing common stockholders and holders of Evtec’s share capital are expected to own approximately 26.8% and 73.2%, respectively, of the outstanding common stock of the Combined Company. Following the Closing, the board of directors of the Combined Company will include a total of six directors, designated by Evtec. In the event either Gust Kepler or the Combined Company elects to exercise its Option Agreement pursuant to which either party shall have the right to cause redemption all of the issued and outstanding Series A Convertible Preferred Stock of the Combined Company retained by Mr. Kepler, voting control of the Combined Company would effectively be vested in the holders of common stock of the Combined Company.

Reasons for the Exchange

Blackboxstocks and Evtec believe that the Combined Company will have the following potential advantages:

Certain factors considered by the Blackboxstocks board of directors and Evtec board of directors in reaching their determination can be found in the sections entitled “The Exchange—Blackboxstocks Board’s Reasons for the Exchange” and “The Exchange—Evtec Board’s Reasons for the Exchange.”

Interests of Blackboxstocks’ Directors and Executive Officers in the Exchange

In connection with the consummation of the Exchange, Blackboxstocks’ directors and executive officers have interests in the Exchange that may be different from, or in addition to, those of the stockholders of Blackboxstocks generally. In connection with the Exchange, Blackboxstocks and Gust Kepler, a director and our Chief Executive Officer and President, will enter into an Option Agreement (the “Option Agreement”) pursuant to which, subject to consummation of the Exchange, Blackboxstocks shall have the right to call for redemption and Mr. Kepler shall have the right to cause Blackboxstocks to redeem all of the issued and outstanding Series A Convertible Preferred Stock of Blackboxstocks held by Mr. Kepler in exchange for shares of Series A Convertible Preferred Stock of Blackbox.io Inc. If the Option Agreement is exercised, Mr. Kepler would receive Series A Convertible Preferred Stock of Blackbox.io Inc. each share of which is entitled to 100 votes on all stockholder matters, which would vest him with direct voting control over Blackbox.io Inc. Mr. Kepler is currently the Chief Executive Officer, President, Secretary, Treasurer and sole director of Blackbox.io, Inc. In addition, Robert Winspear, a director and the current Chief Financial Officer and Secretary of Blackboxstocks, will continue to serve in such positions for the Combined Company after the Exchange. The Blackboxstocks Board was aware of these interests and considered them, among other things, in reaching its decision to approve the Exchange Agreement, the Exchange and related Transactions. For additional information, see “The Exchange—Interests of Blackboxstocks’ Directors and Executive Officers in the Exchange.” 

Interests of Evtec’s Directors and Executive Officers in the Exchange

In connection with the consummation of the Exchange, the Evtec directors and executive officers have an interest in the transaction by virtue of individual shareholding in Evtec. Such shares will be acquired by Blackboxstocks as part of the Exchange. Furthermore, certain directors and executive officers of Evtec will be appointed to the board of directors of the Combined Company. Further information concerning the interests of the directors and executive officers are detailed in the section entitled, “The Exchange—Interests of Evtec’s Directors and Executive Officers in the Exchange.”

Directors and Management of the Combined Company After the Exchange

Following the consummation of the Exchange, the board of directors of the Combined Company will consist of six members, comprised of David Roberts, Robert Winspear, Steven Norris, Julia Steinbrenner, Stephen (“Steve”) Ilott and Anil Khurana, with Steven Norris to be appointed Chairman of the Combined Company’s board of directors. Effective as of the Closing of the Exchange, the Combined Company’s executive officers are expected to include David Roberts, who will serve as Chief Executive Officer and President, Robert Winspear who will serve as Chief Financial Officer and Secretary, Keith Stanton, who will serve as Group Managing Director, David G. Roberts, who will serve as Group Finance Director and Gust Kepler who will serve as Chief Executive Officer of Blackbox.io, Inc.

Regulatory Approvals Required to Complete the Exchange

In the United States, Blackboxstocks must comply with applicable federal and state securities laws and the rules and regulations of Nasdaq (the “Nasdaq Listing Rules”) in connection with the issuance of shares of Blackboxstocks common stock and the filing of this information statement/prospectus.

Listing of Blackboxstocks Common Stock

Blackboxstocks intends to file an initial listing application with the Nasdaq Capital Market pursuant to Nasdaq’s rules for companies conducting a business combination that results in a change of control. It is a condition to completion of the Exchange that the Blackboxstocks common stock issuable in connection with the Exchange be approved for listing on Nasdaq, subject to consummation of the Exchange and official notice of issuance. No delisting or suspension in trading of Blackboxstocks common stock on Nasdaq shall have occurred and be continuing upon the consummation of the Exchange.

Anticipated Accounting Treatment

Blackboxstocks prepares its financial statements in accordance with U.S. GAAP. The Exchange will be accounted for as a reverse acquisition using the acquisition method of accounting, with Evtec considered the acquirer for accounting purposes. For more information, see “The Exchange—Anticipated Accounting Treatment.”

No Appraisal Rights and Dissenters’ Rights

Under the Nevada Revised Statutes (“NRS”), the stockholders of Blackboxstocks do not have dissenters’ or appraisal rights in connection with the issuance of shares of common stock pursuant to the Exchange Agreement and the resulting change of control of Blackboxstocks. Evtec shareholders generally do not have appraisal rights under English law.

Voting Required for Approval of the Exchange

The shares of Blackboxstocks common stock and preferred stock are the only classes of voting securities of the Company outstanding (the “Voting Stock”). Each share of common stock is entitled to one (1) vote per share on all matters submitted to a vote of the stockholders. As of the Record Date, there were 3,226,145 shares of common stock issued and outstanding. Each share of Series A Preferred stock of the Company is entitled to one hundred (100) votes per share on all matters submitted to a vote of the stockholders. As of the Record Date, there were 3,269,998 shares of Series A Preferred stock issued and outstanding, collectively representing 326,999,800 votes on each matter presented to the stockholders for a vote. For the approval of the Approved Actions necessary to consummate the Exchange and related Transactions, the consent of a majority of the voting power on the Record Date, or 165,193,256 out of 330,386,510 total stockholder votes, was required for approval by written consent without a meeting.

This condition was satisfied following the execution and delivery of written consent by Gust Kepler, a director, Chief Executive Officer and majority stockholder beneficially owning 573,210 issued and outstanding shares of our common stock and all 3,269,998 issued and outstanding shares of our Series A Preferred stock, representing 99.2% of the votes on all matters submitted to a vote of the stockholders (the “Consenting Stockholder”) approving the Approved Actions. No further approval of Blackboxstocks stockholders is required to adopt the Exchange Agreement or to approve the Exchange. Therefore, your vote is not required and is not being sought. We are not asking you for a proxy, and you are requested not to send us a proxy. This information statement/prospectus is being provided to you for informational purposes only.

The Exchange Agreement

Exchange Consideration and Exchange Ratio

At the Closing, each ordinary share of Evtec will be acquired by Blackboxstocks in exchange for a number of shares of Blackboxstocks common stock based on the Exchange Ratio, rounded to the nearest whole share of Blackboxstocks common stock after aggregating all fractional shares issuable to each Seller. Each Evtec ordinary share in issue immediately prior to the Closing will be sold to Blackboxstocks by the Seller that owns such Evtec ordinary share in consideration for such number of duly authorized, validly issued, fully paid and non-assessable shares of Blackboxstocks common stock as is equal to the Exchange Ratio, rounded to the nearest whole share of Blackboxstocks common stock (after aggregating all fractional shares of Blackboxstocks common stock issuable to such Seller). No fractional shares of Blackboxstocks will be issued in the Exchange. For more information, see “The Exchange Agreement—Exchange Consideration and Exchange Ratio.”

Conditions to the Closing of the Exchange

A number of conditions must be satisfied or, to the extent permitted by law, waived before the Exchange can be consummated. These include, among others:

Termination of the Exchange Agreement

The Exchange Agreement may be terminated under certain circumstances, including: (i) by either party upon mutual written consent, (ii) by either party if the Exchange has not been consummated before June 30, 2024, subject to extension upon certain conditions, (iii) by either party if a governmental body prohibits the Exchange, (iv) by Evtec upon an uncured breach by Blackboxstocks that would reasonably be expected to cause the closing conditions not to be satisfied, (v) by Evtec upon an uncured Blackboxstocks Material Adverse Effect, (vi) by Blackboxstocks upon an uncured breach by Evtec that would reasonably be expected to cause the closing conditions not to be satisfied, (vii) by Blackboxstocks upon an uncured Evtec Material Adverse Effect. For more information regarding termination of the Exchange Agreement, see “The Exchange Agreement—Termination of the Exchange Agreement.”

Termination Fees and Expense Amounts

In connection with the termination of the Exchange Agreement under specified circumstances, Blackboxstocks may be required to pay to Evtec a termination fee of $500,000 plus certain fees and expenses (up to $250,000), or Evtec may be required to pay Blackboxstocks a termination fee of $500,000 plus certain fees and expenses (up to $250,000). Notwithstanding the foregoing, Evtec shall be responsible for up to $175,000 of Blackboxstocks’ legal fees and expenses as set forth in Binding LOI Amendment, regardless of whether or not the Exchange Agreement is terminated. For more information regarding the fee and expense amount, see “The Exchange Agreement—Termination of the Exchange Agreement—Termination Fees and Expense Amounts.”

Agreements Related to the Exchange

Blackboxstocks’ Written Consent of Consenting Shareholder

In connection with the Exchange Agreement, the Consenting Stockholder consented to, approved, and adopted resolutions relating to the Exchange including (i) the Exchange Agreement, Exchange, and issuance of shares of Blackboxstocks common stock as provided in the Exchange Agreement, (ii) issuance of shares of Blackboxstocks common stock to the holders of Evtec share capital in the Exchange constituting a change of control under Nasdaq Listing Rules, (iii) amending Blackboxstocks’ articles of incorporation, and (iv) authorizing Blackboxstocks’ board of directors to cause the Company to perform its obligations under the Exchange Agreement and file a certificate of amendment to the Company’s articles of incorporation. For more information regarding the Written Consent of Consenting Shareholder, see “Agreements Related to the Exchange—Blackboxstocks’ Written Consent of Consenting Shareholder.”

The Option Agreement

Blackboxstocks and Gust Kepler will enter into the Option Agreement as a condition to Closing of the Exchange under the Exchange Agreement. The Option Agreement provides for the right of Blackboxstocks to call for redemption and provides Mr. Kepler the right to cause Blackboxstocks to redeem all of the issued and outstanding shares of Series A Convertible Preferred Stock of Blackboxstocks held by Mr. Kepler in exchange for shares of Series A Convertible Preferred Stock of Blackbox.io Inc. In the event either Gust Kepler or the Combined Company elects to exercise its Option Agreement pursuant to which either party shall have the right to cause redemption all of the issued and outstanding Series A Convertible Preferred Stock of the Combined Company retained by Mr. Kepler, voting control of the Combined Company would effectively be vested in the holders of common stock of the Combined Company. For more information regarding the Option Agreement, see “Agreements Related to the Exchange—The Option Agreement.”

Joinder Agreements

Any person who acquires shares in Evtec share capital after the date of the Exchange Agreement and before Closing is required to execute a Joinder Agreement which causes such person to be fully bound by and subject to the provisions of, and be a party to, the Exchange Agreement as a Seller thereunder as though an original party thereto.

Contingent Value Rights Agreement

Upon Closing of the Exchange, Blackboxstocks, Blackbox.io Inc., the Rights Agent (as defined therein), and the Holder Representative (as defined therein) will enter into a CVR Agreement entitling each holder of Blackboxstocks common stock on a record date prior to the Closing of the Exchange to a dividend of one CVR issued by Blackboxstocks per share of Blackboxstocks common stock held by such Holder. The CVRs will do not have any voting or dividend rights, will not accrue interest on any amount payable on the CVRs to any Holder, do not represent any equity or ownership interest in the Company, and do not constitute a security of the Company. For more information on the CVR Agreement, see “Agreements Related to the Exchange—The Contingent Value Rights Agreement.”

U.S. Federal Income Tax Consequences

The parties intend for the Exchange to constitute a tax-free reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code). Blackboxstocks and Evtec intend to treat the Exchange as constituting a reorganization within the meaning of Section 368(a)(1)(B) of the Code (a “B-Reorganization”). The U.S. Holder’s tax basis of the shares of Blackboxstocks common stock received will be the same as the tax basis of the U.S. Holder’s Evtec ordinary shares exchanged therefor. The holding period of the Blackboxstocks common stock in the hands of the U.S. Holder would include the holding period of the U.S. Holder’s ordinary shares of Evtec exchanged therefor.

If the Exchange is not treated as a B-Reorganization, then, subject to the limitations and qualifications described in the above referenced section of this information statement/prospectus, each U.S. Holder of Evtec share capital will generally recognize capital gain or loss, for U.S. federal income tax purposes, on the receipt of shares of Blackboxstocks common stock issued to such U.S. Holder in the Exchange. The U.S. federal income tax consequences to each U.S. Holder of Evtec share capital will depend on that stockholder’s particular circumstances. Each U.S. Holder of Evtec share capital should consult with his, her or its tax advisor for a full understanding of the tax consequences of the Exchange to that stockholder.

There are no expected material U.S. federal income tax consequences of the Exchange for U.S. Holders of Blackboxstocks common stock.

Material U.K. Income and Capital Gains Tax Consequences of the Exchange

The summary set out below is based on current United Kingdom (“UK”) tax law and HM Revenue and Customs (“HMRC”) practice (which may not be binding on HMRC) as of the date of this information statement/prospectus, both of which are subject to change, possibly with retrospective effect.

Blackboxstocks and Evtec intend the Exchange to qualify as a UK tax free reorganization. Subject to certain conditions, the Capital Gains Tax (“CGT”) legislation in Section 135 TCGA 1992 provides that Evtec ordinary shares exchanged for Blackboxstocks common stock may be treated for UK tax residents as a reorganization of the original holding such that the Blackboxstocks common stock may be treated as if they were, and as having been acquired at the same time and for the same consideration as, the original Evtec stockholding and, where this treatment applies, there should be no disposal for CGT purposes as a result of such reorganization.

The conditions of Section 135 TCGA 1992 are:

Evtec has applied for an advance clearance from HMRC under Section 138 TCGA 1992 that the bona fide commercial reasons test applies but there is no guarantee that such clearance will be received. It should be noted that this test should only be relevant in the case of stockholders who (together with persons connected with them) currently hold more than 5% of the shares in Evtec.

Evtec has also applied for advance clearance from HMRC under Section 701 ITA 2007 and Section 748 CTA 2010 that the main purpose, or one of the main purposes, of the Exchange is not to obtain an income tax or corporation tax advantage for UK individual or corporate stockholders, so that the transactions in securities rules should not apply to recharacterize the Exchange into a taxable event from the perspective of such individuals or corporates.

In the event that the conditions of Section 135 TCGA 1992 are not met and/or HMRC otherwise does not provide its clearance, the Exchange will be a chargeable event under the provisions of the CGT legislation. Each UK stockholder of Evtec share capital will generally recognize a chargeable gain or loss on the receipt of shares of Blackboxstocks common stock issued to such holder of Evtec share capital.

Comparison of Rights of Blackboxstocks Stockholders and Evtec Shareholders

Holders of Evtec ordinary shares will have different rights following the effective time of the Exchange Agreement because they will hold Blackboxstocks common stock instead of Evtec ordinary shares, and there are differences between the governing documents of Evtec and Blackboxstocks. Blackboxstocks is incorporated under the laws of State of Nevada, and the rights of stockholders of Blackboxstocks are currently, and will continue to be, governed by the Nevada Revised Statutes. The internal affairs of Blackboxstocks are currently, and will continue to be, governed by Blackboxstocks’ amended and restated articles of incorporation and amended and restated bylaws. Evtec is registered in England and Wales, and the rights of Evtec shareholders are currently governed by the Companies Act of 2006. The internal affairs of Evtec are currently governed by the respective company’s articles of association.

After the Closing, Evtec shareholders will become stockholders of Blackboxstocks. Due to differences between the governing laws and documents of Evtec and Blackboxstocks, the Exchange will result in Evtec shareholders having different rights once they become Blackboxstocks stockholders. For more information regarding the differences in rights of Blackboxstocks stockholders and Evtec shareholders, see “Comparison of Rights of Blackboxstocks Stockholders and Evtec Shareholders.”

Summary of Risk Factors

Both Blackboxstocks and Evtec are subject to various risks associated with their industries. Some of the risks related to Evtec’s business and industry include, but are not limited to, the following risks:

In addition, the Exchange, including the possibility that the Exchange may not be completed, poses a number of risks to the Company and the Company’s shareholders, including the following risks:

Further, following the completion of the Exchange, the Combined Company will be subject to risks, including:

Blackboxstocks is also subject to risks, as set forth under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 under Item 1A, which is filed with the SEC and incorporated by reference in this information statement/prospectus.

These risks and other risks are discussed in greater detail under the section titled “Risk Factors” of this information statement/prospectus. Blackboxstocks shareholders are encouraged to read and consider all of these risks carefully.

Summary Unaudited Pro Forma Condensed Combined Financial Information

The following summary unaudited pro forma condensed combined financial statements give effect to the Exchange contemplated by the Exchange Agreement described in the section entitled “Unaudited Pro Forma Condensed Combined Financial Statements.” The summary unaudited pro forma condensed combined balance sheet data as of December 31, 2023 gives pro forma effect to the Exchange as if it had occurred on December 31, 2023. The summary unaudited pro forma condensed combined statement of operations data for the fiscal year ended December 31, 2023 give pro forma effect to the Exchange as if it had occurred on January 1, 2023.

The summary pro forma data have been derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements of the Combined Company appearing elsewhere in this information statement/prospectus and the accompanying notes. The unaudited pro forma condensed combined financial statements are based upon, and should be read in conjunction with, the historical consolidated financial statements of Blackboxstocks and Evtec and related notes included in this information statement/prospectus. The summary pro forma data have been presented for informational purposes only and are not necessarily indicative of what the Combined Company’s financial position or results of operations actually would have been had the Exchange been completed as of the dates indicated. In addition, the summary pro forma condensed combined financial statements do not purport to project the future financial position or operating results of the Combined Company.

Summary Unaudited Pro Forma Combined Financial Information

Market Price and Dividend Information

Market Price of Securities

Blackboxstocks common stock is listed on Nasdaq, trading under the symbol “BLBX”. Evtec is a private company and ordinary shares of Evtec are not publicly traded. The closing price of Blackboxstocks common stock on December 11, 2023, the last trading day prior to the public announcement of the Exchange, was $3.90 per share, and the closing price of Blackboxstocks common stock was $2.77 on May 3, 2024, each as reported on the Nasdaq Capital Market. These closing sale prices are not necessarily indicative of the price at which the common stock of the combined company will trade after the Closing. Because the market price of Blackboxstocks common stock is subject to fluctuation, the market value of the shares of Blackboxstocks common stock that Evtec shareholders will be entitled to receive in the Exchange may increase or decrease.

Assuming Nasdaq accepts the Combined Company’s application for initial listing on the Nasdaq Capital Market, following the consummation of the Exchange, the Combined Company will be renamed “Evtec Holdings, Inc.” and expects its common stock to trade on the Nasdaq Capital Market under the symbol “EVHI.”

As of May 6, 2024, the Record Date for approval of the Approved Actions, there were approximately 618 holders of record of Blackboxstocks common stock. As of May 3, 2024, Evtec had 46 holders of record of Evtec ordinary shares. For detailed information regarding the beneficial ownership of certain Blackboxstocks stockholders upon consummation of the Exchange, see the section titled “Principal Stockholders of the Combined Company” in this proxy statement/prospectus.

Dividends

Blackboxstocks has never declared or paid cash dividends and does not anticipate paying cash dividends on the Blackboxstocks common stock for the foreseeable future.

Notwithstanding the foregoing, any determination to pay cash dividends subsequent to the Exchange will be at the discretion of the Combined Company’s then-current board of directors and will depend upon a number of factors, including the Combined Company’s results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors the then-current board of directors deems relevant.

RISK FACTORS

In addition to the other information included and incorporated by reference into this information statement/prospectus, including the matters addressed in “Cautionary Statement Regarding Forward-Looking Statements”, you should carefully consider the following risks regarding your investment. In addition, you should read and consider the risks associated with the business of Blackboxstocks because these risks will also affect the Combined Company following completion of the Exchange. These risks can be found under the caption “Risk Factors” in the Blackboxstocks’ Annual Report on Form 10-K for the year-ended December 31, 2023 under Item 1A, which is filed with the SEC and incorporated by reference in this information statement/prospectus. You should also read and consider the other information contained in and incorporated by reference into this information statement/prospectus and the other documents incorporated by reference into this information statement/prospectus. For information, see the section entitled “Where You Can Find More Information & Incorporation by Reference.”

Any of the following risks could materially and adversely affect the business, financial condition and results of operations of Blackboxstocks, Evtec or the Combined Company and the actual outcome of matters as to which forward-looking statements are made in this information statement/prospectus. In such case, the trading price for the Combined Company common shares could decline, and you could lose all or part of your investment. The risks described below are not the only risks that Blackboxstocks and Evtec currently face or that the Combined Company will face after the consummation of the Exchange. Additional risks and uncertainties not currently known or that are currently expected to be immaterial may also materially and adversely affect the Combined Company’s business, financial condition and results of operations or the price of Combined Company’s common shares in the future. Past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods.

Risks Relating to the Exchange

The Exchange may give rise to taxable income in the United States for stockholders, and there can be no assurances that material adverse tax consequences will not result from the Exchange or related transactions in the U.S., or other jurisdictions. Any such adverse tax consequences could adversely affect the Combined Company or its share price, following completion of the Exchange.

The parties intend for the Exchange to constitute a tax-free reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code). Blackboxstocks and Evtec intend to treat the Exchange as constituting a reorganization within the meaning of Section 368(a)(1)(B) of the Code (a “B-Reorganization”). Provided that the Exchange is treated for U.S. federal income tax purposes as a B-Reorganization within the meaning of 368(a) of the Code, upon a U.S. Holder of Evtec ordinary shares who exchanges Evtec shares for Blackboxstocks common stock in the Exchange, such U.S. Holder generally would not recognize gain or loss. The U.S. Holder’s tax basis of the shares of Blackboxstocks common stock received will be the same as the tax basis of the U.S. Holder’s Evtec ordinary shares exchanged therefor. The holding period of the Blackboxstocks common stock in the hands of the U.S. Holder would include the holding period of the U.S. Holder’s ordinary shares of Evtec exchanged therefor.

If the Exchange is not treated as a B-Reorganization, then, subject to the limitations and qualifications described in the above referenced section of this information statement/prospectus, each U.S. Holder of Evtec share capital will generally recognize capital gain or loss, for U.S. federal income tax purposes, on the receipt of shares of Blackboxstocks common stock issued to such U.S. Holder in the Exchange. The U.S. federal income tax consequences to each U.S. Holder of Evtec share capital will depend on that stockholder’s particular circumstances. Each U.S. Holder of Evtec share capital should consult with his, her or its tax advisor for a full understanding of the tax consequences of the Exchange to that stockholder.

There can be no assurances that material additional adverse U.S. tax consequences will not result from the Exchange, and there can be no assurance that the Internal Revenue Service will agree with or not otherwise challenge Blackboxstocks’ position on the tax treatment of the Exchange or of internal restructuring transactions undertaken prior to, after, or in connection with the Exchange, which could result in higher U.S. federal tax costs for the Combined Company than currently anticipated.

Blackboxstocks has not applied for a ruling related to the Exchange and does not intend to do so. Any adverse tax consequences resulting from the Exchange or the operations of the Combined Company after the Exchange could adversely affect the Combined Company or its share price following the completion of the Exchange.

Blackboxstocks will allocate time and resources to effecting the Exchange and incur non-recurring costs related to the Exchange.

Blackboxstocks and its management have allocated and will continue to be required to allocate time and resources to effecting the completion of the Exchange and related and incidental activities. There is a risk that the challenges associated with managing these various initiatives as described in this information statement/prospectus may have a business impact and that consequently the underlying businesses will not perform in line with expectations. This could have an adverse effect on the reputation, business, financial condition or results of operations of the Combined Company.

In addition, Blackboxstocks expects to incur a number of non-recurring costs associated with the Exchange and Exchange, including legal fees, advisor fees, filing fees, mailing expenses, and financial printing expenses. There can be no assurance that the actual costs will not exceed those estimated and the actual completion of the Exchange may result in additional and unforeseen expenses. Many of these costs will be payable whether or not the Exchange are completed. While it is expected that benefits of the Exchange achieved by the Combined Company will offset these transaction costs over time, this net benefit may not be achieved in the short-term or at all, particularly if the Exchange are delayed or do not happen at all. These combined factors could adversely affect the business, results of operations or financial condition of the Combined Company.

The calculation of the number of Blackboxstocks shares to be issued may be adjusted if there is a change in Evtec share capital between the date of Exchange Agreement and Closing.

The calculation of the number of the Blackboxstocks shares to be issued in the Exchange may be adjusted in the event that Evtec raises in excess of $5 million of equity between June 30, 2023 and Closing pursuant to the exchange ratio in the Exchange Agreement. In addition, the number of shares to be issued by Blackboxstocks will increase if Blackboxstocks issues additional shares between the date of this information statement/prospectus and the Record Date. The parties may not be permitted to terminate the Exchange Agreement because of changes in the exchange ratio.

The Exchange may not be completed on the terms or timeline currently contemplated, or at all, as Blackboxstocks or Evtec may be unable to satisfy conditions or obtain the approvals required to complete the Exchange or such approvals may contain material restrictions or conditions.

Completion of the Exchange is subject to numerous conditions, as described in this information statement/prospectus, including the occurrence of, among other things, receipt of approvals. Although Blackboxstocks is diligently applying its efforts to take, or cause to be taken, all actions to do, or cause to be done, all things necessary, proper or advisable to obtain the requisite approvals, there can be no assurance that these conditions will be fulfilled or that the Exchange will be completed on the terms or timeline currently contemplated, or at all. Blackboxstocks has and will continue to expend time and resources and incur expenses related to the Exchange. Many of these expenses must be paid regardless of whether the Exchange are consummated. Governmental agencies may not approve the Exchange, may impose conditions to the approval of the Exchange or require changes to the terms of the Exchange. Any such conditions or changes could have the effect of delaying completion of the Exchange, imposing costs on or limiting the revenues of the Combined Company following the Exchange or otherwise reducing the anticipated benefits of the Exchange.

The unaudited pro forma financial information included in this information statement/prospectus is presented for illustrative purposes only and may not be indicative of the results of operations or financial condition of the Combined Company following the Exchange.

The unaudited pro forma financial information included in this information statement/prospectus is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have been achieved if the Exchange had been completed on the dates or for the periods presented, nor does it purport to project the results of operations or financial position of the Combined Company for any future period or as of any future date. In addition, the unaudited pro forma financial information included in this information statement/prospectus is based in part on certain assumptions regarding the Exchange. These assumptions may not prove to be accurate, and other factors may affect the Combined Company’s results of operations or financial condition following the Exchange. Further, the unaudited pro forma financial information does not reflect all of the costs that are expected to be incurred in connection with the Exchange. For more information, see the section entitled “Unaudited Pro Forma Condensed Combined Financial Statements”.

Completion of the Exchange may trigger certain provisions in agreements to which Blackboxstocks or its operating subsidiary is a party.

The completion of the Exchange may trigger certain change in control, consent, assignment or other provisions in agreements to which Blackboxstocks, its operating subsidiary, or Evtec is a party. In addition, the completion of the Exchange may trigger certain technical provisions in agreements to which Blackboxstocks, its operating subsidiary or Evtec is a party. If such parties are unable to assert that such provisions should not apply, or the parties are unable to comply with or negotiate waivers of those provisions, the counterparties may exercise their rights and remedies under the agreements, including potentially terminating such agreements or seeking monetary damages. Even if Blackboxstocks, its operating subsidiary or Evtec is able to negotiate waivers, the counterparties may require a fee for such waivers or seek to renegotiate the agreements on terms less favorable to the Combined Company.

Failure to complete the Exchange could adversely affect the market price of the Blackboxstocks common shares as well as its business, financial condition and results of operations.

If the Exchange is not completed for any reason, the price of the Blackboxstocks common shares may decline, or Blackboxstocks’ business, financial condition and results of operations may be impacted to the extent that the market price of Blackboxstocks’ common shares reflects positive market assumptions that the Exchange will be completed and the related expected benefits will be realized; based on significant expenses, such as legal, advisory and financial services which generally must be paid regardless of whether the Exchange is completed; based on potential disruption of the business of Blackboxstocks and distraction of its workforce and management team; and the requirement in the Exchange Agreement that, under certain limited circumstances, Blackboxstocks must pay Evtec a termination fee of $500,000, plus, all fees and expenses (up to $250,000) incurred by Evtec in connection with the authorization, preparation, negotiation, execution and performance of the Exchange Agreement and other contemplated transactions under the Exchange Agreement.

The Combined Company does not intend to pay dividends on the Combined Company common shares in the foreseeable future and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of the Combined Company common shares.

The Combined Company does not intend to declare and pay dividends on the Combined Company common shares for the foreseeable future. The Combined Company currently intends to invest future earnings, if any, to fund growth, to develop business, for working capital needs and for general corporate purposes. Therefore, you are not likely to receive any dividends on your Combined Company common shares for the foreseeable future and the success of an investment in the Combined Company common shares will depend upon any future appreciation in their value. There is no guarantee that the Combined Company common shares will appreciate in value or even maintain the value of shares received in connection with the Exchange. In addition, foreign, U.S. or state law or the agreements governing the Combined Company’s indebtedness may impose requirements that may restrict its ability to pay dividends to Combined Company shareholders.

The announcement and pendency of the Exchange could have an adverse effect on the stock price of the Blackboxstocks common shares as well as the business, financial condition, results of operations or business prospects of Blackboxstocks and Evtec.

The announcement and pendency of the Exchange could disrupt Blackboxstocks’ and Evtec’s businesses in negative ways. For example, customers and other third-party business partners of Blackboxstocks or Evtec may seek to terminate and/or renegotiate their relationships with Blackboxstocks or Evtec as a result of the Exchange, whether pursuant to the terms of their existing agreements with Blackboxstocks and/or Evtec or otherwise. In addition, current and prospective employees of Blackboxstocks or Evtec may experience uncertainty regarding their future roles with the Combined Company, which might adversely affect Blackboxstocks and Evtec’s ability to retain, recruit and motivate key personnel. Should they occur, any of these events could adversely affect the stock price of the Blackboxstocks common shares, or harm the financial condition, results of operations or business prospects of, Blackboxstocks or Evtec.

Some of Blackboxstocks’ directors and executive officers have interests in seeing the Exchange completed that may be different from, or in addition to, those of other Blackboxstocks shareholders.

Certain of Blackboxstocks’ directors and executive officers have interests in the Exchange that may differ from, or be in addition to, those of Blackboxstocks shareholders generally. These interests may present such executive officers and directors with actual or potential conflicts of interest. These interests include, but are not limited to, the continued service of certain directors of Blackboxstocks as directors of the Combined Company following the Exchange, the continued employment of certain current executive officers of Blackboxstocks by the Combined Company following the Exchange, and with respect to Mr. Kepler, potential receipt of Series A Convertible Preferred Stock of Blackbox.io Inc. as a result of the Exchange and the ownership of interests in Blackboxstocks. The members of the Blackboxstocks Board were aware of these interests and considered them, among others, in their approval and adoption of the Exchange Agreement and their recommendation that the holder of all of Blackboxstocks issued and outstanding shares of Series A Convertible Preferred Stock approve the Exchange. See “The Exchange—Interests of Blackboxstocks’ Directors and Officers in the Exchange” for further discussion of these matters.

Blackboxstocks and Evtec may have difficulty attracting, motivating and retaining executives and other employees in light of the Exchange.

Blackboxstocks and Evtec may have difficulty attracting, motivating and retaining executives and other employees in light of the Exchange. Uncertainty about the effect of the Exchange on the employees of Blackboxstocks and Evtec may have an adverse effect on Blackboxstocks and Evtec. This uncertainty may impair Blackboxstocks’ and Evtec’s ability to attract, retain and motivate personnel until the Exchange is completed. Employee retention may be particularly challenging during the pendency of the Exchange, as employees may feel uncertain about their future roles with Blackboxstocks or Evtec.

Blackboxstocks may waive one or more of the conditions to the consummation of the Exchange without pre-soliciting shareholder approval.

Blackboxstocks may determine to waive, in whole or in part, one or more of the conditions to its obligations to consummate the Exchange, to the extent permitted by applicable law. If Blackboxstocks waives the satisfaction of a material condition to the consummation of the Exchange, Blackboxstocks will evaluate the appropriate facts and circumstances at that time and re-solicit shareholder approvals if required to do so by applicable law or the rules of the Nasdaq. In some cases, if the Blackboxstocks board of directors determines that such waiver or its effect on the Blackboxstocks shareholders does not rise to the level of materiality that would require re-solicitation of shareholder approval pursuant to applicable law or the rules of the Nasdaq, Blackboxstocks would complete the Exchange without seeking further shareholder approval. Any determination whether to waive any condition to the Exchange or as to re-soliciting Blackboxstocks shareholder approval or amending this information statement/prospectus as a result of a waiver will be made by the Blackboxstocks Board at the time of such waiver based on the facts and circumstances as they exist at that time.

Litigation relating to the Exchange, if any, could result in an injunction preventing the completion of the Exchange and/or substantial costs to Blackboxstocks.

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into acquisition, merger or other business combination agreements like the Exchange Agreement. Even if such a lawsuit is without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on Blackboxstocks' liquidity and financial condition. Lawsuits that may be brought against Blackboxstocks or its directors could also seek, among other things, injunctive relief or other equitable relief, including a request to rescind parts of the Exchange Agreement already implemented and to otherwise enjoin the parties from consummating the Exchange. One of the conditions to the closing of the Exchange is that no injunction by any governmental entity having jurisdiction over Blackboxstocks or Evtec has been entered and continues to be in effect and no law has been adopted, in either case that prohibits the closing of the Exchange. Consequently, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Exchange, that injunction may delay or prevent the Exchange from being completed within the expected time frame or at all, which may adversely affect Blackboxstocks' business, financial position and results of operations.

There can be no assurance that any of the defendants will be successful in the outcome of any potential future lawsuits. The defense or settlement of any lawsuit or claim that remains unresolved at the time the Exchange is completed may adversely affect Blackboxstocks' business, financial condition, results of operations and cash flows.

The Exchange Ratio set forth in the Exchange Agreement is not adjustable based on the market price of Blackboxstocks common stock, so the Exchange consideration at the Closing may have a greater or lesser value than at the time the Exchange Agreement was signed. As described in the Exchange Agreement, the Exchange Ratio may be adjusted depending on the amount of gross proceeds received in the Pre-Closing Financing, among other factors, such that the Blackboxstocks securityholders and Evtec securityholders may own more or less of the combined company that presented in this information statement/prospectus.

At the Closing, each ordinary share of Evtec will be acquired by Blackboxstocks in exchange for a number of shares of Blackboxstocks common stock, $0.001 par value per share, based on the Exchange Ratio (defined below), rounded to the nearest whole share of Blackboxstocks common stock after aggregating all fractional shares issuable to each Seller. The Exchange Ratio may be adjusted to the extent that Evtec raises more than $5.0 million in the Pre-Closing Financing. Immediately following the Closing, assuming no Evtec ordinary shares are issued between the date of the Exchange Agreement and Closing, each Evtec ordinary share will be acquired by Blackboxstocks according to an Exchange Ratio of 301.8 shares of Blackboxstocks Common Stock for each Evtec Ordinary Share (which assumes that Evtec raises $5.0 million in the Pre-Closing Financing). The Exchange Ratio will be appropriately adjusted to ensure that following Closing, the aggregate number of shares issued in exchange for all Evtec ordinary shares equals 73.2% of the total issued and outstanding shares of the Combined Company common stock. The Exchange Ratio will be also appropriately adjusted to reflect fully the effect of any stock split, reverse split, stock dividend (including any dividend or distribution of securities convertible into shares in the Evtec ordinary share capital or Blackboxstocks common stock), reorganization, recapitalization, or other like change occurring prior to Closing. Each Evtec ordinary share in issue immediately prior to the Closing will be sold to Blackboxstocks by the Seller that owns such Evtec ordinary share in consideration for such number of duly authorized, validly issued, fully paid and non-assessable shares of Blackboxstocks common stock as is equal to the Exchange Ratio, rounded to the nearest whole share of Blackboxstocks common stock (after aggregating all fractional shares of Blackboxstocks common stock issuable to such Seller). The final Exchange Ratio may vary from the estimated Exchange Ratio presented in this information statement/prospectus such that the holders of Evtec share capital and Blackboxstocks stockholders may own more or less of the Combined Company than estimated in this information statement/prospectus.

Evtec may not obtain sufficient funding in the Pre-Closing Financing and may require additional financing.

Immediately following the Closing and assuming an Exchange Ratio of 301.8 shares of Blackboxstocks Common Stock for each Evtec Ordinary Share, the pre-Closing Blackboxstocks common stockholders and holders of Evtec’s share capital are expected to own 26.8% and 73.2%, respectively, of the outstanding common stock of the Combined Company. This percentage of ownership assumes that Evtec will raise $5.0 million in the Pre-Closing Financing. Evtec expects to raise $5.0 million in the Pre-Closing Financing, but it cannot guarantee that it will be able to do so. In the event that Evtec raises less than $5.0 million in the Pre-Closing Financing, the anticipated percentage of ownership of the Combined Company by holders of share capital of Evtec may be less than previously estimated. If Evtec raises less than $5.0 million in the Pre-Closing Financing, the Combined Company may need to raise additional capital sooner than currently expected to fund its planned operations.

Blackboxstocks stockholders may not receive any payment on the CVRs and the CVRs may otherwise expire valueless.

Pursuant to the CVR Agreement and the Exchange Agreement, holders of each share of Blackboxstocks common stock immediately prior to Closing, will receive a dividend of one contractual contingent value right entitling these holders to receive net proceeds received by Blackboxstocks from any transaction in which the Blackboxstocks or Blackbox.io Inc. grants, sells, licenses or otherwise transfers some or all of the rights to any and all of the assets, rights, and properties owned, used, or useable by Blackbox.io Inc. in connection with or related to the business as conducted by Blackbox.io Inc., or, under certain circumstances, distribution of securities of Blackbox.io Inc. held by Blackboxstocks, and all of the Blackboxstocks rights therein . The right of Blackboxstocks stockholders to receive any future payment on or to derive any value from the CVRs will be contingent solely upon the achievement of the events specified in the CVR Agreement within the time periods specified in the CVR Agreement. If the payment triggering events are not achieved for any reason within the time periods specified in the CVR Agreements, no payments will be made under the CVRs, and the CVRs will expire valueless.

The U.S. federal income tax treatment of CVRs is unclear.

The U.S. federal income tax treatment of the CVRs is subject to substantial uncertainty. There is no legal authority directly addressing the U.S. federal income tax treatment of the receipt of, and payments under, the CVRs, and there can be no assurance that the IRS would not assert, or that a court would not sustain, a position that could potentially result in adverse U.S. federal income tax consequences to holders of the CVRs.

In particular, as discussed in the section titled “Agreements Related to the Exchange—The Contingent Value Rights Agreement—U.S. Federal Income Tax Consequences of the CVRs to U.S. Holders,” Blackboxstocks intends to take the position that the fair market value of the CVRs cannot be reasonably ascertained on the date of the issuance of the CVRs and, accordingly, the issuance of the CVRs constitutes an “open transaction.” Accordingly, absent a change in law requiring otherwise, Blackboxstocks will not report the issuance of the CVRs as a current distribution of property with respect to its stock and will instead report each future cash payment (if any) on the CVRs as a distribution by Blackboxstocks for U.S. federal income tax purposes, with each such payment being reported as a dividend to the extent of Blackboxstocks current or accumulated earnings and profits in the year in which such payment is made. there is no authority directly addressing whether the issuance of contingent value rights with characteristics similar to the CVRs should be treated as a distribution of property with respect to Blackboxstocks’ common stock, a distribution of equity, a “debt instrument” or an “open transaction” for U.S. federal income tax purposes. Applicable U.S. Treasury regulations provide that “open transaction” treatment is only available in those “rare and extraordinary cases” involving contingent payment obligations in which the “fair market value of the obligation cannot reasonably be ascertained.” If the issuance of the CVRs is treated as an “open transaction,” a U.S. Holder (as defined in the above referenced section of this information statement/prospectus) would not generally recognize income in respect of the CVRs at the time such CVRs are issued and would take no tax basis in the CVRs. Future cash payments (if any) on the CVRs would be treated as a distribution and constitute a dividend to the extent of the U.S. Holder’s pro rata share of Blackboxstocks current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) in the taxable year of such payment, then as a non-taxable return of capital to the extent of the U.S. Holder’s basis in its Blackboxstocks common stock, and finally as capital gain from the sale or exchange of Blackboxstocks common stock with respect to any remaining payment.

Blackboxstocks intends to treat the issuance of CVRs as a separate transaction for U.S. federal income tax purposes. However, whether the issuance of CVRs should be treated as a separate transaction or as a single transaction is uncertain.

The lack of a public market for Evtec shares makes it difficult to evaluate the value of the Evtec share capital. The Evtec shareholders may receive shares of Blackboxstocks common stock in the Exchange that have a value that is less than, or greater than, the fair market value of the Evtec share capital.

The outstanding share capital of Evtec is privately held and is not traded in any public market. The lack of a public market makes it extremely difficult to determine the fair value of Evtec. Because the percentage of Blackboxstocks common stock to be issued to Evtec shareholders was determined based on negotiations between the parties, it is possible that the value of Blackboxstocks common stock to be received by Evtec shareholders will be less than the fair market value of Evtec, or Blackboxstocks may pay more than the aggregate fair market value for Evtec.

Risks relating to the Combined Company after completion of the Exchange

The effective tax rate of the Combined Company’s group may change in the future as a result of recent tax legislation.

U.S. tax legislation enacted in 2017 significantly changed the U.S. federal income taxation of U.S. corporations, including by reducing the U.S. corporate income tax rate, limiting interest deductions and certain deductions for executive compensation, permitting immediate expensing of certain capital expenditures, adopting elements of a territorial tax system, revising the rules governing net operating losses, and introducing new anti-base erosion provisions. The legislation remains unclear in many respects and continues to be subject to potential amendments and technical corrections. Treasury and the IRS have issued significant guidance since the legislation was enacted, interpreting the legislation and clarifying some of the uncertainties, and are continuing to issue new guidance. There are still significant aspects of the legislation for which further guidance is expected, and both the timing and contents of any such future guidance are uncertain.

Further, changes to the U.S. federal income tax laws are proposed regularly and there can be no assurance that, if enacted, any such changes would not have an adverse impact on the Combined Company. For example, President Biden has suggested the reversal or modification of some portions of the 2017 U.S. tax legislation and certain of these proposals, if enacted, could result in a higher U.S. corporate income tax rate than is currently in effect and thereby increase the effective tax rate of the Combined Company and its subsidiaries following the Exchange compared to current expectations. There can be no assurance that any such proposed changes will be introduced as legislation, or if they are introduced that they would be enacted, and if enacted what form they would take.

Moreover, the Combined Company and its subsidiaries could become subject to income tax in one or more countries, including the United States, as a result of activities performed by it (through its investment in Evtec), adverse developments or changes in law, contrary conclusions by the relevant tax authorities or other causes. The imposition of any of these income taxes could materially reduce the Combined Company’s after-tax returns.

In light of these factors, Blackboxstocks cannot assure you that the Combined Company’s effective income tax rate will not change in future periods, including as a result of and following the Exchange. Accordingly, if the Combined Company’s effective tax rate were to increase as a result of the Exchange, the Combined Company’s business could be adversely affected.

If completed, the expected benefits of the Exchange may not be realized.

There can be no assurance that all or any of the anticipated benefits of the Exchange will be achievable, particularly as the achievement of the benefits are in many important respects subject to factors that Blackboxstocks does not and cannot control, including the reaction of third parties with whom Blackboxstocks enters into contracts and do business and the reactions of investors.

After the Exchange, the Combined Company will have significantly more revenue, expenses, assets and employees than Blackboxstocks had prior to the Exchange. In the Exchange, the Combined Company will also be assuming certain liabilities of Evtec and taking on other obligations. The Combined Company may not successfully or cost-effectively integrate Evtec’s business and operations into Blackboxstocks’ existing business and operations. Even if the Combined Company is able to integrate the combined businesses and operations successfully, this integration may not result in the realization of the full benefits of the growth and other opportunities that Blackboxstocks currently expects from the Exchange within the anticipated time frame, or at all.

The integration of the Blackboxstocks and Evtec businesses may present significant challenges, and the Combined Company may not realize anticipated synergies and other benefits of the Exchange.

The combination of independent businesses is complex, costly and time-consuming, and combining the businesses of Blackboxstocks and Evtec may divert significant management attention and resources and disrupt the Combined Company’s business. The failure to meet the challenges involved in integrating the businesses and to realize the anticipated benefits of the transaction could cause an interruption of, or a loss of momentum in, the Combined Company’s business activities and could adversely affect its results of operations. The overall combination of Blackboxstocks and Evtec may also result in material unanticipated problems, expenses, liabilities, competitive responses, and loss of customer and other business relationships. The risks and difficulties of integration include, among others:

In addition, even if the operations of Blackboxstocks business and Evtec’s business are integrated successfully, the full benefits of the transaction may not be realized, including, among others, the synergies, cost savings or sales or growth opportunities that are expected. These benefits may not be achieved within the anticipated time frame or at all. Further, additional unanticipated costs may be incurred in the integration of the Blackboxstocks and Evtec businesses. All of these factors could cause dilution to the earnings per share of the Combined Company, decrease or delay any accretive effect of the Exchange, and negatively impact the price of Combined Company common shares following the Exchange.

The market price for the Combined Company common shares following the Closing of the Exchange may be affected by factors different from those that historically have affected or currently affect Blackboxstocks common shares.

Upon consummation of the Exchange, holders of Evtec ordinary shares shall receive Combined Company common shares. Blackboxstocks’ business differs from those of Evtec, and vice versa, and accordingly the results of operations of the Combined Company will be affected by some factors that are different from those currently affecting the results of operations of Blackboxstocks and those currently affecting the results of operations of Evtec. Similarly, certain factors and risks related to results of operations of the Combined Company may be exacerbated or more important than for Blackboxstocks’ business alone. The results of operations of the Combined Company may also be affected by factors different from those currently affecting Blackboxstocks and Evtec. For a discussion of the businesses of Blackboxstocks and of some important factors to consider in connection with the Company’s business, see the documents incorporated by reference in this information statement/prospectus and referred to under “Where You Can Find More Information & Incorporation by Reference.”

Sales of Combined Company common shares after the Exchange may negatively affect the market price of Combined Company common shares.

The holders of Evtec ordinary shares will receive Combined Company common shares in the Exchange. The Combined Company is required to file with the SEC a registration statement registering for resale the Combined Company common shares that result, in connection with the Exchange, from the issuance of the Blackboxstocks common shares Evtec holds today, and to conduct certain underwritten offerings upon the request of holders of registrable securities.

The market price of Combined Company common shares could decline as a result of sales of a large number of shares of Combined Company common shares in the market after the consummation of the Exchange or even the perception that these sales could occur.

If securities analysts do not publish research or reports about the Combined Company’s business or if they publish negative evaluations of the Combined Company common shares, the price of the Combined Company common shares could decline.

The trading market for the Combined Company’s common shares will rely, in part, on the research and reports that industry or financial analysts publish about the Combined Company or the Combined Company’s business. Equity research analysts may elect not to provide research coverage of the Combined Company’s common shares after the completion of the exchange, and such lack of research coverage may adversely affect the market price of the Combined Company common shares. In the event it does have equity research analyst coverage, the Combined Company will not have any control over the analysts or the content and opinions included in their reports. The price of the Combined Company’s common shares could decline if one or more equity research analysts downgrade its shares or issue other unfavorable commentary or research. If one or more equity research analysts ceases coverage of the Combined Company or fails to publish reports on it regularly, demand for the Combined Company common shares could decrease, which in turn could cause its stock price or trading volume to decline.

The Exchange will result in changes to the Combined Company board or directors that may affect the Combined Company’s business strategy and operations.

The composition of the Combined Company’s board of directors will change, as described in more detail in the section titled “The Exchange—Directors and Management of the Combined Company After the Exchange” of this information statement/prospectus. The newly comprised Combined Company board may affect business strategies and operating decisions with respect to the Combined Company that may have an adverse impact on the Combined Company’s business, financial condition and results of operations following the completion of the Exchange.

Following the completion of the Exchange, the Combined Company will be a “controlled company” under Nasdaq rules.

Following the completion of the Exchange, the Combined Company will remain a “controlled company” under Nasdaq rules. As a controlled company, the Combined Company will be exempt from certain Nasdaq corporate governance requirements, including those that would otherwise require the board of the Combined Company to have a majority of independent directors and require that the Combined Company establish a compensation committee comprised entirely of independent directors, or otherwise ensure that the compensation of its executive officers and nominees for directors are determined or recommended to the board of directors by the independent members of the board of directors. While Blackboxstocks does not expect the Combined Company to rely on any of these exemptions, the Combined Company will be entitled to do so for as long as it will be considered a “controlled company,” and to the extent the Combined Company relies on one or more of these exemptions, holders of the Combined Company capital stock will not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.

If the Combined Company fails to maintain an effective system of internal control over financial reporting, the Combined Company may not be able to accurately report its financial results or prevent fraud. As a result, stockholders could lose confidence in the Combined Company’s financial and other public reporting, which would harm its business and the trading price of the Combined Company common shares.

Effective internal control over financial reporting is necessary for the Combined Company to provide reliable financial reports and, together with adequate disclosure controls and procedures, is designed to prevent fraud. In connection with the preparation of Blackboxstocks’ consolidated financial statements as of December 31, 2023, Blackboxstocks did not obtain an audit opinion on the effectiveness of the Company’s internal control over financial reporting. Any failure to maintain effective internal control over financial reporting, to implement required new or improved controls, or difficulties encountered in their implementation, could cause the Combined Company to fail to meet its reporting obligations. In addition, any testing by the Combined Company, as and when required, conducted in connection with Section 404 of the Sarbanes-Oxley Act, or Section 404, or any subsequent testing by the Combined Company’s independent registered public accounting firm, as and when required, may reveal deficiencies in Combined Company‘s internal control over financial reporting that are deemed to be significant deficiencies or material weaknesses or that may require prospective or retroactive changes to its financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in the Combined Company’s reported financial information, which could have a negative effect on the trading price of the Combined Company common shares.

The business of the Combined Company will be highly dependent on the services of David Roberts, the Chief Executive Officer following Closing.

The Combined Company will depend on the continued services and performance of our key personnel, including David Roberts, the Chief Executive Officer following Closing. Although Evtec has entered into an employment agreement with Mr. Roberts, which requires a minimum of six (6) months’ written notice to terminate Mr. Roberts’ employment, the loss of key personnel, including Mr. Roberts, could disrupt our operations and have an adverse effect on our business.

The Combined Company, will, on a consolidated basis, assume and be responsible for all of Evtec’s liabilities following the closing of the Exchange, notwithstanding any breach of any representation or warranty of the Exchange Agreement.

While the Exchange Agreement contains certain representations and warranties about Evtec, the Exchange Agreement provides that all representations and warranties of the parties contained therein shall not survive the completion of the Exchange. Accordingly, there are no remedies available to the parties with respect to any breach of representations of the parties to the Exchange Agreement, except for any rights Blackboxstocks may have under applicable law to bring a claim relating to or arising from fraud with respect to any representation or warranty made in the Exchange Agreement.

As such, notwithstanding whether any Evtec liability is related to a breach of a representation or warranty in the Exchange Agreement, Evtec, and by virtue of the Exchange, the Combined Company, will bear full responsibility for any and all Evtec liabilities following the closing of the Exchange. To the extent any such Evtec liabilities are larger than anticipated, they could have an adverse impact on the business, results of operation and financial condition of the Combined Company.

Provisions in the Combined Company Articles of Incorporation and the Combined Company Bylaws could impact change in control transactions.

In addition to protections afforded under the Nevada Revised Statutes, the Combined Company Articles of Incorporation and Combined Company Bylaws will contain provisions that could have the effect of delaying or preventing changes in control or changes in management or the Combined Company Board. These provisions include:

Blackboxstocks shareholders might have difficulty enforcing civil liabilities against the Combined Company in the United States.

The enforcement by investors of civil liabilities under U.S. securities laws may be affected adversely by the fact some of the officers and directors will be residents of a foreign country. As a result, it may be difficult or impossible for Blackboxstocks shareholders to effect service of process within the United States upon most of the Combined Company’s subsidiaries and the Combined Company’s officers and directors, or to realize, against them, upon judgments of courts of the United States predicated upon civil liabilities under U.S. securities laws. In addition, Blackboxstocks shareholders in the U.S. should not assume that the courts of the U.S.: (a) would enforce judgments of U.S. courts obtained in actions against such persons predicated upon civil liabilities under U.S. securities laws; or (b) would enforce, in original actions, liabilities against such persons predicated upon civil liabilities under U.S. securities laws. In addition, awards of punitive damages in actions brought elsewhere may be unenforceable in the U.S.

The Combined Company will incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies.

The Combined Company will incur significant legal, accounting and other expenses that Evtec did not incur as a private company, including costs associated with public company reporting requirements. The Combined Company will also incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act, as well as rules implemented by the SEC and Nasdaq. These rules and regulations are expected to increase the Combined Company’s legal and financial compliance costs and to make some activities more time consuming and costly. For example, the Combined Company’s management team will consist of certain executive officers of Evtec prior to the Exchange. These executive officers and other personnel will need to devote substantial time regarding operations as a public company and compliance with applicable laws and regulations. These rules and regulations may also make it difficult and expensive for the Combined Company to obtain directors’ and officers’ liability insurance. As a result, it may be more difficult for the Combined Company to attract and retain qualified individuals to serve on the combined company’s board of directors or as executive officers of the Combined Company, which may adversely affect investor confidence in the Combined Company and could cause the Combined Company’s business or stock price to suffer.

Risks Relating to Blackboxstocks

You should read and consider the risk factors specific to Blackboxstocks’ business that will continue to affect the Combined Company after completion of the Exchange. These risks are described in the sections entitled “Item 1A. Risk Factors” in the Annual Report on Form 10-K of the Company for the year ended December 31, 2023, which is incorporated by reference herein. For further information, please read the section entitled “Where You Can Find More Information & Incorporation by Reference” of this information statement/prospectus.

Risks Relating to Evtec

Should JLR and its wider supply chain reduce demand for Evtec’s products or cease to require Evtec products, this could have a serious impact on the financial condition and viability of Evtec’s business and operations.

Evtec management believes that the risk of JLR and other intermediate suppliers to JLR ceasing to require or reducing demand for its products in the short to medium term is low given that:

Nevertheless, management have noted that in the event of any of the following events occurring, this could significantly impact the financial condition and operations of Evtec potentially meaning that its business is no longer financially viable:

The ability of Evtec to increase revenues is dependent upon demand by JLR for aluminium parts supplied by Evtec increasing because of JLR bringing into production new lines of electric and hybrid vehicles, which will be more aluminium intensive than its predecessors as part of lightweighting strategies. If the timeline for such model’s entering production is subject to delay or halted for any reason, or the volume of parts required by JLR differs from management’s current expectations, this could have a material adverse impact on the financial condition of the issuer.

In addition to their other existing contracts, Evtec has recently been awarded a supply agreement to supply aluminium parts to JLR for the production of certain aluminium components of electronic vehicle (“EV”) drivetrains that are to be used in the new EV lines being introduced by Jaguar. These new parts will start production in Q4 of 2024 and will reach peak volumes of 150,000 vehicle sets per annum by 2027.

More generally, JLR is aiming to reduce its greenhouse gas emissions by 54% across their entire supply chain by 2030 (compared to 2019 levels). JLR are also aiming to make available an electric version of each of their brand vehicles by 2026. Evtec’s operational output forecasts are majorly based on JLR’s EV strategy. However, if such timelines are pushed out, delayed or abandoned, this may have a material adverse effect on Evtec’s business, as demand from JLR for Evtec products will be delayed or reduced.

The demand for electric vehicles, more generally, could be hindered by several factors that are beyond the control of Evtec and which are difficult to predict, including:

If the above factors were to materialise, JLR may decide to reduce or delay their EV operations which would have a material adverse effect on Evtec’s business.

Evtec’s customers, particularly JLR, hold a dominant bargaining position.

While Evtec seeks to negotiate contracts or commercial arrangements with JLR, and other members of the JLR supply chain, on terms that it considers are most beneficial and favourable to Evtec, JLR is a large, international manufacturer and the majority of the contracts are a result of a competitive tender process where Evtec has little bargaining power to negotiate terms. Such counterparties will have in most cases, a dominant bargaining position, and Evtec will generally enter into contracts on the counterparty’s standard form of agreement and terms and conditions. The terms and conditions imposed upon Evtec might be unfavourable and Evtec may not be in a position to negotiate amendments to the terms. For example, Evtec does not have the ability to negotiate on price. As such, these contracts contain provisions which might ordinarily be regarded as onerous, but which Evtec management view as not unusual in these sorts of arrangements.

Reliance on UK domestic customers.

At present, Evtec is focused on serving the requirements of its primary customer JLR (as an OEM) in the United Kingdom. Evtec’s strategy is to focus on the aluminium automotive supply chain serving large luxury OEMs within Europe, either directly or through intermediate suppliers. At present, Evtec does not have plans to directly supply OEMs outside of the United Kingdom, other than through intermediate suppliers. In the event that Evtec were required to adapt and diversify to new territories, they may face increased competition from other OEM suppliers, there will be high barriers to entry and Evtec does not have a proven track record of operating outside of their current strategy or territory. Such factors are likely to prevent Evtec from being competitive in other territories. Should existing OEM customers seek to relocate their operations abroad, such customers may not retain their commercial relationship with Evtec, and those customers may seek to establish relationships with alternative domestic suppliers, as a means of minimizing costs and ensuring ‘just in time’ delivery. If such risks were to materialize, this could have a material adverse impact on the financial results and operations of Evtec.

Reliance on intermediate suppliers to OEMs

In addition to dealing directly with OEMs such as JLR, Evtec provides parts to intermediate suppliers to OEMs in Europe and Evtec derives a significant portion of its revenue from orders placed by intermediate suppliers. Management anticipates that these arrangements will continue and will form a significant part of its business going forward. Should any of those suppliers reduce its orders from Evtec (for any reason) this could have a serious adverse impact on Evtec’s reputation and its financial performance.

Dependence on Key Personnel

Evtec is reliant on the expertise and leadership of its current management team. Evtec will also need to attract and retain appropriately skilled personnel who will play a role in executing its business strategy.

In addition to their roles at Evtec, certain members of the management team hold separate, additional roles. Some of the management team may therefore be unable to devote their full time and attention to the business needs of Evtec, and they will need to divide their time and attention across separate roles. There is a risk that certain members of the management team may be unable to devote sufficient time to the needs of the business and would therefore be required to delegate responsibilities to other members of the management team/Evtec staff.

Part of the enlarged group strategy will be identifying future opportunities to undertake strategic acquisition(s) and investment(s) into suppliers currently operating within the Luxury, Performance and Electric Vehicle “EV” automotive supply chain. Evtec Management believes that Evtec will be a preferred partner of OEMs, such as JLR, in identifying potential acquisition targets because of their track-record and their collective experience in the automotive industry. Accordingly, Evtec will seek to put in place suitable incentives and arrangements aimed at attracting and retaining the services of key individuals.

If key members of the management team were to leave Evtec, there is a risk that such personnel would enter into competing business against Evtec. There would also be a risk that such personnel would seek to entice Evtec’s customers. While the employment contracts for senior management may contain certain restrictive covenants for the protection of Evtec’s business, there can be no guarantee that such covenants would be able to be fully enforced or that such employees would adhere to the terms.

If Evtec were to lose the services of key members of management or they were otherwise unable to fulfil their duties and responsibilities, this could have a negative impact on its customer relations, growth, and public perception. This could also hinder Evtec in executing its strategic objectives and growth strategy, and the ability to retain the services of its customers and to win new customers, could be adversely affected. While Evtec would seek to replace any of its senior management or executives, Evtec may face difficulty in recruiting other senior executives in the industry with specialist knowledge of the EV market and with a geographical connection to the West Midlands.

Evtec has to date been heavily dependent upon debt financing to satisfy its working capital requirements. Furthermore, Evtec’s near term strategy is to undertake significant capital investment into new technology, plant and machinery over the next 3 years, which will be dependent upon the availability of debt financing.

Evtec utilises a number of debt facilities for its continued operation.

The original acquisition of the trade and assets of Liberty Group was funded by investment provided in the form of debt financing, in particular, a £11.4 million facility provided by Praetura Commercial Finance in the form of an asset backed lending agreement.

Management notes that in the short to medium term, Evtec will need to utilize several facilities to be able to finance its operations. If management is unable to source suitable financing on commercially acceptable terms, there is a high possibility that Evtec will not be to successfully implement its strategy. Given the recent rise in UK interest rates, the ability to source commercially acceptable terms for debt financing may pose a greater challenge and therefore such a strategy may pose a higher degree of risk.

The implementation of Evtec’s future strategy involves Evtec making large up-front capital investments into infrastructure, machinery, technology and equipment as production will need to be increased from 130,000 parts per month to 200,000 parts per month. To meet such a production number, Evtec will need to invest approximately £40 million into sophisticated plant and machinery over the next five years. Such machinery will include, advanced die casting machines, machine tool centres and related measuring and testing equipment. Evtec intends such investment is to be financed by way of debt.

If Evtec is unable to source the necessary debt on commercially acceptable terms for such investments, it may adversely affect Evtec’s ability to fulfil its future order book. Failure by Evtec to deliver on its order book could damage the Company’s relationship with its key customer and other intermediate suppliers to OEMs. The anticipated orders (agreed in committed forward order schedules) are not binding purchase orders, and are subject to change in any financial year depending on demand for vehicles produced by the relevant OEM. Alternatively, if the future order book of Evtec does not meet forecasts, the value of these investments may not be fully realised.

Evtec has limited operating history, is currently loss-making and may continue to generate losses in the future, with no guarantees that it will become profitable.

For its fiscal year ended June 30, 2023, Evtec generated revenues of £25,564,613 and incurred a net loss of £4,872,030. For its fiscal year ended June 30, 2022, Evtec recorded revenues of £11,625,955 and a net loss of £4,539,542.

Evtec was incorporated on February 5, 2021 for the purpose of acquiring the business and certain assets of Liberty Aluminium Technologies Limited. Noting the short operational history of Evtec, investors have limited information to determine whether Evtec would be successful in achieving its strategic objectives. For Evtec to become a profitable business this will depend on several factors, including, but not limited to:

In the event that any of the factors outlined above no longer prove to be true or accurate, for example, Evtec loses JLR as a customer or demand for Evtec’s products fails to increase as forecasted, then this may ultimately have an adverse impact on the financial condition of Evtec and would likely mean that Evtec continues to sustain losses.

Noting the short operating history of Evtec and lack of demonstrated revenues, investors have limited information to determine whether Evtec would be successful in achieving its strategic objectives. In the event that Evtec is unable to achieve its strategic objectives, Evtec may continue to sustain losses which would have a material adverse effect on its financial condition.

Evtec is subject to default risk in respect of it secured debt obligations.

Evtec has a number of secured debt obligations in favor of its lenders. These obligations are secured over various assets of Evtec.

Evtec’s Asset Based Lending Agreement with Praetura Commercial Finance is secured by way of first-ranking debenture against Evtec. Evtec also has a facility agreement with HUK 125 Limited (Hilco). This facility is secured by way of a second-ranking debenture. Both these existing facilities, as well as Evtec’s plant hire agreements, have certain covenants and default provisions binding on Evtec. If Evtec fails to maintain such covenants or breaches certain terms of the facilities, the lenders may take certain enforcement action against Evtec for example:

While Evtec is not in default of any of its obligations or covenants, nor has any enforcement action been taken by any lender in the past, if Evtec were to default and/or fail to meet the necessary covenants, enforcement action may be taken and the financial and operational position of Evtec will be materially adversely affected.

Evtec has outstanding liabilities to HMRC.

Evtec has outstanding liabilities due to HM Revenue and Customs in the sum of £471,771 as of April 25, 2024. The liabilities to HMRC originate from unpaid Value Added Tax. Evtec has agreed a payment plan with HMRC, as part of which all the liabilities are intended to be repaid prior to December 31, 2024. Although management does not anticipate defaulting on the HMRC payment plan, if Evtec unexpectedly fails to pay such amounts within the timelines set out in the payment plan, there may be a risk that HMRC take action against Evtec to recover the outstanding amounts. If HMRC were to take such action, this would most likely result in costs in defending any actions, further fines and penalties as well as the potential for negative publicity for Evtec.

The proposed acquisitions which Evtec plans to undertake may be subject to competition and antitrust laws in certain jurisdictions.

Part of Evtec’s strategy for the Combined Company is to undertake strategic acquisitions of UK and US single-source suppliers to OEMs. Subsequent acquisitions may be subject to the relevant jurisdiction’s competition and antitrust laws and the directors will need to consider and take advice on if any such acquisition will need the necessary approval from the relevant authority.

If such a proposed acquisition is subject to a jurisdiction’s competition laws, Evtec (or the Combined Company) will need to, among other matters, seek approval from the relevant authority to proceed with the acquisition and there can be no guarantee that Evtec (or the Combined Company) will be successful in obtaining such approval. In the event that the approval is not given, Evtec may be subject to abortive transaction costs and may adversely affect Evtec’s future strategy.

Although management of Evtec will take all necessary local law legal advice when undertaking an acquisition, in the event that Evtec (or the Combined Company) inadvertently fails to obtain the necessary approval, there is a risk that such an acquisition may be unwound by the relevant authority and/or subject Evtec to regulatory fines and negative publicity.

Evtec is reliant on a number of intellectual property licenses in the operation of its business and there is a risk that such licenses may not be renewed, extended or acquired on terms acceptable to the company.

David Roberts, a director of Evtec, is the owner of certain intellectual property rights which are utilised by Evtec in their day-to-day business and operations.

On April 19, 2024, David Roberts and Evtec entered into an intellectual property licence agreement (IPLA) in which David Roberts will grant Evtec (and certain other related entities) a licence for the use of certain trademarks, domain names and social media accounts related to the Evtec brand for a term of 36 months from the date of the IPLA, subject to the conditions set out in the IPLA.

In the event that Evtec are unable to negotiate the purchase or extension of the intellectual property on commercially acceptable terms, Evtec may cease to benefit from use of the Evtec brand. Such cessation would have a negative adverse effect on Evtec’s business. Alternatively, Evtec may be required to pay higher licencing fees for the continued use of the intellectual property or pay a higher-than-expected sum to David Roberts to acquire the intellectual property under the IPLA as Evtec does not hold a dominant bargaining position in this respect.

Evtec’s plans to achieve growth will be to identify and undertake acquisitions and investments into undervalued suppliers to OEMs. There can be no guarantee that Evtec will be able to implement this strategy nor can it guarantee that any acquisition will be successful.

The future success of Evtec is dependent on successful implementation of Evtec’s future strategy to identify and execute complementary acquisitions of suppliers to OEMs, at favorable valuations.

Evtec cannot estimate how long it will take to identify suitable opportunities nor how long it will take to execute an acquisition once a target is identified. If Evtec fails to complete an acquisition, it may be left with unrecovered transaction costs and fees, in particular, costs associated with undertaking legal, financial and accounting due diligence. Management believes that in circumstances where an OEM is seeking to identify a suitable purchaser of a supplier, Evtec would stand a chance of being selected based upon the collective experience and track record of Evtec’s management. Nevertheless, Evtec may also face competition for the acquisition opportunities. Competitors may possess greater technical, financial, human and other resources than Evtec. Evtec cannot guarantee that they will be successful against such competitors.

Following an acquisition, Evtec will endeavor to generate value through applying financial and sectoral expertise to effect operational improvements and efficiencies. However, general economic and market conditions or other factors outside Evtec’s control could make the Evtec’s strategy difficult to implement.

If such opportunities cannot be sourced and executed by Evtec, this may have a material adverse effect on Evtec’s future operations and implementation of the strategy.

Evtec occupies the Coventry and Kidderminster sites on a leasehold basis.

Evtec currently operates from two sites located at Coventry and Kidderminster in the UK. Both sites are occupied by Evtec pursuant to a lease agreement with the respective landlords of those premises. Evtec’s lease of the premises at Coventry expires on June 31, 2032 and the Evtec’s lease at its premises at Kidderminster expires on March 8, 2027.

If the leases are extended, Evtec may be required to pay a higher rent than it is currently paying and/or may be subject to more onerous terms than currently the case. It is also the case that the landlords for the respective leases may seek to terminate the leases early, or the lease may be challenged by third parties (including superior leaseholders and/or freeholder owners), or the sites may be part of a wider regeneration project beyond the control of parties, meaning a lease is terminated prior to its full-term.

Under the leases of both the Coventry and Kidderminster site, Evtec does not have a statutory right of renewal under the Landlord and Tenant Act 1954 known as “security of tenure”. Under this statutory right, Evtec (as tenant) has a right to request a renewal to their lease on substantially the same terms subject to a review of the rent. The Landlord can only oppose the renewal of the lease on certain prescribed grounds. If the landlord is successful in their opposition, they will have to pay the tenant compensation upon the tenant vacating. If the tenant contests the Landlord’s request to vacate, the matter is referred to court.

There is therefore a heightened risk that Evtec may lose its interest in both the Coventry and Kidderminster sites as any extension of the lease will be based on commercial negotiation only.

If Evtec is unable to negotiate extensions to their current leases, or a lease is terminated early (due to default by Evtec or otherwise), Evtec may be required to source alternative sites for its operations. If Evtec is required to move their operations to a different location, Evtec may incur further costs in sourcing and establishing production at such sites and there may be delay/disruption to its operations. If Evtec is to vacate either site following the lease expiry or early termination, Evtec may be required to pay certain dilapidation costs under the lease agreements dependent on the condition of the respective property, and the associated costs could be significant.

The future success of Evtec is dependent on Evtec being able to effectively manage its cost base and maintain profitable margins.

Evtec uses a large amount of energy in its manufacturing process, and it is one of Evtec’s largest variable costs. Since the crisis in Ukraine, energy prices have risen sharply and remain subject to volatility. Such increases in the cost of energy have increased Evtec’s base costs of manufacturing its products. Evtec has attempted to mitigate these higher costs with additional support from its customers. If there is an unexpected rise in the cost of energy to Evtec, and Evtec is unable to absorb or pass on those costs in part to its customers, this could have a material adverse effect on its business and financial condition.

More generally, the success of Evtec is dependent on its ability to keep its cost base to a minimum and to enhance and maintain profitable margins. In addition to the cost of energy, various microeconomic and macroeconomic factors, outside the control of Evtec may increase Evtec’s cost base and negatively compress Evtec’s profit margins.

Evtec is required to maintain high standards of health and safety compliance.

Evtec has in place systems and processes in relation to the health and safety of its own activities. The objective of these systems and processes is the creation of a safe environment and all employees are provided with health and safety training and are audited for compliance through a number of inspections. Any infringement of health and safety law and any failure to comply with good practice including appropriate risk assessments by Evtec’s employees could result in liabilities including criminal sanctions, fines and penalties and civil liability claims attaching directly to Evtec, any or all of which could materially adversely impact Evtec.

Evtec may be subject to product liability claims.

While Evtec’s products comply in all material respects with all applicable laws and regulations, the actual or alleged sale of defective products by Evtec could result in product recalls or product liability claims, the settlement or outcome of which could have a material adverse effect on Evtec’s reputation, customer relationships, business and financial condition.

Even if an event causing a product recall proves to be unfounded or if a product liability claim against Evtec is unsuccessful or is not fully pursued, the negative publicity surrounding any assertion that the products sold by Evtec resulted in adverse consequences, or any product recall or allegation that the products sold by Evtec were defective, could adversely affect both Evtec’s reputation with existing and potential new customers and Evtec’s corporate and brand image. Any such event could, therefore, have a material adverse effect on Evtec’s reputation, business, financial condition, results of operations and prospects.

Evtec’s litigation risk.

While Evtec has taken and intends to continue to take such precautions as it regards appropriate to avoid or minimise the likelihood of any legal proceedings or claims, or any resulting financial loss to Evtec, management cannot preclude the possibility of litigation being brought against Evtec. There can also be no assurance that the other parties in any litigation proceedings will not be able to devote substantially greater financial resources than Evtec to any litigation proceedings or that Evtec will prevail in any such litigation. Any litigation, whether or not determined in Evtec’s favour or settled by Evtec, may be costly and may divert the efforts and attention of Evtec’s management and other personnel from normal business operations.

Evtec is subject to a number of environmental compliance obligations.

Evtec is engaged in the design and manufacturing of aluminium parts to the global automotive industry, and as such, Evtec is exposed to using, managing, storing and safely disposing of certain hazardous substances, wastes and other regulated materials. As such, Evtec is responsible for making sure that these materials are appropriately managed and failure to comply with these regulations could lead to fines and other penalties, as well as negative publicity which could damage Evtec’s reputation.

A number of Evtec employees are members of trade unions.

In the event that Evtec wish to change employment terms and conditions, Evtec could be required to do so in conjunction with the trade unions to which employees are members from time to time. Proposed changes to employment terms also carries the risk that such employees may take industrial action. Any industrial action would likely result in Evtec’s operations being materially disrupted or a shutdown in operations. Such disruption and/or shutdown would lead to difficulty in fulfilling customer orders and therefore poses the risk of damaging customer relationships. Furthermore, industrial action may also lead to reputational damage and negative publicity for Evtec.

Evtec’s aluminium supply chain is sourced solely from suppliers in the UK.

Evtec sources all of its aluminium from suppliers in the UK.

While Evtec management’s view the UK aluminium supply chain as reliable and the supply to date has not been materially disrupted, if the aluminium supply chain in the UK is interrupted or experiences adverse events, this could restrict or delay Evtec’s ability to fulfil its order book. Evtec would also have to expend time and resources in finding an alternative supply which may negatively impact Evtec’s financial condition and its relationship with customers.

Evtec is heavily reliant on the UK employment market for staffing its operations.

The manufacture of Evtec’s products is labour intensive and requires the requisite technical skills and expertise at various levels. The company will be particularly focused on recruiting employees based in the United Kingdom, and particularly in the West Midlands of United Kingdom. The success of its operations and growth strategy will therefore also depend on attracting and retaining skilled and qualified personnel, maintaining its high-quality standards. Ongoing employment competition for skilled individuals (particularly those with skilled knowledge of hybrid and electric vehicles), increased employment costs and the inability to hire or retain such skilled employees may have a material adverse effect on Evtec.

Evtec is subject to the risk of the outbreak of infectious diseases, in particular pandemics such as COVID-19, which can have a long-lasting and far-reaching impact on the global economy.

Pandemics, epidemics, outbreaks of infectious diseases or any other serious public health concerns, such as the outbreak of COVID-19, together with any measures aimed at mitigating a further outbreak, such as restrictions on travel, imposition of quarantines, a prolonged closure of workplaces, or curfews or other social distancing measures may have a material adverse effect on Evtec’s business, the global automotive market and global economy. The COVID-19 pandemic led to the prolonged shutdown and disruption to factories and manufacturers across the automotive supply chain in the UK. Evtec employees around 270 staff across its two sites. Given the labour-intensive activities involved in Evtec’s processes, the majority of these roles could not be undertaken remotely. If there was another outbreak of COVID-19, or other infectious disease, which led to any of the measures listed above being enforced, such as a prolonged shutdown of the Evtec factories, this would lead to a material reduction or complete cessation in Evtec’s manufacturing capacity.

Infrastructure both in the UK and globally is currently inadequate to meet the expected demand for electric vehicles.

With the recent increase of electric vehicles in the UK, there is skepticism around whether the infrastructure in the UK, mainly EV charging points, can be upgraded to match the increase in electric vehicles, both from the government and private sector. In the UK, the number of EV charging points has not kept up with the number of electric vehicles on the road. The relative slow development of infrastructure can be attributed to factors as up-front investment cost, the need for planning permission, as well as the need for cooperation between local authorities, charging point providers and the National Grid/local network operators.

The UK government has attempted to alleviate these issues by, among other initiatives, introducing new regulations to provide fairer accessibility to EV charging points for the public as well as the introduction of a £381 million Local EV Infrastructure fund to help local authorities to create new charging points across their respective areas. However, in the event that such infrastructure is not improved in line with the increase of electric vehicles both in the UK and abroad, customer preference for electric vehicles may decrease or fail to match forecasts. Such a decrease may negatively affect demand for Evtec’s products.

Global supply of raw materials for hybrid and electric vehicles currently insufficient to meet expected increase in demand.

Hybrid and electric vehicle manufacturers and the wider supply chain may struggle to source the raw materials required for the production of such vehicles, especially those raw materials that are required for batteries. The increase in demand for hybrid and electric vehicles has put increased pressure on the raw materials required for production. For example, European and UK manufacturers are competing to source raw materials such as lithium, cobalt and nickel, which are all key components of hybrid and electric vehicle batteries. As can be evidenced from the global semiconductor shortage that began in 2020, where new car manufacturing and sales saw a significant decrease, OEMs can be significantly affected by a shortage in a single key component used in the automotive manufacturing process.

In addition, many OEMs who are based in the UK and Europe do not have the benefit of direct access to raw materials. OEMs based in China may benefit from greater vertical integration of the mining and refinement of certain raw materials and would place them in a more favorable position than OEMs based in the UK and Europe. Similarly, the availability of raw materials to OEMs can also be affected by geo-political, social and humanitarian issues. For example, the Democratic Republic of Congo is one of the largest producers of cobalt and has been subject to international scrutiny regarding the conditions in which the cobalt is mined. OEMs may face political pressure to find alternative sources of raw materials which may lead to further demand and increased cost.

The rise in demand combined with the finite nature of these raw materials may create a supply bottleneck in the future. Certain OEMs have responded to this risk by investing into battery recycling and establishing relationships with raw material suppliers. However, if such shortages materialize and certain OEMs have failed to take the necessary precautions, such OEMs may be required to decrease production of hybrid and/or electric vehicles, increase prices or reduce costs in other areas. A reduction in production of hybrid and/or electric vehicles may lead to a reduced demand for Evtec’s products.

The success of Evtec’s business is intrinsically linked to the successful launch of automotive products by OEMs and in particular, the launch of electric vehicle ranges by JLR.

The success of Evtec is also reliant on the timely and successful launch of vehicles, and in particular, the electric vehicle range to be offered by JLR. OEMs may delay the release of certain vehicles due to several influences including market-demand, technology and regulation. In recent years, a number of OEMs have pushed back or delayed electric vehicle targets or launches. In 2024, OEMs such as Bentley and Aston Martin have announced delays to their respective target to release an electric vehicle.

Although Evtec management believes that the demand for electric vehicles will remain in line with Evtec’s expectations, in the event that such product launches are delayed or abandoned by OEMs, this may lead to a reduced or delayed demand for Evtec products and therefore would negatively impact Evtec’s business.

New automotive technology, such as Hydrogen Fuel Cell Vehicles (FCEVs) may overtake, or offer significant competition to electric vehicles as an alternative to traditional ICE vehicles.

A number of OEMs are investing into FCEVs. FCEVs are another alternative to traditional ICE vehicles. Although the concept of FCEVs is not new, the worldwide focus on the shift to net zero, investment and attention has again been drawn to FCEVs. In the UK, there are currently two FCEV models available to consumers and a number of OEMs have released, or plan to release, FCEVs. Such brands include Toyota, BMW and Hyundai. FCEVs can offer certain benefits over battery electric vehicles such as the ability to refuel faster and can offer a greater driving range. OEMs such as Renault have announced that the automotive industry will need to invest in both FCEVs and battery electric vehicles as European OEMs will struggle to compete with Chinese OEMs in respect of battery electric vehicles.

While Evtec management believes that FCEVs will not completely dominate the alternative car market, there is a possibility that in the future, FCEVs may take a larger market share than is currently forecast, especially if FCEVs become a more cost-effective option to OEMs and consumers. If this risk does materialize, this may negatively affect Evtec’s business as Evtec do not currently operate in the FCEV market.

Evtec and its customers operate in the automotive industry which is cyclical and is subject to significant fluctuations.

Given the variety of factors that can affect the automotive industry, the automotive industry is characterized by a level of cyclicality. Given that Evtec’s business is intrinsically tied to the automotive industry, this cyclicality can make it difficult for Evtec to accurately forecast future demand for its products and more generally, automotive vehicles. In addition, demand for automotive vehicles is usually subject to seasonal fluctuations. For example, the UK automotive industry sees the highest demand when bi-annual vehicle registrations take place in March and September and conversely sees demand lower fall in the winter months and over certain summer months due to holidays.

The risks related to the cyclical nature of the industry in which Evtec operates could have a material adverse effect on Evtec’ business, financial condition and results of operations.

The cost of hybrid and electric vehicles to consumers is perceived as higher compared to ICE vehicles and consumers have financially benefitted from government incentives in the past.

Hybrid and in particular electric vehicles typically carry a higher retail price than ICE vehicles. There is also a perceived high upfront cost to the consumer of purchasing the necessary home charging points combined with the recent high cost of energy, the purchase of electric vehicles by consumers may currently be perceived as a luxury, and not a like-for-like switch for ICE vehicles. If adverse economic conditions continue to exist for consumers, or there is a further economic downturn, the widespread adoption of electric vehicles by the public may be slower than expected. If such a downturn negatively affects the forecast adoption of hybrid and/or electric vehicles, this may have a negative adverse impact on demand for Evtec’s products.

In addition, the cost of electric vehicles in the UK has been subsidized by the UK government initiatives. Past initiatives included the Plug-in Car Grant (“PICG”) which offered a £5,000 discount (at the time of launch) to assist customers with the purchase of an electric vehicle. The PICG scheme came to an end in June 2022 and was seen as a success in increasing the number of electric vehicles registered in the UK. Other incentives to consumers include lower road tax, exemptions from congestion zone charges (such as London’s Ultra Low Emission Zone) and preferential parking in certain areas. If such initiatives are unexpectedly discontinued or reduced, demand for electric vehicles may fall which would have a negative adverse effect on Evtec’s business.

OEMs based in the UK, such as JLR, face competition from overseas OEMs, especially those from China, who are able to offer cheaper hybrid and electric vehicles to consumers.

Non-UK OEMs, especially those from China, are able to offer cheaper hybrid and electric vehicles to UK consumers. Chinese OEMs are more dominant in the value-end of the hybrid and electric vehicle market. Chinese OEMs are normally able to manufacture hybrid and electric vehicles on a more cost-effective basis as they can benefit from more efficient access to raw materials, cheaper labor and also economies of scale due to earlier investment into hybrid and electric vehicle manufacturing capabilities and technology. Chinese OEMs are now focusing on the hybrid and electric vehicle market in the UK after successfully launching in their own domestic market.

This in turn may put a downward price pressure on UK and European based OEMs as in the current economic climate, consumers may be seeking cheaper alternatives. For example, Nissan announced that they would seek to cut prices of their EV models by around 30% in a bid for price parity between their EV and ICE models as well as to remain competitive with Chinse OEMs.

Although Evtec management believes that there will be consumer demand at the luxury end of the hybrid and electric vehicle market, in the event that OEM customers of Evtec are forced to respond to such competition by reducing prices or lowering their cost base, this may have a negative adverse effect on Evtec’s business.

As a result of innovation in the automotive industry there is a possibility that new lighter, safer, and more environmentally friendly materials could be used in the production of automotive vehicles (such as composite materials) displacing aluminium.

Evtec is reliant on its aluminium products remaining a high demand by the automotive sector in the medium to long term for the success of its business. The automotive industry is a dynamic and fast-moving industry, where there is continuous technological advancement. The automotive industry is currently undergoing a major evolution, shifting from vehicles predominantly powered by an internal combustion engine to electric battery vehicle and hybrid models. This evolution has caused the automotive industry to reconsider a number of important aspects of the design of new vehicles. With the increase in hybrid and electric vehicles and given the additional weight of batteries, manufacturers have been pushed to find lightweight modifications in their vehicles to maximise the vehicle’s range and efficiency and to meet fuel economy and carbon emission targets.

Management does not believe that, by way of example, the development of composite materials are likely to have a material adverse impact on the business of Evtec, at least in the short to medium term. This is because it is currently low-volume, high-end manufacturers who are utilising composite materials for high-performance vehicles. The mid-to-high volume manufacturers, who are more sensitive to costs in their processes, have been slower to adopt composite materials such as carbon fibre, glass fibre-reinforced polymers, sheet moulding compounds, bulk moulding compounds and injection moulded thermoplastics. For example, McLaren Automotive recently invested £50 million into its Composites Technology Centre which will underpin its next generation of electric supercars. However, the Evtec’s management believe that given the high cost of composite materials, the large up-front investment required, and the automotive industry’s sensitivity to cost efficiency, the risk is of an imminent shift is low for mass produced automotive vehicles, such as those manufactured by JLR.

Evtec operates in the OEM industry which is a highly competitive environment.

Evtec operates in a highly competitive environment and industry. Evtec’s main competitors are other UK based suppliers and manufacturers of parts to OEMs. Evtec may also face competition from overseas suppliers that operate a lower cost operating model. Management believes that they would be unable to compete with such overseas suppliers purely on cost.

Although Management believes that Evtec will remain competitive due to the risk adverse nature of its customers, particularly JLR, there is a risk that Evtec’s performance could be impeded if its existing or future competitors adopt aggressive price competition and adapt or develop more efficient technology. Evtec may be required to respond to such competition by lowering prices, decreasing expenditure, investing in technology which may lead to decreased profits. Failure to respond to such competition may lead to a loss in custom and therefore revenue. Competitors in overseas markets, such as Asia, may benefit from much lower overhead and employment costs and may be more competitive than Evtec in terms of pricing.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The statements contained in this information statement/prospectus and in any document incorporated by reference herein that are not purely historical are forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. The information included in this information statement/prospectus in relation to Blackboxstocks has been provided by Blackboxstocks and its management team, and the information included in this information statement/prospectus in relation to Evtec has been provided by Evtec and its management. Forward-looking statements include statements relating to each of Blackboxstocks’ and Evtec’s management teams’ expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this information statement/prospectus and in any document incorporated by reference herein may include, for example, statements about:

The foregoing list is not intended to be exhaustive and there may be other key risks that are not listed above that are not presently known to the Company or that the Company currently deems immaterial. Should one or more of these or other risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may vary in material respects from those expressed or implied by the forward-looking statements contained in this information statement/prospectus. As a result of the foregoing, readers should not place undue reliance on the forward-looking statements contained in this information statement/prospectus because Blackboxstocks can give no assurance that they will prove to be correct.

The forward-looking statements contained in this information statement/prospectus and in any document incorporated by reference herein are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or 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, those factors described under the heading “Risk Factors” in this information statement/prospectus and Blackboxstocks’ Annual Report on Form 10-K for the year ended December 31, 2022 under Item 1A, which are incorporated herein by reference. 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. You should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this information statement/prospectus may adversely affect Blackboxstocks, Evtec, or, following the consummation of the Exchange, the Combined Company.

THE EXCHANGE

The following is a summary of the material terms of the Exchange. This summary does not purport to be complete and may not contain all of the information about the Exchange that is important to you. The summary of the material terms of the Exchange below and elsewhere in this information statement/prospectus is qualified in its entirety by reference to the Exchange Agreement, a copy of which is attached to the Current Report on Form 8-K filed with the SEC on December 18, 2023 and incorporated by reference herein. For further information, please read the section entitled “Where You Can Find More Information & Incorporation by Reference” of this information statement/prospectus. You are urged to read this information statement/prospectus, including the Exchange Agreement, carefully and in its entirety for a more complete understanding of the Exchange.

General

Subject to the terms of the Exchange Agreement, the Exchange will be consummated whereby each ordinary share of Evtec will be acquired by Blackboxstocks in exchange for a number of shares of Blackboxstocks common stock, $0.001 par value per share, based on the Exchange Ratio described below under “The Exchange Agreement––Exchange Consideration and Exchange Ratio.” The Combined Company is expected to operate under the name “Evtec Holdings, Inc.” with Blackbox.io Inc. and Evtec operating as wholly-owned subsidiaries of the Combined Company.

Background of the Exchange

In January of 2023, Blackboxstocks’ management began reviewing potential strategic options, including possible mergers, in order to spread the expense of operating as a public company across a larger company. Strategic options considered by management included reverse mergers. Evtec was introduced to Blackboxstocks as a possible candidate by a mutual contact of Blackboxstocks and Evtec.

On January 27, 2023 Blackboxstocks and Evtec held an introductory call which included Gust Kepler, Robert Winspear and David Roberts to discuss a potential transaction. The transaction discussed included the acquisition of Evtec Aluminium Limited and Evtec Automotive Limited which were in similar businesses and under common control.

On February 21, 2023 Blackboxstocks and Evtec executed a mutual non-disclosure agreement and commenced formal due diligence including access to Evtec’s virtual data room.

From March 20 through March 23, 2023, Gust Kepler and Robert Winspear traveled to Coventry England and met with David Roberts, Keith Stanton and other members of Evtec’s management as they toured the Evtec facilities including Evtec Aluminium Limited and Evtec Automotive Limited.

Blackboxstocks and Evtec executed a non-binding letter of intent for Blackboxstocks to acquire Evtec Aluminium Limited, Evtec Group Limited and Evtec Automotive Limited (collectively the “Evtec Companies") on March 29, 2023. Under the terms of the letter of intent, Blackboxstocks would issue shares to the holders of the Evtec Companies such that on completion of the merger, the pre-transaction stockholders of the Blackboxstocks and the Evtec Companies would retain an interest of 8.34% and 91.66% respectively.

On April 14, 2023 Blackboxstocks and Evtec executed a non-binding Amended Letter of Intent (the “LOI”).

On June 9, 2023, Blackboxstocks and Evtec Group Limited executed a securities exchange agreement (the “Securities Exchange Agreement”) whereby Blackboxstocks issued 2,400,000 shares of Series B Convertible Preferred Stock (the “Series B Stock”) in exchange for 4,086 preference shares of Evtec Group Limited. Subsequently, the preference shares of Evtec Group Limited were converted into 4,086 ordinary shares, which Blackboxstocks currently holds as of the date of this information statement/prospectus.

From September 18 through September 22, 2023 Robert Winspear traveled to Coventry and met with David Roberts, David G. Roberts, Keith Stanton and other members of Evtec’s finance and operations teams as well as Evtec’s auditor. Mr. Winspear and Mr. Roberts also met with two potential acquisition targets of Evtec and toured their facilities. During this trip, Mr. Winspear and Mr. Roberts verbally agreed to Mr. Winspear continuing as Chief Financial Officer of the combined company after the Closing.

On November 24, 2023, Blackboxstocks entered into a Binding Amendment to Amended Letter of Intent (the “LOI Amendment”) with the Evtec Companies, which amended the LOI dated April 14, 2023. The LOI Amendment increased Blackboxstocks’ agreed retained percentage in the Combined Company from 8.34% to 9.5%. In addition, as a condition to Blackboxstocks’ continued good faith negotiations regarding the proposed transaction, the Evtec Companies agreed to (i) pay Blackboxstocks aggregate extension fees totaling $400,000 which were guaranteed by a credit worthy affiliate of the Evtec Companies, (ii) provide extension loans of up to $400,000 to Blackboxstocks if the proposed transaction has not closed on or before April 1, 2024, (iii) pay Blackboxstocks amounts in cash equal to any documented legal fees and third-party expenses incurred or payable by Blackboxstocks in connection with the proposed transaction up to $175,000, including any such expenses incurred prior to the date of the LOI Amendment, (iv) forfeit and return 2,400,000 shares of the Series B Stock acquired by Evtec Group Limited under the terms of the Securities Exchange Agreement, and (v) permit Blackboxstocks to convert each of the 4,086 preferred shares of Evtec Group Limited issued to Blackboxstocks pursuant to the Securities Exchange Agreement into one ordinary share of Evtec Group Limited. Blackboxstocks required the financial consideration in the LOI Amendment in order to offset the costs it had incurred and could incur as a result of delays in closing the merger which it attributed to Evtec and a lender for Evtec Automotive Limited.

On December 12, 2023, Blackboxstocks entered into the Exchange Agreement with Evtec and the Sellers. The Exchange Agreement excluded Evtec Group Limited and its operating subsidiary Evtec Automotive Limited because, despite our endeavors, Blackboxstocks could not agree to modifications to the loan and security arrangements that were required by the lenders of Evtec Group Limited at that time. While negotiations in this regard continue, Blackboxstocks agreed to move forward with the Exchange solely with Evtec Aluminium Limited and not wait any longer for agreement to be reached with the lender(s). As a result of modifying the transaction to acquire only Evtec Aluminium Limited, the ownership interest of Blackboxstocks stockholders in the Combined Company increased to 26.8% in order to give its stockholders the same relative value and adjusting for the exclusion of Evtec Automotive Limited from the transaction.

Part of the strategy for the Combined Company is to undertake strategic and complementary acquisitions of UK and US single-source suppliers to OEMs. Therefore, the intention of the directors of the Combined Company is to pursue the acquisition of the remaining stock of Evtec Group Limited resulting in the Combined Company owning the entire issued share capital of Evtec Group Limited. This acquisition, if consummated, would increase Evtec’s current pool of customers to include other prominent OEMs, including Ford, Bentley, Aston Martin and McLaren. However, the parties cannot guarantee that this acquisition will take place as it remains under negotiation and subject to agreement of commercial terms with the vendors, agreement with lenders regarding changes to the loan and security arrangements that are currently in place, and potential approvals such as by the board, shareholders and regulatory authorities.

Blackboxstocks Board of Director’s Reasons for the Exchange

At its meeting on December 12, 2023, after careful consideration, the Blackboxstocks board of directors unanimously (i) determined that the Exchange Agreement and related Transactions are fair to, and in the best interests of, Blackboxstocks and its shareholders, (ii) approved, adopted, and declared advisable the Exchange Agreement and Contemplated, and (iii) recommended that Blackboxstocks shareholders vote to approve the Exchange Agreement and related Transactions.

In reaching its determination, the Blackboxstocks board of directors consulted with and received the advice of Blackboxstocks’ management and its legal advisors and, at its December 11, 2023 meeting and at other meetings at which it considered the Exchange, carefully considered a number of factors that the Blackboxstocks board of directors viewed in its decision, including the following factors:

The Blackboxstocks Board also considered a number of uncertainties and risks in its deliberations concerning the Exchange contemplated by the Exchange Agreement, including the following:

The foregoing discussion of the factors considered by the Blackboxstocks board of directors is not intended to be exhaustive and is not provided in any specific order or ranking. In view of the wide variety of factors considered in connection with its evaluation of the Exchange and the Transactions, and the complexity of these matters, the Blackboxstocks board of directors did not consider it practicable to, and did not attempt to, qualify, rank or otherwise assign any relative or specific weights or values to the factors considered, and individual directors may have held varied views of the relative importance of the factors considered and given different weights or values to different factors. The Blackboxstocks board of directors viewed its position and recommendation as being based on an overall review of the totality of the information available to it, including discussions with Blackboxstocks’ management and outside financial and legal advisors, and determined that, in the aggregate, the potential benefits considered outweighed the potential risks or possible negative consequences of approving the Exchange and related Transactions.

The explanation and reasoning of the Blackboxstocks board of directors and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”

Evtec Board of Director’s Reasons for the Exchange

On December 12, 2023, after careful consideration, Evtec’s sole Director (i) determined that the Exchange Agreement and Contemplated Transactions are fair to, and in the best interests of, Evtec and its shareholders, (ii) approved, adopted, and declared advisable the Exchange Agreement and other transactions contemplated by the Exchange Agreement, and (iii) recommended that Evtec shareholders also approve and sign the Exchange Agreement (and such other documents as required to complete the Contemplated Transactions).

In reaching its determination, Evtec’s sole Director, David Roberts, consulted with and received the advice of Evtec’s management and its outside financial and legal advisors and carefully considered a number of factors in his decision, including the following factors:

The Board of Directors also considered a number of uncertainties and risks in its deliberations concerning the Exchange contemplated by the Exchange Agreement, including the following:

The foregoing discussion of the factors considered by the Evtec board of directors is not intended to be exhaustive and is not provided in any specific order or ranking. In view of the wide variety of factors considered in connection with its evaluation of the Exchange and related Transactions, and the complexity of these matters, the Evtec board of directors did not consider it practicable to, and did not attempt to, qualify, rank or otherwise assign any relative or specific weights or values to the factors considered, and individual directors may have held varied views of the relative importance of the factors considered and given different weights or values to different factors. The Evtec board of directors viewed its position and recommendation as being based on an overall review of the totality of the information available to it, including discussions with Evtec’s management and outside financial and legal advisors, and determined that, in the aggregate, the potential benefits considered outweighed the potential risks or possible negative consequences of approving the Exchange and related Transactions.

The explanation and reasoning of the Evtec board of directors and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”

Interests of Blackboxstocks’ Directors and Executive Officers in the Exchange

In connection with the consummation of the Exchange, Blackboxstocks’ directors and executive officers have interests in the Exchange that may be different from, or in addition to, those of the stockholders of Blackboxstocks generally. These interests are described in more detail below. The Blackboxstocks board of directors was aware of these interests and considered them, among other things, in reaching its decision to approve the Exchange Agreement, the Exchange and related Transactions.

In connection with the Exchange Agreement, Blackboxstocks will enter into an option agreement with Gust Kepler, Chairman, Chief Executive Officer and President of Blackboxstocks (the “Option Agreement”). Under the Option Agreement, the Company has the right, but not the obligation, to cause Mr. Kepler to sell, and Mr. Kepler has the right, but not the obligation, to cause the Company to purchase all of all of the Company’s Series A Convertible Preferred Stock. In the event that an option right is exercised under the Option Agreement, the purchase price per Series A Convertible Preferred Stock of Blackboxstocks shall be equal to one issued and outstanding share of Series A Convertible Preferred Stock of Blackbox.io Inc., a Delaware corporation and wholly-owned subsidiary of the Company. Furthermore, if the Option Agreement is exercised, the shares of Series A Convertible Preferred Stock of Blackbox.io Inc. Mr. Kepler would receive, each share of which is entitled to 100 votes on all stockholder matters, would vest him with direct voting control over Blackbox.io Inc.

In addition, following the consummation of the Exchange, Mr. Kepler will cease to be engaged directly by the Combined Company and will be appointed as Chief Executive Officer of the Combined Company’s wholly owned subsidiary, Blackbox.io Inc., and Robert Winspear, a current Blackboxstocks director, will continue to serve as a director and Chief Financial Officer of the Combined Company.

Interests of Evtec’s Directors and Executive Officers in the Exchange

In connection with the consummation of the Exchange, the directors and executive officers have an interest in the transaction by virtue of individual holding of ordinary shares in Evtec (and shareholding of family members’) as set out below, which will be exchanged for Blackboxstocks common stock in the Exchange:

(1) Consists of: (i) 2,818 shares owned by David Roberts in his own name, and (ii) 2,552 shares owned by Mr. Roberts’ wife, Jayne Roberts.

(2) Consists of 430 shares held via George 4 Foundation Inc. of which she is a director.

Furthermore, the following directors and executive officers of Evtec will be appointed to the board of directors of the Combined Company:

Directors and Management of the Combined Company After the Exchange

Following the consummation of the Exchange, the board of directors of the Combined Company will consist of six members, comprised of David Roberts, Robert Winspear, Steven Norris, Julia Steinbrenner, Steve Ilott and Anil Khurana, with Steven Norris to be appointed Chairman of the Combined Company’s board of directors. Effective as of the Closing of the Exchange, the Combined Company’s executive officers are expected to include David Roberts, who will serve as Chief Executive Officer and President, Robert Winspear who will serve as Chief Financial Officer and Secretary, Keith Stanton, who will serve as Group Managing Director, David G. Roberts, who will serve as Group Finance Director and Gust Kepler who will serve as Chief Executive Officer of Blackbox.io, Inc.

Regulatory Approvals Required to Complete the Exchange

In the United States, Blackboxstocks must comply with applicable federal and state securities laws and the rules and regulations of Nasdaq (the “Nasdaq Listing Rules”) in connection with the issuance of shares of Blackboxstocks common stock and the filing of this information statement/prospectus.

Listing of Blackboxstocks Common Stock

It is a condition to completion of the Exchange that the Blackboxstocks common stock issuable in connection with the Exchange be approved for listing on Nasdaq, subject to consummation of the Exchange and official notice of issuance. No delisting or suspension in trading of Blackboxstocks common stock on Nasdaq shall have occurred and be continuing upon the consummation of the Exchange.

Blackboxstocks will use commercially reasonable efforts to cause the shares of Blackboxstocks common stock to be listed on Nasdaq. In furtherance thereof, Blackboxstocks intends to file an initial listing application with the Nasdaq Capital Market pursuant to Nasdaq’s rules for companies conducting a business combination that results in a change of control. Upon completion of the Exchange, as noted above Blackboxstocks will be renamed “Evtec Holdings, Inc.” and expects its common stock to trade on the Nasdaq Capital Market under the symbol “EVHI.”

Anticipated Accounting Treatment

Blackboxstocks prepares its financial statements in accordance with U.S. GAAP. The Exchange will be accounted for as a reverse acquisition using the acquisition method of accounting, pursuant to FASB Topic 805-10, Business Combinations, which provides guidance for the determination of the accounting acquirer for this transaction. In connection with the Exchange, Evtec is the accounting acquirer and Blackboxstocks is the accounting acquiree. In identifying Evtec as the acquiring entity for accounting purposes, Blackboxstocks and Evtec took into account a number of factors as of the date of this Form S-4, including the relative voting rights and the intended corporate governance structure of the Combined Company. Evtec is considered the accounting acquirer since it will control the board of directors of the Combined Company and its shareholders will have an ownership interest in the Combined Company’s common stock of approximately 73.2%. Although Gust Kepler will possess voting control of the Combined Company as a result of his continued ownership of 100% of the Class A Preferred Stock, the Option Agreement would give the Combined Company the ability to redeem such shares. In addition to the voting and governance aspects of the transaction, Blackboxstocks considered the relative size of Evtec and Blackboxstocks and the fact that they are in very different industries as additional factors supporting Evtec as the accounting acquiror. Under the acquisition method of accounting, the assets and liabilities of Blackboxstocks, as the accounting acquiree, will be recorded at their respective fair value as of the date the Exchange is completed.

No Appraisal Rights and Dissenters’ Rights

No dissenters’ or appraisal rights will be available with respect to the Exchange, Exchange Agreement or related Transactions.

THE EXCHANGE AGREEMENT

The following is a summary of the material terms of the Exchange Agreement. This summary does not purport to be complete and may not contain all of the information about the Exchange Agreement that is important to you. The summary of the material terms of the Exchange Agreement below and elsewhere in this information statement/prospectus is qualified in its entirety by reference to the Exchange Agreement, a copy of which is attached to the Current Report on Form 8-K filed with the SEC on December 18, 2023 and incorporated by reference herein. For further information, please read the section entitled “Where You Can Find More Information & Incorporation by Reference” of this information statement/prospectus. You are urged to read the Exchange Agreement carefully and in its entirety because it, and not the description below or elsewhere in this information statement/prospectus, is the legal document that governs the Exchange.

The Exchange Agreement has been incorporated by reference in this information statement/prospectus to provide you with information regarding the terms of the Exchange. It is not intended to provide you with any other factual or financial information about Blackboxstocks or Evtec or any of their respective affiliates or businesses. Information about Blackboxstocks and Evtec can be found elsewhere in this information statement/prospectus and in the other filings Blackboxstocks has made with the SEC, which are available without charge at http://www.sec.gov. See “Where You Can Find More Information & Incorporation by Reference.”

The Exchange

The Exchange Agreement provides for Blackboxstocks acquiring the entire issued and outstanding share capital of Evtec (including all shares issuable in connection with the Pre-Closing Financing). The Combined Company will operate under the name “Evtec Holdings, Inc.” with Blackbox.io Inc. and Evtec operating as wholly-owned subsidiaries of the Combined Company.

Closing; Effective Time of the Exchange

The Closing will occur no later than two business days after the last of the conditions as set forth in the Exchange Agreement has been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of each such condition), or at such other time as Blackboxstocks and Evtec agree. Blackboxstocks and Evtec anticipate that the Closing will occur in the third quarter of 2024. However, because the Exchange is subject to a number of conditions, neither Blackboxstocks nor Evtec can predict exactly when the Closing will occur or if it will occur at all.

Exchange Consideration and Exchange Ratio

At the Closing, each ordinary share of Evtec will be acquired by Blackboxstocks in exchange for a number of shares of Blackboxstocks common stock, $0.001 par value per share, based on the Exchange Ratio (defined below), rounded to the nearest whole share of Blackboxstocks common stock after aggregating all fractional shares issuable to each Seller. The Exchange Ratio may be adjusted to the extent that Evtec raises more than $5.0 million in the Pre-Closing Financing. Immediately following the Closing, Evtec ordinary shares will be acquired by Blackboxstocks according to an Exchange Ratio of 301.8 shares of Blackboxstocks Common Stock for each Evtec Ordinary Share (which assumes that Evtec raises $5.0 million in the Pre-Closing Financing). The Exchange Ratio will be appropriately adjusted to reflect fully the effect of any stock split, reverse split, stock dividend (including any dividend or distribution of securities convertible into shares in the Evtec ordinary share capital or Blackboxstocks common stock), reorganization, recapitalization, or other like change occurring prior to Closing. Each Evtec ordinary share in issue immediately prior to the Closing will be sold to Blackboxstocks by the Seller that owns such Evtec ordinary share in consideration for such number of duly authorized, validly issued, fully paid and non-assessable shares of Blackboxstocks common stock as is equal to the Exchange Ratio, rounded to the nearest whole share of Blackboxstocks common stock (after aggregating all fractional shares of Blackboxstocks common stock issuable to such Seller). No fractional shares of Blackboxstocks will be issued in the Exchange.

The Blackboxstocks pre-Closing common stockholders and holders of Evtec’s share capital (including all Evtec shares issued in connection with the Pre-Closing Financing) are expected to own approximately 26.8% and 73.2%, respectively, of the outstanding common stock of the Combined Company (which assumes Evtec raises $5.0 million in Pre-Closing Financing).

Contingent Value Rights

Immediately prior to Closing, each holder of Blackboxstocks common stock of record will be entitled to one contractual contingent value right (a “CVR”) issued by Blackboxstocks for each share of Blackboxstocks common stock held by such holder, subject to and in accordance with the terms and conditions of the Contingent Value Rights Agreement (the “CVR Agreement”), a copy of the form of which is attached to the Current Report on Form 8-K filed with the SEC on December 18, 2023 and incorporated by reference herein. For further information, please read the section entitled “Where You Can Find More Information & Incorporation by Reference” of this information statement/prospectus. The Blackboxstocks board of directors will pay the dividend of one CVR for each share of Blackboxstocks common stock immediately prior to the consummation of the Exchange, conditioned upon the satisfaction or waiver of all conditions to the Exchange and the occurrence of the time that is immediately prior to the consummation of the Exchange.

Exchange Procedures

Exchange

At or prior to the Closing, Blackboxstocks will issue and cause to be deposited with its transfer agent (the “Exchange Agent”), for the benefit of the Sellers, uncertificated book-entries representing such aggregate number of shares of Blackboxstocks common stock issued pursuant to the calculation of acquisition consideration using the Exchange Ratio.

At or prior to the Closing, each Seller, as a condition to receiving the applicable acquisition consideration, will deliver to the Exchange Agent (i) a duly executed stock transfer form in favor of Blackboxstocks in customary form approved by Blackboxstocks in respect of the Evtec ordinary shares held by such Seller, and (ii) in respect of all Evtec ordinary shares held by such Seller, certificates evidencing title to such shares or an indemnity for any lost certificates made in favor of Evtec and Blackboxstocks in a form reasonably acceptable to Blackboxstocks.

As promptly as practicable after receipt by the Exchange Agent from a Seller of the aforementioned stock transfer form and Evtec ordinary share certificates, together with such other customary documents as may reasonably be required by the Exchange Agent or Blackboxstocks, such Seller shall receive, from the Exchange Agent, in exchange therefor, a number of whole shares of Blackboxstocks common stock represented, at such Seller’s election, by book entry or certificated shares equal to the number of whole shares of Blackboxstocks common stock that such Seller has the right to receive pursuant to the calculation of acquisition consideration using the Exchange Ratio. If any shares of Blackboxstocks common stock are to be issued in a name other than that in which the Evtec ordinary share certificate surrendered in exchange therefor is registered, it will be a condition of the issuance thereof (i) that the Evtec ordinary share certificate so surrendered will be in proper form for transfer and (ii) that the party requesting such exchange will have paid to Blackboxstocks, or any other party designated by it, any transfer or other taxes required by reason of the issuance of the shares of Blackboxstocks common stock in any name other than that of the registered holder of the Evtec ordinary share certificate surrendered, or established to the satisfaction of Blackboxstocks or any agent designated by it that such tax has been paid or is not payable.

Withholding Rights

Each of the Exchange Agent, Blackboxstocks, and Evtec will be entitled to deduct and withhold from any consideration payable or otherwise deliverable pursuant to the Exchange Agreement any amounts that are required to be deducted or withheld from that consideration under the Internal Revenue Code, Treasury Regulations promulgated under the Internal Revenue Code or any provisions of applicable state, local or foreign tax law. To the extent any amounts are withheld in accordance with the provisions of the Exchange Agreement and are paid over to the applicable governmental body, such amounts will be treated for all purposes under this Agreement as having been paid to the person to whom such amounts would otherwise have been paid.

Power of Attorney

With effect from Closing, each Seller will appoint Blackboxstocks to be its lawful agent, proxy and attorney and grant Blackboxstocks a power-of-attorney with full power to exercise all rights pertaining to any Evtec ordinary shares registered in the name of such Seller as Blackboxstocks in its absolute discretion sees fit. The power of attorney granted by each Seller shall expire on the date on which Blackboxstocks is entered into Evtec register of members as the holder of the Evtec ordinary shares that were registered in the name of such seller at the Closing.

Organizational Documents

At the effective time of the Exchange, the articles of incorporation and the bylaws of Blackboxstocks, as in effect immediately prior to Closing, will be the articles of incorporation and the bylaws of the Combined Company, until thereafter amended in accordance with applicable law and the applicable provisions of such bylaws.

Representations and Warranties

The Exchange Agreement contains representations and warranties of each of the parties to the Exchange Agreement to the other parties. The assertions embodied in those representations and warranties were made solely for purposes of the Exchange Agreement and may be subject to important confidential disclosures and qualifications and limitations agreed to by the parties in connection with negotiating the terms of the Exchange Agreement. Accordingly, Blackboxstocks stockholders should not rely on representations and warranties as characterizations of the actual state of facts or circumstances, and they should bear in mind that the representations and warranties were made solely for the benefit of the parties to the Exchange Agreement, were negotiated for purposes of allocating contractual risk among the parties to the Exchange Agreement rather than to establish matters as facts, and may be subject to contractual standards of materiality different from those generally applicable to equity holders. Moreover, information concerning the subject matter of such representations and warranties may change after the date of the Exchange Agreement, which subsequent information may or may not be reflected in public disclosures by Blackboxstocks. This description of the representations and warranties is included to provide Blackboxstocks stockholders with information regarding the terms of the Exchange Agreement.

In the Exchange Agreement, Evtec made representations and warranties relating to, among other things:

In the Exchange Agreement, Blackboxstocks made representations and warranties relating to, among other things:

In the Exchange Agreement, the Sellers made representations and warranties relating to, among other things:

Material Adverse Effect

Some of the representations of the parties to the Exchange Agreement are qualified by a “material adverse effect” standard (that is, they will not be deemed to be untrue or incorrect unless their failure to be true and correct, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect). For the purposes of the Exchange Agreement, “material adverse effect” with respect to Blackboxstocks means any effect that, considered together with all other effects, has, or is reasonably expected to have, a material adverse effect on: (a) the business, financial condition, operations or results of operations of Blackboxstocks taken as a whole or (b) the ability of Blackboxstocks to consummate the related Transactions or to perform any of its covenants or obligations under the Exchange Agreement; provided, however, that for purposes of clause (a), in no event shall any of the following, alone or in combination, be deemed to constitute, nor shall any of the following be taken into account in determining whether a Blackboxstocks material adverse effect has occurred:

For the purposes of the Exchange Agreement, “material adverse effect” with respect to Evtec means any effect that, considered together with all other effects, has, or is reasonably expected to have, a material adverse effect on: (a) the business, financial condition, operations or results of operations of Evtec companies taken as a whole or (b) the ability of Evtec to consummate the Exchange and related Transactions or to perform any of its covenants or obligations under the Exchange Agreement; provided, however, that for purposes of clause (a), in no event shall any of the following, alone or in combination, be deemed to constitute, nor shall any of the following be taken into account in determining whether a Evtec material adverse effect has occurred:

Conduct of Business by Blackboxstocks Pending the Closing

Blackboxstocks and its subsidiaries have agreed that, during the period from the date of the Exchange Agreement and continuing until the earlier of the termination of the Exchange Agreement pursuant to its terms or the Closing (the “Pre-Closing Period”), Blackboxstocks shall, and shall cause its subsidiaries to, conduct their respective businesses and operations (a) in the ordinary course of business consistent with past practice; and (b) in compliance in all material respects with all applicable legal requirements and requirements of all contracts that constitute Blackboxstocks contracts. The foregoing is qualified (i) as set for in the Blackboxstocks disclosure schedule, (ii) as expressly contemplated by the Exchange Agreement, (iii) as required by applicable legal requirements, or (iv) if Evtec shall otherwise consent in writing.

In addition, without limiting the foregoing, other than as expressly contemplated by the Exchange Agreement, or with the prior written consent of Evtec, Blackboxstocks will not, and will not permit its subsidiaries to:

Nothing contained in the Exchange Agreement shall give Evtec, directly or indirectly, the right to control or direct the operations of any Blackboxstocks company prior to the Closing, and prior to the Closing, each Blackboxstocks company shall exercise, consistent with the terms and conditions of the Exchange Agreement, complete control over its operations. Notwithstanding anything to the contrary set forth in the Exchange Agreement, no consent of Evtec will be required with respect to any matter set forth in the Exchange Agreement to the extent the requirement of such consent would violate any applicable legal requirements.

Conduct of Business by Evtec Pending the Closing

Evtec and its subsidiaries have agreed that, during the Pre-Closing Period, Evtec shall, and shall cause its subsidiaries to, conduct their respective businesses and operations (a) in the ordinary course of business consistent with past practice; and (b) in compliance in all material respects with all applicable legal requirements and requirements of all contracts that constitute Evtec contracts. The foregoing is qualified (i) as set for in the Evtec disclosure schedule, (ii) as expressly contemplated by the Exchange Agreement, (iii) as required by applicable legal requirements, or (iv) if Blackboxstocks shall otherwise consent in writing.

In addition, without limiting the foregoing, other than as expressly contemplated by the Exchange Agreement, or with the prior written consent of Blackboxstocks, Evtec will not, and will not permit its subsidiaries to:

Nothing contained in the Exchange Agreement shall give Blackboxstocks, directly or indirectly, the right to control or direct the operations of any Evtec company prior to the Closing, and prior to the Closing, each Evtec company shall exercise, consistent with the terms and conditions of the Exchange Agreement, complete control over its operations. Notwithstanding anything to the contrary set forth in the Exchange Agreement, no consent of Blackboxstocks will be required with respect to any matter set forth in the Exchange Agreement to the extent the requirement of such consent would violate any applicable legal requirements.

Covenants and Additional Agreements

Registration Statement; Information Statement

The parties agree to the following actions to take place on or before the later of (x) sixty days after the date of the Exchange Agreement, or (y) ten days after Blackboxstocks’ receipt of Evtec financials:

In relation to the preparation and filing of this information statement/prospectus, the parties agreed to the following terms:

Director Indemnification and Insurance

The Exchange Agreement provides that, from and after the Closing, the Combined Company will, for a period of six years after Closing, indemnify and hold harmless all present and former directors and officers of any Evtec company or Blackboxstocks against all claims, losses, liabilities, damages, judgments, fines and reasonable fees, costs and expenses, including attorneys’ fees and disbursements, incurred in connection with any claim, action, suit, proceeding or investigation, arising from the fact that the party was a director or officer of Blackboxstocks or an Evtec company.

In addition, from and after the Closing, the Combined Company will maintain directors’ and officers’ liability insurance policies, at Evtec’s expense, for the Combined Company and its subsidiaries. Prior to closing, Blackboxstocks will purchase and fully pre-pay, at Blackboxstocks’ expense, a “tail” endorsement for Blackboxstocks’ existing directors’ and officers’ insurance policies and Blackboxstocks’ existing fiduciary liability insurance policies, in each case, that provides a six-year extended reporting period from and after the Closing for claims made against an individual insure for any alleged or actual wrongful acts that occurred prior to the Closing. If no such “tail” is available to be purchased, Blackboxstocks will obtain and fully pre-pay, at Evtec’s expense, the premium for directors’ and officers’ and fiduciary liability insurance policies which would be the equivalent of the “tail” with coverage that is substantially equivalent to and in any event not less favorable than the Blackboxstocks existing directors’ and officers’ and fiduciary liability insurance. Evtec will obtain run-off “tail” endorsements to its existing directors’ and officers’ insurance policies (or runoff or “tail” policies of at least the same coverage containing terms and conditions no less advantageous to the current and all former directors and officers of Evtec) with respect to acts or failures to act prior to the Closing.

All rights to exculpation and indemnification in the Exchange Agreement are in addition to any rights otherwise available to the current and former directors and officers of Blackboxstocks and Evtec.

Non-Solicitation

During the period before Closing, each Blackboxstocks and Evtec will not, and will cause each of their respective subsidiaries, and their respective representatives not to, directly or indirectly:

For purposes of the Exchange Agreement, “Acquisition Proposal” means any offer, proposal, inquiry or indication of interest contemplating or otherwise relating to any Acquisition Transaction. “Acquisition Transaction” means any transaction or series of transactions involving:

For purposes of the Exchange Agreement, “Evtec Acquisition Proposal” means any offer, proposal, inquiry or indication of interest contemplating or otherwise relating to any transaction or series of transactions involving:

During the period before Closing, Blackboxstocks and Evtec will promptly (and in no event later than 48 hours after receipt of any Acquisition Proposal or any inquiry or indication of interest that Blackboxstocks or Evtec reasonably expects to lead to an Acquisition Proposal) advise the other orally and in writing of any Acquisition Proposal or inquiry or indication of interest that Blackboxstocks or Evtec reasonably expects to lead to an Acquisition Proposal (including the identity of the Person making or submitting such Acquisition Proposal, inquiry or indication of interest, and the material terms thereof) that is made or submitted by any person during the period before Closing. Blackboxstocks and Evtec will keep the other informed, on a prompt basis, in all material respects with respect to the status of any such Acquisition Proposal, inquiry or indication of interest and any modification or proposed modification thereto.

Post-Closing Financing

Subsequent to the Closing, Blackboxstocks shall not issue any convertible debt securities or convertible preferred stock that is convertible into common stock at a variable rate or a rate that is lower than the fair market value of the Combined Company’s common stock at the time of issuance for a period of six months.

Listing; Symbol

Blackboxstocks will use its commercially reasonable efforts to cause (a) the shares of Blackboxstocks common stock to be issued in connection with the Exchange to be approved for listing (subject to notice of issuance) on Nasdaq at or prior to the Closing and (b) the Blackboxstocks common stock to be listed on Nasdaq under a symbol chosen by Evtec prior to the date of the Exchange Agreement at or as promptly as possible after the Closing.

Blackboxstocks Reverse Stock Split

If mutually agreed, Blackboxstocks will use commercially reasonable efforts to seek stockholder approval necessary to adopt an amendment to its organizational documents to authorize the board of directors of Blackboxstocks to effect a reverse stock split and Blackboxstocks will take such other reasonably necessary actions to effectuate the reverse stock split if agreed by mutual consent of Evtec and Blackboxstocks.

Blackbox.io Inc

Blackboxstocks agreed to organize Blackbox.io Inc., a Delaware corporation and wholly owned subsidiary of Blackboxstocks prior to Closing, and contribute all current pre-Closing business assets of Blackboxstocks to Blackbox Operating and cause Blackbox Operating to assume all current pre-Closing business liabilities of Blackboxstocks, other than any Blackboxstocks assets or Blackboxstocks liabilities that are primarily related to or required by Blackboxstocks in order to operate as a public or Nasdaq listed company. Blackboxstocks will provide Evtec with a list and/or copies of such contracts upon request.

Certain Other Covenants

The Exchange Agreement contains certain other covenants of Blackboxstocks and Evtec relating to, among other things:

Conditions to the Closing of the Exchange Agreement

The obligations of each of the parties to the Exchange Agreement to effect the Exchange and consummate the Contemplated Transactions are subject to the satisfaction at or prior to the Closing of the following conditions:

The obligation of Evtec and Sellers to effect the Exchange is also subject to the following conditions:

The obligation of Blackboxstocks to effect the Exchange is also subject to the following conditions:

Termination of the Exchange Agreement

Termination by Either Blackboxstocks or Evtec

The Exchange Agreement may be terminated and the Exchange may be abandoned, at any time prior to the Closing, notwithstanding approval thereof by Blackboxstocks stockholders:

Termination by Evtec

Evtec may also terminate the Exchange Agreement, by written notice to Blackboxstocks:

Termination by Blackboxstocks

Blackboxstocks may also terminate the Exchange Agreement, by written notice to Evtec:

Effect of Termination

In the event of termination of the Exchange Agreement, the Exchange Agreement will become void and there will be no liability on the part of any party to the Exchange Agreement or any of its affiliates, directors, officers, or stockholders except for as provided in “Termination Fees and Expense Amounts” below, and for any liability for any knowing breach of any representation, warranty, covenant or obligation contained in the Exchange Agreement. The confidentiality obligations will survive termination of the Exchange Agreement in accordance with the terms of the confidentiality agreement.

Termination Fees and Expense Amounts

Blackboxstocks will pay to Evtec $500,000 plus all fees and expenses (up to $250,000) incurred by Evtec in connection with the authorization, negotiation, execution and performance of the Exchange Agreement and the related Transactions if Evtec terminates the Exchange Agreement pursuant to the Section titled “Termination by Evtec” above. Blackboxstocks must pay all fees and expenses within two business days after such termination.

Evtec will pay to Blackboxstocks $500,000 plus all fees and expenses (up to $250,000) incurred by Blackboxstocks in connection with the authorization, negotiation, execution and performance of the Exchange Agreement and the related Transactions if Blackboxstocks terminates the Exchange Agreement pursuant to the Section titled “Termination by Blackboxstocks” above. Evtec must pay all fees and expenses within two business days after such termination.

Except as otherwise provided in this “Termination Fees and Expense Amounts” section, all fees and expenses incurred in connection with the Exchange Agreement and Contemplated Transactions will be paid by the party incurring such expenses, whether or not the Exchange is consummated. Notwithstanding the foregoing, Blackboxstocks and Evtec will share equally all fees and expenses, other than attorneys’ and accountants’ fees and expenses, incurred in the following circumstances:

Notwithstanding the foregoing, Evtec shall be responsible for up to $175,000 of Blackboxstocks’ legal fees and expenses as set forth in the Binding Amendment to the Binding Letter of Intent dated November 21, 2023, regardless of whether or not the Exchange Agreement is terminated.

Cumulative Remedies and Specific Performance

All rights and remedies existing under the Exchange Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available. Each of the parties to the Exchange Agreement will be entitled to an injunction, specific performance and other equitable relief to prevent breaches of the Exchange Agreement and to enforce specifically the terms and provisions of the Exchange Agreement in addition to any other remedies at law or in equity to which each is entitled.

AGREEMENTS RELATED TO THE EXCHANGE

Blackboxstocks’ Written Consent of Consenting Stockholder

On May 6, 2024, Gust Kepler, a director, Chief Executive Officer, President of Blackboxstocks, and Blackboxstocks stockholder beneficially owning 573,210 issued and outstanding shares of our common stock and all 3,269,998 issued and outstanding shares of our Series A Preferred stock (the “Consenting Stockholder”), consented to, approved, and adopted the following resolutions relating to the Exchange:

The foregoing description of the written consent of the Blackboxstocks Consenting Stockholder (the “Written Consent of Consenting Stockholder”) does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Written Consent of Consenting Stockholder, a copy of which is attached to the Current Report on Form 8-K filed with the SEC on December 18, 2023 and incorporated by reference herein. For further information, please read the section entitled “Where You Can Find More Information & Incorporation by Reference” of this information statement/prospectus. You are urged to read the Written Consent of Consenting Shareholder carefully and in its entirety because it, and not the description above or elsewhere in this information statement/prospectus, is the governing legal document.

The Option Agreement

On or before Closing, Blackboxstocks and Gust Kepler agreed to enter into an option agreement (the “Option Agreement”) as a condition to the willingness of Blackboxstocks, Evtec, and Sellers to enter into the Exchange Agreement.

Option Consideration

Under the Option Agreement, Blackboxstocks will have the right to call for redemption and Mr. Kepler will have the right to cause Blackboxstocks to redeem all of the issued and outstanding shares of Series A Convertible Preferred Stock of Blackboxstocks held by Mr. Kepler in exchange for all shares of Series A Convertible Preferred Stock of Blackbox.io Inc. held by Blackboxstocks.

Restrictive Covenants

Blackboxstocks agreed not to consent to or cause Blackbox.io Inc. to take any of the following actions without the express written consent of Mr. Kepler until the option rights under the Option Agreement are exercised:

The foregoing description of the Option Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Option Agreement, a copy of which is attached to the Current Report on Form 8-K filed with the SEC on December 18, 2023 and incorporated by reference herein. For further information, please read the section entitled “Where You Can Find More Information & Incorporation by Reference” of this information statement/prospectus. You are urged to read the Option Agreement carefully and in its entirety because it, and not the description above or elsewhere in this information statement/prospectus, is the governing legal document.

Joinder Agreements

As a covenant within the Exchange Agreement, Evtec will cause each person who acquires shares in Evtec share capital from Evtec after the date of the Exchange Agreement and before Closing to become a party to the Exchange Agreement by executing a Joinder Agreement (the “Joinder Agreements”).

The foregoing description of the Joinder Agreements does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the form Joinder Agreement, a copy of which is attached to the Current Report on Form 8-K filed with the SEC on December 18, 2023 and incorporated by reference herein. For further information, please read the section entitled “Where You Can Find More Information & Incorporation by Reference” of this information statement/prospectus. You are urged to read the form Joinder Agreement carefully and in its entirety because it, and not the description above or elsewhere in this information statement/prospectus, is the governing legal document.

The Contingent Value Rights Agreement

Blackboxstocks, Blackbox Operating, Securities Transfer Corporation (the “Rights Agent”), and Gust Kepler (the “Holder Representative”) entered into a Contingent Value Rights Agreement (the “CVR Agreement”). The CVR Agreement will entitle each holder of Blackboxstocks common stock of record (a “Holder”) on a date immediately prior to Closing (the “CVR Record Date”) to a dividend of one contractual contingent value right (a “CVR”) issued by Blackboxstocks per share of Blackboxstocks common stock held by such Holder.

CVR Definitions

For purposes of the CVR Agreement, “CVR Transaction” means a transaction consummated at any time prior to the CVR Expiration Date pursuant to which (i) Blackboxstocks or Blackbox.io Inc. grants, sells, licenses or otherwise transfers some or all of the rights to the CVR Assets, including any rights to develop or commercialize the CVR Assets, including a license, option, or sale of assets with respect to the CVR Assets or any other sale, license, transfer, or other monetizing event of all or any part of the CVR Assets; or (ii) the exercise of that certain Option Agreement between Blackboxstocks and Gust Kepler; and provided further, that any such transaction involving any asset other than a CVR Asset shall not constitute a CVR Transaction. For clarity, the sale of all or substantially all of Blackboxstocks’ stock or assets (to the extent such asset sale includes assets unrelated to the CVR Assets), or a merger, acquisition or similar transaction shall not be deemed a CVR Transaction. For the avoidance of doubt, more than one CVR Transaction may occur under the CVR Agreement.

For purposes of the CVR Agreement, “CVR Assets” means all of the assets, rights, and properties owned, used, or useable by the Blackbox.io Inc. in connection with or related to the business as conducted by Blackbox.io Inc. and all of Blackboxstocks’ rights therein.

For purposes of the CVR Agreement, “CVR Payment” means an amount equal to the Net Proceeds actually received by Blackboxstocks at the closing of the first CVR Transaction to occur following the date hereof, or in the event that the Option Agreement is exercised, the aggregate number of shares of Blackbox.io Inc. common stock held by Blackboxstocks at the time the Option Agreement is exercised.

For purposes of the CVR Agreement, “Net Proceeds” means an aggregate amount equal to the sum of: (a) all cash consideration actually received by Blackboxstocks or Blackbox.io Inc. in connection with the consummation of a CVR Transaction during the twenty-four (24) month period immediately following the consummation of a CVR Transaction, plus (b) with respect to any non-cash consideration (such as stock) actually received by Blackboxstocks or Blackbox.io Inc. in connection with the consummation of a CVR Transaction during the twenty-four (24) month period immediately following the consummation of a CVR Transaction, the fair market value of such non-cash consideration, as determined by the board of directors in good faith, less (c) all out-of-pocket transaction costs and expenses incurred by Blackboxstocks or Blackboxstocks after the date of the CVR Agreement to a counter-party for the negotiation, entry into and consummation of a CVR Transaction, including any broker fees, finder’s fees, advisory fees, accountant or attorney’s fees, and reasonable costs of recovery of any amounts payable to Blackboxstocks in connection with a CVR Transaction, less (d) any applicable sales, income and other taxes incurred by the Company or its Affiliates in respect of a CVR Transaction, and less (e) all fees and costs (including any amounts paid for indemnification) payable by Blackboxstocks to the Rights Agent pursuant to the CVR Agreement in connection with a CVR Transaction. For the avoidance of doubt, amounts placed in escrow or earnout, contingent or other post-closing payments, including royalty payments, in connection with a CVR Transaction will not be considered Net Proceeds unless (and only to the extent that) such amounts are actually received by Blackboxstocks during the twenty-four (24)‑month period immediately following the closing of such CVR Transaction. For the further avoidance of doubt, if a CVR Transaction occurs prior to the CVR Expiration Date, any such escrow, earnout, contingent or other post-closing payment released or paid after the CVR Expiration Date will be included in the calculation of Net Proceeds, so long as such amount is actually received by Blackboxstocks or its Affiliates within the twenty-four (24)‑month period immediately following the consummation of such CVR Transaction.

CVR Payment Procedures

No later than 30 days after the closing of a CVR Transaction, and within 30 days after the end of any calendar quarter in which Blackboxstocks has received Net Proceeds from any CVR Transaction, Blackboxstocks will deliver to the Holder Representative and the Rights Agent a certificate stating that the Holders are entitled to receive a CVR payment and setting forth Blackboxstocks’ calculation of the CVR payment amount. If no CVR Transaction has been effected prior to the date that is 24 months following the date of the Closing (the “CVR Expiration Date”), then no later than 30 days after the CVR Expiration Date, Blackboxstocks will deliver to the Holder Representative and the Rights Agent a certificate stating that no CVR Transaction has been consummated prior to the CVR Expiration Date. If the Holder Representative does not object within 30 days to any determination or calculation set forth in the certificates, then the CVR payment amount will be final and binding on all parties. If the Holder Representative objects, then Blackboxstocks and Holder Representative will attempt in good faith to resolve such matters within 30 days after receipt of such objection by Blackboxstocks. Blackboxstocks, within 10 business days following the final determination of the CVR payment amount, pay such CVR payment amount to the Rights Agent (for the account of the Holders) by wire transfer of immediately available funds to such account as may be designated by the Rights Agent. The Rights Agent will distribute the CVR payment amount to the Holders (each Holder being entitled to receive its pro rata share of such CVR payment amount, based on the number of CVRs held by such Holder, by check or wire transfer.

Blackboxstocks will be entitled to deduct and withhold, or cause to be deducted or withheld, from any CVR payment amount or other amount payable pursuant to the CVR Agreement, such amounts as Blackboxstocks is required to deduct and withhold with respect to the making of such payment under the Internal Revenue Code, or any provision of state or local tax law. To the extent that amounts are so withheld or paid over to or deposited with the relevant governmental entity, such withheld amounts will be treated for all purposes of the CVR Agreement as having been paid to the Holder in respect of which such deduction and withholding was made.

CVR Rights

The CVRs will not have any voting or dividend rights, and interest will not accrue on any amount payable on the CVRs to any holder. The CVRs do not represent any equity or ownership interest in Blackboxstocks. The rights of the Holders and the obligations of Blackboxstocks are contract rights limited to those expressly set forth in the CVR Agreement, and such Holders’ sole right to receive property thereunder is the right to receive cash from Blackboxstocks, if any, or the common stock of Blackbox.io Inc. in the Event that the Option is exercised, through the Rights Agent in accordance with the terms thereof. A CVR does not constitute a security of the Company.

Holder’s Right to Abandon CVR

A Holder may at any time, at such Holder’s option, abandon all of such Holder’s remaining rights in a CVR by transferring such CVR to Blackboxstocks or any of its affiliates without consideration. Nothing in the CVR Agreement shall prohibit Blackboxstocks or its affiliates from offering to acquire or acquiring CVRs, in private transactions or otherwise, in its sole discretion. Any CVRs acquired by Blackboxstocks or any of its Affiliates shall be automatically deemed extinguished and no longer outstanding thereunder for any purpose.

Duties, Responsibilities, and Rights of the Rights Agent

The Rights Agent will not have any liability for any actions taken or not taken in connection with the CVR Agreement, except to the extent of its willful misconduct, bad faith or gross negligence. No provision of the CVR Agreement will require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties thereunder or in the exercise of any of its rights or powers. Notwithstanding anything contained therein to the contrary, the Rights Agent’s aggregate liability under the CVR Agreement, or from all services provided or omitted to be provided under the CVR Agreement, whether in contract, or in tort, or otherwise, is limited to, and shall not exceed, the amounts paid thereunder by Blackboxstocks to the Rights Agent as fees and charges, but not including reimbursable expenses.

The Holder Representative may direct the Rights Agent to act on behalf of the Holders in enforcing any of its or their rights thereunder, including the delivery of any objection notice and negotiation or arbitration; provided, however, the Rights Agent may not act on behalf of the Holders or the Holder Representative in any dispute relating to or arising from diligence procedures or relating to whether a CVR Transaction has occurred or the amount of any CVR payment. The Rights Agent will be under no obligation to institute any action, suit or legal proceeding or to take any other action likely to involve material expense unless the Holder Representative will furnish the Rights Agent with reasonable security and indemnity for any costs and expenses that may be incurred. All rights of action under the CVR Agreement may be enforced by the Rights Agent, and any action, suit or proceeding instituted by the Rights Agent on behalf of the Holders will be brought in its name as Rights Agent, and any recovery of judgment will be for the ratable benefit of all the Holders, as their respective rights or interests may appear.

In addition:

Covenants

In connection with the CVR Agreement, Blackboxstocks will:

Amendments

The Rights Agent, Holder Representative, and Blackboxstocks, when authorized by a resolution of the board of directors, may enter into one or more amendments for the purpose of adding, eliminating, or changing any or all provisions of the CVR Agreement. Notwithstanding the foregoing, Blackboxstocks, when authorized by a resolution of the board of directors, may enter into one or more amendments of the CVR Agreement without the consent of the Holder Representative or the Rights Agent for any of the following purposes:

Blackboxstocks, when authorized by a resolution of the board of directors, together with the Rights Agent, in the Rights Agent’s sole and absolute discretion, may enter into one or more amendments of the CVR Agreement without the consent of the Holder Representative for the following purposes:

Consolidation, Merger, Sale or Conveyance

Except as contemplated by the Exchange, Blackboxstocks will not consolidate with or merge into any other entity or sell, transfer, or otherwise convey all or substantially all of its assets to any person unless (i) the entity formed by such consolidation or into which Blackboxstocks is merged or the person that acquires by sale, transfer or other conveyance, all or substantially all of the assets of Blackboxstocks expressly assumes payment of amounts on all the CVRs and the performance of every duty and covenant of the CVR Agreement on the part of Blackboxstocks to be performed or observed and (ii) Blackboxstocks has delivered to the Holder Representative and the Rights Agent an Officer’s Certificate, stating that such consolidation, merger, conveyance, transfer or lease complies the CVR Agreement and that all conditions precedent relating to such transaction have been complied with.

For purposes of this section, a “Change of Control” means (a) (i) any consolidation or merger of Blackboxstocks with or into any other corporation or entity or person or (ii) any other corporate reorganization, in which the stockholders of Blackboxstocks immediately prior to such consolidation, merger or reorganization, own less than 50% of the voting power of the surviving entity immediately after such consolidation, merger or reorganization, except in the case of a bona fide capital raising transaction, or (b) any sale of all or substantially all of the assets of Blackboxstocks. In connection with a Change of Control, Blackboxstocks will have the right, but not the obligation, in its sole discretion, to redeem all, but not less than all of the outstanding CVRs, at any time from and after the public announcement of such Change of Control and ending on the 30th day following the consummation of the Change of Control.

The Holder Representative

The Holder Representative is appointed as the representative of the Holders and as the attorney-in-fact and agent for an on behalf of each Holder for purposes of the CVR Agreement and will take such actions to be taken by the Holder Representative under the CVR Agreement and such other actions on behalf of such Holders as it may deem necessary or appropriate in connection with or to consummate the transactions contemplated by the CVR Agreement, including:

A decision, act, consent or instruction of the Holder Representative hereunder will constitute a decision, act, consent or instruction of all Holders and will be final, binding and conclusive upon each such Holder, and Blackboxstocks and the Rights Agent may rely upon any such decision, act, consent or instruction of the Holder Representative as being the decision, act, consent or instruction of each and every such Holder.

Disputes

Any and all disputes arising under the CVR Agreement (including but not limited to any claims brought by the Holder Representative on behalf of the Holders) shall be settled by final and binding arbitration administered by the American Arbitration Association. Arbitration hearings shall take place within 90 days of filing and awards rendered within 120 days. The fees and expenses of the arbitration, including the costs and expenses billed by the arbitrator in connection with the performance of its duties described herein, will be paid by the non-prevailing party, as determined by the arbitrator, in proportion with the extent to which the prevailing party prevails, and the remainder of such costs and expenses will be paid by the prevailing party; provided, however, that any fees and expenses of the arbitration incurred by the Holder Representative shall be offset against any CVR payment amount, if any. Each party will be responsible for its own attorney fees, expenses and costs of investigation provided, however, that any such fees, expenses and costs incurred by the Holder Representative shall be offset against any CVR payment amount, if any.

Blackboxstocks, the Rights Agent, and the Holder Representative will negotiate in good faith for a period of 30 days to resolve any controversy or claim arising out of or relating to the CVR Agreement or the breach thereof before any arbitration pursuant the provision above.

The foregoing description of the CVR Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the CVR Agreement, a copy of which is attached to the Current Report on Form 8-K filed with the SEC on December 18, 2023 and incorporated by reference herein. For further information, please read the section entitled “Where You Can Find More Information & Incorporation by Reference” of this information statement/prospectus. You are urged to read the form CVR Agreement carefully and in its entirety because it, and not the description above or elsewhere in this information statement/prospectus, is the governing legal document.

U.S. Federal Income Tax Consequences of the Receipt of CVRs to U.S. Holders

Blackboxstocks intends to take the position that the fair market value of the CVRs cannot be reasonably ascertained on the date of the issuance of the CVRs and, accordingly, the issuance of the CVRs constitutes an “open transaction.” Accordingly, absent a change in law requiring otherwise, Blackboxstocks will not report the issuance of the CVRs as a current distribution of property with respect to its stock and will instead report each future cash payment (if any) on the CVRs as a distribution by Blackboxstocks for U.S. federal income tax purposes, with each such payment being reported as a dividend to the extent of Blackboxstocks current or accumulated earnings and profits in the year in which such payment is made. However, there is substantial uncertainty as to the U.S. federal income tax treatment of the issuance of CVRs. Specifically, there is no authority directly addressing whether the issuance of contingent value rights with characteristics similar to the CVRs should be treated as a distribution of property with respect to Blackboxstocks’ common stock, a distribution of equity, a “debt instrument” or an “open transaction” for U.S. federal income tax purposes. Applicable U.S. Treasury regulations provide that “open transaction” treatment is only available in those “rare and extraordinary cases” involving contingent payment obligations in which the “fair market value of the obligation cannot reasonably be ascertained.” If the issuance of the CVRs is treated as an “open transaction,” a U.S. Holder (as defined in the above referenced section of this information statement/prospectus) would not generally recognize income in respect of the CVRs at the time such CVRs are issued and would take no tax basis in the CVRs. Future cash payments (if any) on the CVRs would be treated as a distribution and constitute a dividend to the extent of the U.S. Holder’s pro rata share of Blackboxstocks current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) in the taxable year of such payment, then as a non-taxable return of capital to the extent of the U.S. Holder’s basis in its Blackboxstocks common stock, and finally as capital gain from the sale or exchange of Blackboxstocks common stock with respect to any remaining payment. Dividends received by individual U.S. Holders are currently eligible for reduced rates of taxation applicable to long-term capital gains, provided certain holding period requirements are met.

Blackboxstocks intends to treat the issuance of CVRs as a separate transaction for U.S. federal income tax purposes. However, whether the issuance of CVRs should be treated as a separate transaction or as a single transaction is uncertain. Consistent with Blackboxstocks’ intent to treat the issuance of CVRs as a separate transaction for U.S. federal income tax purposes, a U.S. Holder of Blackboxstocks common stock generally would not recognize gain or loss upon the issuance of CVRs.

The tax consequences to U.S. Holders of the receipt of CVRs are subject to substantial uncertainty and may also depend on the U.S. Holder’s particular facts and circumstances. U.S. Holders should consult their tax advisors as to the specific tax consequences to them.

U.S. & U.K FEDERAL INCOME TAX CONSEQUENCES

U.S. Federal Income Tax Consequences

The following is a general summary of the U.S. federal income tax consequences of the Exchange to U.S. Holders (as defined below) of Blackboxstocks and Evtec. This discussion does not purport to be a complete analysis of all potential tax consequences of the Exchange. This discussion is based upon the Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations, judicial authorities, published positions of the Internal Revenue Service (the “IRS”) and other applicable authorities, all as currently in effect and all of which are subject to change or differing interpretations (possibly with retroactive effect). Any such change or differing interpretation could affect the continuing validity of this discussion. Neither Blackboxstocks nor Evtec has sought or intend to seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS or a court will not take a position regarding the U.S. federal income tax consequences of the Exchange contrary to those discussed below.

This discussion is limited to U.S. Holders that hold their shares of Blackboxstocks or Evtec as capital assets within the meaning of Section 1221 of the Code. This discussion does not address all of the tax consequences that may be applicable to a particular Blackboxstocks or Evtec stockholder or to Blackboxstocks or Evtec stockholders that are subject to special treatment under U.S. federal income tax laws, such as:

In addition, this discussion does not address any alternative minimum tax or any state, local or foreign tax consequences of the Exchange, nor does it address any tax consequences arising under the unearned income Medicare contribution tax pursuant to the Health Care and Education Reconciliation Act of 2010.

If a partnership or other entity taxed as a partnership holds Evtec ordinary shares or Blackboxstocks common stock, the tax treatment of a partner in the partnership generally would depend upon the status of the partner, the activities of the partnership and certain determinations made at the partner level. Partnerships and partners in such a partnership should consult their tax advisors about the tax consequences of the Exchange to them.

For purposes of this discussion, the term “U.S. Holder” means a beneficial owner of Evtec shares or Blackboxstocks common stock that for U.S. federal income tax purposes is:

U.S. Federal Income Tax Treatment of the Exchange

The parties intend for the Exchange to constitute a tax-free reorganization within the meaning of Section 368(a) of the Code. Blackboxstocks and Evtec intend to treat the Exchange as constituting a reorganization within the meaning of Section 368(a)(1)(B) of the Code (a “B-Reorganization”). The U.S. Holder’s tax basis of the shares of Blackboxstocks common stock received will be the same as the tax basis of the U.S. Holder’s Evtec ordinary shares exchanged therefor. The holding period of the Blackboxstocks common stock in the hands of the U.S. Holder would include the holding period of the U.S. Holder’s ordinary shares of Evtec exchanged therefor.

If the Exchange is not treated as a B-Reorganization, then, subject to the limitations and qualifications described in the above referenced section of this information statement/prospectus, each U.S. Holder of Evtec share capital will generally recognize capital gain or loss, for U.S. federal income tax purposes, on the receipt of shares of Blackboxstocks common stock issued to such U.S. Holder in the Exchange. The U.S. federal income tax consequences to each U.S. Holder of Evtec share capital will depend on that stockholder’s particular circumstances. Each U.S. Holder of Evtec share capital should consult with his, her or its tax advisor for a full understanding of the tax consequences of the Exchange to that stockholder.

There are no expected material U.S. federal income tax consequences of the Exchange for U.S. Holders of Blackboxstocks common stock.

Material U.K. Income / Capital Gains Tax Consequences

The summary set out below is based on current United Kingdom (“UK”) tax law and HM Revenue and Customs (“HMRC”) practice (which may not be binding on HMRC) as of the date of this information statement/prospectus, both of which are subject to change, possibly with retrospective effect.

This information applies only to shareholders resident and, in the case of an individual, domiciled for tax purposes in the UK, who currently are the beneficial owners of Evtec ordinary shares and who hold their shares as an investment (other than under a personal equity plan, self-invested personal pension plan or individual savings account (ISA)). It does not apply to certain specific categories of owners of Evtec shares, including those for whom the Evtec ordinary shares constitute employment-related securities.

This summary does not purport to be an exhaustive analysis of all potentially relevant tax considerations in respect of the Exchange. It is for general information only and is not intended to be, nor should it be considered to be, legal or tax advice to any particular investor. It does not address all of the tax considerations that may be relevant to specific investors in light of their particular circumstances or to investors subject to special treatment under UK tax law. Each holder of Evtec share capital should consult with their tax advisor for a full understanding of the tax consequences of the Exchange to that stockholder.

Blackboxstocks and Evtec intend the Exchange to qualify as a UK tax free reorganization. Subject to certain conditions, the Capital Gains Tax (“CGT”) legislation in Section 135 TCGA 1992 provides that Evtec ordinary shares exchanged for Blackboxstocks common stock may be treated for UK tax residents as a reorganization of the original holding such that the Blackboxstocks common stock may be treated as if they were, and as having been acquired at the same time and for the same consideration as, the original Evtec stockholding, and consequently where this treatment applies there should be no disposal for CGT purposes as a result of such reorganization.

The conditions of Section 135 TCGA 1992 are:

Evtec has applied for an advance clearance from HMRC under Section 138 TCGA 1992 that the bona fide commercial reasons test applies but there is no guarantee that such clearance will be received. It should be noted that this test applies only to stockholders who (together with person connected with them) currently hold more than 5% of the shares in Evtec.

Evtec has also been applied for an advance clearance from HMRC under Section 701 ITA 2007 and Section 748 CTA 2010 that the main purpose, or one of the main purposes, of the Exchange is not to obtain an income tax or corporation tax advantage for UK individual or corporate stockholders, so that the transactions in securities rules should not apply to recharacterize the Exchange into a taxable event from the perspective of such individuals or corporates.

In the event that the conditions of Section 135 TCGA 1992 are not met and/or HMRC otherwise does not provide its clearance, the Exchange will be a chargeable event under the provisions of the CGT legislation. In that case each UK stockholder of Evtec share capital will generally recognize a chargeable gain or loss on the receipt of shares of Blackboxstocks common stock issued to such holder of Evtec share capital.

YOU SHOULD CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE U.S. FEDERAL, STATE AND LOCAL AND NON-U.S. TAX CONSEQUENCES OF THE EXCHANGE. THIS SUMMARY IS NOT INTENDED TO BE, NOR SHOULD IT BECONSTRUED TO BE, LEGAL OR TAX ADVICE TO ANY PARTICULAR SHAREHOLDER.

INFORMATION ABOUT BLACKBOXSTOCKS

Overview of Business

On April 1, 2024 Blackboxstocks incorporated and subsequently contributed substantially all of its business assets into its wholly owned subsidiary, Blackbox.io Inc. References to the business of Blackboxstocks in this section include the historical operations of Blackboxstocks and the continuing operations conducted through Blackbox.io Inc.

Blackboxstocks has developed a financial technology and social media hybrid platform offering real-time proprietary analytics and news for stock and options traders of all levels combined with a social media element and educational materials. Blackboxstocks’ web-based platform and native iOS and Android applications (the “Blackbox System”) employ “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. Blackboxstocks continuously scans the New York Stock Exchange (“NYSE”), NASDAQ, Chicago Board Options Exchange (the “CBOE”) and other options markets, analyzing over 10,000 stocks and over 1,500,000 options contracts multiple times per second. Blackboxstocks provides its subscribing members with a fully interactive audio and text based social media platform that is integrated into its dashboard, enabling its members to exchange information and ideas quickly and efficiently through a common network. We believe that the Blackbox System is a disruptive financial technology platform that uniquely integrates proprietary analytics with a community supported by a broadcast enabled social media system which connects traders of all kinds worldwide on an intuitive and user-friendly platform.

Blackboxstocks’ goal is to provide retail investors with the type of sophisticated trading tools that were previously available only to large institutional hedge funds and high-frequency traders together with an interactive community of traders and investors of all levels at an affordable price. We also strive to provide these trading tools in a user-friendly format that does not require complicated configurations by the user.

Blackboxstocks employs a subscription-based Software as a Service (“SaaS”) business model and maintains a growing base of members that spans over 40 countries. We currently offer monthly subscriptions to our platform for $99 per month and annual subscriptions for $959 per year.

The Company’s Mission

Blackboxstocks’ mission is to provide powerful proprietary analytics in a simple and concise format to level the playing field for the average retail investor. We strive to educate its members through our live trading community as well as our scheduled, calendared classes with live instructors. We want every member to feel they are part of a team with the goal of improving financial literacy. We believe that we are the antithesis of the “trading guru” platforms that feature a trading or investing expert that charges for what are often expensive courses. We do not charge for our classes. We do not upsell our members. All education and community programs are free with the subscription to our platform.

Revenue Model

We generate revenue from a software as a service (or SaaS) model whereby members pay either an annual or monthly fee for a subscription to our platform. We do not currently offer more than one level of subscription with varying levels of features. All members have full access to all of the features and educational resources of our platform.

Monthly subscriptions are currently priced at $99 and annual subscriptions are currently priced at $959 (a discount of $241). We occasionally offer gift cards and promotional discounts on our subscriptions.

Development of the Blackbox System

The Blackbox System was launched and made available for use to subscribing customers worldwide in September 2016. The initial product was a web-based platform focused on providing proprietary analytics and broadcast enabled social media for our community of members. In 2022 we launched full-featured native iOS and Android applications. Our product offering is comprised of three key elements: stock and options trading analytics, social media interaction, and educational programs and resources.

Stock and Options Trading Analytics

Our preconfigured dashboard is designed to be simple and easy to navigate and includes real-time proprietary alerts, stock and options scanners, financial news, institutional grade charting, and our proprietary analytics that can be utilized by traders of all levels. Our Blackbox System populates the stock and option data in real time and provides a wide range analytics and tools for traders. We offer many of the standard market tool features used by traders but differentiate our product with an array of unique proprietary features and derived data. These proprietary features are designed to filter out “market noise” and locate, in real-time, specific stocks and options that are likely to become market movers.

Standard features include, but are not limited to, (i) Real Time NYSE/NASDAQ Market Data, (ii) Real Time OPRA Options Trade Data, (iii) Real Time Streaming Market News Feed, (iv) Symbol Specific News, (v) Options News and Upgrades/Downgrades, (vi) Institutional Grade Charts, (vii) Multi-Chart Capability, (viii) Earnings and Dividend Dates, (ix) Daily Advancers / Decliners Scanner, and (x) User-specific Watch List.

Proprietary and advanced features include, but are not limited to, (i) Real Time Algorithm Driven Stock & Options Alerts, (ii) User Defined Symbol Specific Alert Criteria, (iii) Options Flow Scanner / Heatmap, (iv) Pre-Configured Pre/Post Market Scanners, (v) Stock and Option Volume Ratio Scanner, (vi) Volatility Indicator, (vii) Dark Pool Analysis, (viii) Insider Buying Analysis, (ix) Gamma Exposure, (x) FINRA Short Interest Analysis, (xi) Net Options Delta and Dollar Flow, (xii) Feature Rich Text- and Audio-based Social Media Components, (xii) GoNoGo Trend® indicator, (xiii) Team Trades Push Alerts, (xiv) Ability to Create and Manage Watchlists in the Mobile Application, (xv) Optimized and Improved Mobile Version of the Website, (xvi) Pro Tier, and (xvii) Additional Filters and Layouts to Extend Functionality of the Application.

In 2022 and 2023, we added several new proprietary and advanced studies to the Blackbox system to help both options and stock traders. These studies encompass advanced data tools with real time data that are easy for traders of all levels to use.

Dark Pool Analysis: we added dark pool trades on our charting system that updates in real time. Dark Pools are privately organized financial forums or exchanges for securities trading. Using our system, traders can easily see levels where large institutions or funds are trading. The Dark Pool Volume Profile is an indicator that visually displays a Dark Pool transaction directly on to the chart. The Volume Profile bar is overlayed at the price level at which the Dark Pool transaction is executed. The length of the volume profile is a visual representation of the share size of the dark pool transaction. The Dark Pool Volume Profile will also display historical activity when you change the time frame.

Insider Buying Analysis: we use the EDGAR portal to access all Form 4’s filed and update our charts where you find insiders buying stocks. This is a powerful tool for traders to easily see where the insiders or management are buying.

Gamma Exposure (GEX): Gamma is a measure of the rate of change of an options delta and it represents the rate at which an options delta will change as the price of the underlying changes. This proprietary study tracks the Gamma levels of all strike prices in real time by displaying a green/red bar at the strike prices. The day opens with the gamma levels from Open Interest and will adjust accordingly throughout the day as options are bought and sold. Finding the largest levels of Gamma Exposure (GEX) can serve as potential levels of support and/or resistance.

FINRA Short Interest Analysis: all the FINRA short interest data for stocks is plotted on our charts to let traders see how the shorting ratio of trades in the dark pools has changed over time.

Net Options Delta and Dollar Flow: This BlackBox proprietary study shows you the daily Net Options Delta (NOD) on a ticker. The delta of a net options position is the ratio of the change in the value of the position to the change in the price of the underlying asset. In other words, it is a measure of how much the value of the options position will change for a small change in the price of the underlying asset. Every single option trade is calculated in real time and the NOD of the stock is updated. This is further broken down into Put and Call NOD. Options dollar flow is a metric that measures the net flow of money into or out of options contracts. It is calculated by taking the difference between the total premium paid for call options and the total premium paid for put options. Positive dollar flow indicates a bullish sentiment, where in turn a negative dollar flow would indicate a bearish sentiment. This proprietary BlackBox study breaks down the dollar flow into three expiration time frames from near term, monthly and total.

Go/No-Go Study: We added the GoNoGo Trend ® indicator that provides a simple colored study available in our charts that displays the strength of a stock’s momentum using multiple technical factors.

Team Trade Push Alerts: We provided access to push alert notifications so that our members could get real time alerts on their mobile devices of the trades made by their favorite Blackbox Team Trader(s).

Watchlists for our Mobile Application: We improved our mobile application to include the capability to add watchlists. This feature allows our members to quickly analyze their specific portfolio positions using our powerful mobile application while on the go.

Pro Tier Capability: We added a pro-tier capability allowing professional traders to subscribe to our platform. Professional traders are required to pay substantially higher fees than retail traders for the exchange data we provide them. Due to these higher fees, most applications such as Blackbox are unable to provide access to their systems as it is not economically viable. We now have a new onboarding system that allows us to provide professional traders the ability to use our system.

Brokerage Integrations

Blackboxstocks has trading integrations with the online brokerages E*Trade and TradeStation. These integrations allow our members to execute trades through E*Trade or TradeStation directly from the Blackbox platform. The Company’s members that use this integration feature have access to certain custom tools. One of these tools is a “quick-click” feature that loads Blackboxstocks’ system’s stock and options alerts with two simple clicks, greatly reducing the time it takes for order entry. This feature is especially helpful for the order entry of option contracts, as they are detailed, lengthy, and cumbersome to enter. The system has been designed to quickly integrate with new brokers and we intend to expand the number of brokerages with whom we have trading integrations in the future.

Education

We offer all members full access to our curriculum of classes, orientations, and live market sessions. All of our education programs are free to our members. Our curriculum includes classes for beginner, intermediate, and advanced-level traders. We believe education is vital to increasing the probability of our members long term success in the markets. We have many regularly calendared live webinars, Q&A sessions, as well as recorded classes. In addition to our regularly calendared classes, we often feature ad hoc classes taught by seasoned members of our community. The educators of these classes often specialize in specific market sectors or trading strategies. Classes and webinar events offered to our members include but are not limited to:

In addition to its internal curriculum, Blackboxstocks has partnered with the Options Industry Council (OIC), a nonprofit organization funded by the Options Clearing Corporation (OCC) with the mission of providing the investing public a better understanding of the options markets. Classes taught by the OIC to our members include but are not limited to (i) The Greeks Part I, (ii) The Greeks Part II, (iii) Implied Volatility, (iv) Short Term Options Explained, and (v) Options Pricing Explained.

One of the most attractive aspects of its education program is that the classes are taught by members of its community. The student members who take these are often familiar with the instructor from following them in live trading channels on its platform. We believe this familiarity often brings an element of authenticity and heightened engagement increasing the success of these educational endeavors as well as adding to the community aspect of its platform.

The Blackbox Advantage

A principal component to our platform is the flexibility to provide members intuitive yet powerful technical analytics that scale with user knowledge. Our preconfigured dashboard defaults to a general setting that is designed to be easy for new members to navigate. Within this same dashboard we provide a multitude of toggles and filters for more sophisticated traders to allow them to implement custom features for their more advanced trading strategies. Most importantly, our live community consisting of thousands of traders creates a real-time community curated support system whereby seasoned traders often mentor newer members. We believe this is one of the primary strengths and differentiators of our platform. Although we offer a complete curriculum of scheduled classes weekly, the live interaction amongst our members proves to be invaluable. We believe this is due to the level of excitement created when new members can watch seasoned members of the community making trades in real time and providing an accompanying narrative. In addition to the educational component, the community element of our platform harnesses a powerful dynamic that can be described as “the best of man and machine”. Our powerful algorithm technology scans the NYSE, NASDAQ, CBOE and other options exchanges to find market volatility and anomalies and displays them on a common dashboard shared across the globe. With thousands of eyes on this data, our members can quickly interact and form a consensus on the trading opportunity at hand.

Market Opportunity

We believe the global COVID-19 pandemic of 2020 stimulated significant change for online technologies including financial and trading related companies such as Blackbox. More than 10 million new brokerage accounts were opened by individuals in 2020 — more than ever in one year, according to Devin Ryan, an analyst at JMP Securities. This newfound interest in the market was very positive for us as our user base grew rapidly ind2021. The combination of an influx of new investors as well as the tendency for those new investors to gravitate towards innovative financial technology have been positive long term macro-economic trends for us.

It is difficult to quantify the number of people that can be classified as day traders, since the term is somewhat ambiguous, especially since there has been a large influx of self-directed investors in 2020 and 2021. The two types of traders often overlap and separating these demographics can be difficult. Recent data suggest the following size for this growing market:

We believe that the market opportunity for the technology that we have developed and targeted towards day traders can be utilized for self-directed investors as well as institutions -a substantially broader market. We intend to develop mobile applications for self-directed investors that provide them with financial information and data that is not commonly provided by retail brokers. Our first product aimed at this initiative will be Stock Nanny (see “New Products” below). We also intend to market our technologies to institutional financial companies for integration into their existing products or for sub-licensing to their customers.

Recent Technology and Development Initiatives

We continually upgrade our platform to provide the best user experience and maximum value for our members. Many of the new features or improvements to our existing features are suggested by our members. Much of our platform is community curated and we take pride in collaborating with and implementing the suggestions from our members that use our system every day. Our development efforts in 2023 were largely focused on enhancing core parts of our applications and fine-tuning the overall architecture to improve cost efficiencies, eliminate remaining technical debt, and provide our members with a more stable, scalable, and performant system.

Development of Native Applications for iOS and Android

We currently have fully-featured native applications for iOS and Android devices which were released in April of 2022. We believe that our mobile applications provide our members additional flexibility in their ability to access our platform when away from a desktop computer.

Platform Upgrades

Since the end of 2021, we have made significant upgrades and changes to our platform. We launched version 2.0 of the application which was a complete rewrite of the application front-end and overhaul of the backend to take advantage of modern technology capabilities that were widely unavailable when the product was initially released. This resulted in much better performance, a smaller resource footprint, and improved reliability and scale. Other development initiatives included the ability to view multiple charts, an enhanced social media capability, and enhanced charting studies, which include additions of new features or indicators such as our GoNoGo indicator, gamma exposure, net options delta and others.

We believe that technological developments to the Blackbox System and platform have been and will continue to be critical to the success of our company. Although we have experienced significant growth and received positive feedback from our members, we believe adding these new technology sets in parallel will be significant drivers of future growth.

New Products

We intend to leverage our existing financial technology platform and data resources for the creation of new and unique products to serve our existing subscribers, as well as address a broader market. We currently have a vast array of derived data that we believe will be extremely useful to self-directed investors as well the day traders and swing traders that we currently cater to. We believe the self-directed investor demographic is significantly larger than that of day traders and swing traders and presents an enormous opportunity for our growth.

Stock Nanny

We are currently developing a new product named Stock Nanny in the form of a mobile app for iOS and Android that will provide real-time portfolio alerts for a broad demographic of investors. Many of these alerts are a product of derived data currently generated on the Blackbox platform. This app will be designed to integrate with online brokerage platforms and allow the user to import their current stock positions and stocks on their watchlist into our app. We believe these alerts will be extremely useful for portfolio management, loss mitigation, and other investment strategies. We plan to provide extensive menu options to allow the user to customize this application to their specific needs. This will be a stand-alone product and we plan to target all self-directed retail investors, not just day traders or swing traders allowing the Company to address a much broader segment of the market. We expect to release this product in 2024.

Enterprise Products for Professionals

We have not historically marketed our product to persons or entities deemed by the exchanges as “professional traders” or financial institutions. A professional trader is generally defined by the exchanges as a person that:

The exchanges charge a substantial premium for their data to users who meet the criteria described above. In addition to the higher rates, the onboarding and subsequent approval process by these exchanges is cumbersome and not easily accomplished solely through an online process.

In 2023 we developed a streamlined digital onboarding process allowing financial professionals to be able to use our product. We believe that this is an important first step to not only marketing our existing products to financial professionals but also developing new and even bespoke products for this market segment. We are targeting financial institutions to utilize our products, subsets of our systems or even creating bespoke products on their behalf. Poor market performance in 2022 presented significant challenges to retail oriented companies in our industry including us. In order to provide different and more stable revenue streams, we believe it is important for us to use our existing technology base as a basis to develop new revenue streams from professional and institutional customers.

Marketing of the Blackbox System

We launched our Blackbox System and platform for use in the United States and made it available to subscribers in September 2016. Use of the platform is sold on a monthly or annual subscription basis to individual consumers through our website at https://blackboxstocks.com. We believe our Blackbox System subscriptions are priced competitively with similar web-based trading tools although the number of competitors offering limited aspects of what our system provides at lower prices has increased in 2023. We primarily use a combination of digital marketing campaigns and customer referral compensation plans in our advertising program. Our digital advertising efforts are comprised of display and video ads, along with banner and text ads across multiple search and social platforms. We also utilize targeted email marketing and a strategic global marketing campaign for brand awareness. We believe that this form of advertising has been and will continue to be effective in attracting subscribers. We continuously monitor and evaluate the effectiveness of specific social media platforms and allocate marketing funds accordingly. We also promote our subscriptions through an established compensated customer referral program. We offer certain subscribers the right to promote the Blackbox System and receive referral fees for subscribers generated from such subscribers’ effort. Generally, we pay referring subscribers $25 for each subscription generated and $25 for each month the subscriber continues their subscription. We incurred $187,781 and $379,353 in customer referral expenditures in each of the years ended December 31, 2023 and 2022, respectively. We expect to continue utilizing the customer referral sales program as it has proven to be an efficient form of advertising. Our advertising and marketing expense was $629,984 and $1,468,702 for the years ended December 31, 2023 and 2022, respectively. We significantly reduced the amount of our digital marketing spend during 2023 as part of an overall expense reduction as well as a review of the effectiveness of certain marketing strategies. We intend to continue to deploy a significant amount of marketing funds on both digital campaigns and customer referral programs in the future. In addition, we may also utilize television and radio advertising.

Our marketing of products targeted toward institutional customers is anticipated to rely less on the current digital marketing that we have historically utilized and is not expected to utilize affiliate marketing strategies.

Industry Partners and Relationships

We have several arrangements and agreements with financial industry partners that encompass marketing partnerships, educational resources and licenses. We believe our relationship with large well-known brokerage firms enhance our credibility and provide added value to our members. Among these partnerships are marketing agreements with E*TRADE and TastyTrade whereby these firms provide us with a referral fee for new accounts that we bring to them as well as offering our members discounted commissions on options trades. The referral fees are not currently material to our revenue but we believe the that our initial relationship with these firms is significant and provides us with an opportunity to expand these relationships to bring greater value to our members.

We have agreements with E*Trade and TradeStation permitting the integration of our platform with their brokerage platforms. These integrations allow our users to trade directly from our platform using their E*Trade or TradeStation account. In addition, TradeStation advertises our platform to 140,000 users through its webinars and in their internal app store. We believe the ability to enable our members to execute trades with third party brokers without having to leave our platform is particularly valuable to options traders who are able to execute more complicated orders without having to re-enter option contract information on another platform. We intend to integrate our platform with other brokers.

Industry partnerships such as the one we have with Options Industry Council, a non-profit entity funded by the Options Clearing Corp. also help provide our members with added educational benefits.

Data Suppliers

We contract with data suppliers and aggregators to provide our subscribers real time access to most major newswires, historical charting data and the real time stock and options data that drive the backend algorithms. We currently maintain servers connected with our stock and options data provider and utilize an Amazon Web Services (AWS) network as a backup.

Intellectual Property

We rely on a combination of trademark and copyright laws, trade secrets, confidentiality provisions and other contractual provisions to protect our proprietary rights, which are primarily our brand names, product coding and marks. The Company has registered its name and logo with the United States Patent and Trademark Office (“USPTO”) and is pursuing registration of other brand names and marks.  The proprietary portion of the Blackbox System including its coding and methodology is protected by contractual confidentiality provisions of both employees and independent contractors.

Government Regulation and Approvals

We offer our subscribing customers a trading tool and not a trading platform, broker dealer or exchange, and therefore we do not believe we are subject to regulatory oversight by the SEC, FINRA or other financial regulatory agencies. We are not aware of any governmental regulations or approvals required for the marketing or use of our Blackbox System or the services provided.

We are subject to a variety of laws and regulations in the United States and abroad that involve matters central to our business. Many of these laws and regulations are still evolving and being tested in courts, and could be interpreted in ways that could harm our business including, but not limited to, privacy, data protection and personal information, rights of publicity, content, intellectual property, advertising, marketing, distribution, data security, data retention and deletion, and other communications, protection of minors, consumer protection, telecommunications, product liability, taxation, economic or other trade prohibitions or sanctions, anti-corruption law compliance and securities law compliance. In particular, we are subject to federal, state and foreign laws regarding privacy and protection of people's data. Foreign data protection, privacy, content and other laws and regulations can impose different obligations or be more restrictive than those in the United States. U.S. federal and state and foreign laws and regulations, which in some cases can be enforced by private parties in addition to government entities, are constantly evolving and can be subject to significant change. As a result, the application, interpretation and enforcement of these laws and regulations are often uncertain, particularly in the new and rapidly evolving industry in which we operate and may be interpreted and applied inconsistently from country to country and inconsistently with our current policies and practices.

Competition

We operate in a highly competitive environment. Although, we believe that our Blackbox System is the only platform that has successfully merged a comprehensive analytics system or “scanner” and a social media platform within the same “dashboard” allowing members to view the same real-time data in parallel, there are a number of companies that offer one or more features that are similar to or attempt to address the same market as we do. Some of these competitors have financial and other resources that are significantly greater than ours. The greatest amount of competition exists within products that provide trading analytics often referred to as “scanners”. We compete with these entities based on a number of factors including price, ease of use, standard features and proprietary features (if applicable). Ultimately, we believe the primary factor used in evaluating the trading analytics by any platform is the user’s ability to derive actionable information from that platform. This is where we believe our proprietary features differentiate the Blackbox System.

In addition to these technical tools, there are also a number of social media platforms that provide forums for traders and investors at little or no cost. The integration of our social media component within our platform creates a community that we believe is significantly superior to stand alone social media sites. Our members are able to interact and discuss ideas while viewing the same dashboard as opposed to having to switch back and forth between applications.

The final component to our platform is education. There are numerous standalone investment and trading applications, books, seminars and courses offered at many different price points. These products compete based on price, perceived value, level of sophistication and reputation among other factors. We offer our courses at no additional charge to our subscribers. In addition, we believe that our social media community provides our more experienced traders the opportunity to mentor newer traders which in turn contributes to the community environment we have developed.

In spite of these factors that differentiate us, we believe the following companies may be considered competitors due to similar product features and retail price points: Trade Ideas, Flow Algo, Unusual Whales and Trade Alert. Companies with social media platforms dedicated to financial markets include Stock Twits and Wall Street Bets.

Employees

As of May 3, 2024, Blackboxstocks had ten full-time employees. We also currently have eighteen contract workers that primarily serve as team traders on our Blackbox System platform or developers.

None of our employees are represented by a labor organization, and we are not a party to any collective bargaining agreement. We have not experienced any work stoppages and consider our relations with our employees to be good.

We believe that our future success will depend in part on our continued ability to hire, motivate and retain qualified management, sales, marketing, and technical personnel. To date, we have not experienced significant difficulties in attracting or retaining qualified employees.

Properties

Blackboxstocks does not own any real estate or other physical properties. The company’s principal office is located at 5430 LBJ Freeway, Suite 1485, Dallas, Texas 75240 in office space leased from Teachers Insurance and Annuity Association of America. During the years ended December 31, 2023 and 2022 we incurred approximately $126,000 and $103,000, respectively, in office rental expense. Future minimum rental payments under the extended lease are approximately $441,851.

Blackboxstocks believes that the existing facilities will be adequate to meet its operational requirements through 2024. We believe that all such facilities are adequately covered by appropriate property insurance.

Legal Proceedings

Blackboxstocks is defendant to a lawsuit filed by Feenix Payment Systems, LLC before the New York State Supreme Court, County of New York. The plaintiff seeks damages in the amount of $500,000 from an alleged breach of an exclusivity agreement between the plaintiff and Blackboxstocks. Blackboxstocks denies any liability for the alleged breach and intends to defend the matter vigorously. Blackboxstocks has asserted a counterclaim alleging the plaintiff failed to pay Blackboxstocks a finder’s fee.

Blackboxstocks currently is not subject to any other material litigation nor, to management’s knowledge, is any material litigation currently threatened against Blackboxstocks other than routine litigation and administrative proceedings arising in the ordinary course of business.

Corporate Information

Blackboxstocks’ principal executive offices are located at 5430 LBJ Freeway, Suite 1485, Dallas, Texas 75240, and its telephone number is (972) 726-9203. Its website is https://blackboxstocks.com. The information on, or that can be accessed through, its website is not part of this information statement/prospectus. Blackboxstocks has included its website address as an inactive textual reference only.

Additional Information

Blackboxstocks files annual reports on Form 10-K and quarterly reports on Form 10-Q with the Securities and Exchange Commission (the “SEC”) on a regular basis, and discloses certain material events in current reports on Form 8-K. Its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act are available free of charge on its investor relations section of its website as soon as reasonably practicable after it electronically files such material with, or furnishes it to, the Securities and Exchange Commission ("SEC"). The SEC also maintains an Internet website that contains reports and other information regarding issuers, such as Blackboxstocks, that can be filed electronically with the SEC. The SEC's Internet website is located at http://www.sec.gov. The inclusion of any website address in this information statement/prospectus is an inactive textual reference only, and information contained on or accessible through these websites is not a part of this information statement/prospectus.

For information on management’s discussion and analysis of financial condition and results of operations of Blackboxstocks, see Part II. Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Blackboxstocks Annual Report on Form 10-K, which are incorporated by reference herein.

For further information, please read the section entitled “Where You Can Find More Information & Incorporation by Reference” of this information statement/prospectus.

INFORMATION ABOUT EVTEC

Overview

Evtec Aluminium Limited (“Evtec”), is a company which specializes in the design, manufacture and supply of aluminium parts and tools to its principal customer, Jaguar Land Rover (“JLR”), Britain’s largest automotive manufacturer, and other Tier 1 suppliers leading Original Equipment Manufacturers (“OEMs”) in the UK. Evtec aims to develop lightweight engineered solutions to the automotive sector; including parts with extreme performance, durability, and lightweight construction in mind.

Evtec is attractive to Original Equipment Manufacturers, such as JLR, because it provides a complete solution by offering both foundry and machining capabilities, as well as in-house engineering capabilities to be able to develop tools which will be used in JLR’s global facilities for assembly of new hybrid and electric vehicles. Evtec operates from two sites in the United Kingdom (UK), one in Coventry and one in Kidderminster. Both sites are located in the ‘West Midlands’, an area of the United Kingdom, recognised as a traditional automotive manufacturing centre. Evtec’s Kidderminster site is a High Pressure Die Casting (“HPDC”) foundry, the most modern one of its type in the UK, producing strong, light weight complex aluminium parts for use in traditional internal combustion engines (“ICE), hybrid engines and electric power units such as motor housings and electronic drive units. The parts produced in Kidderminster are transported daily to Chelmarsh, Evtec’s site in Coventry, which houses one of the UK’s largest machining facilities, where the cast parts are machined and sequenced for delivery to its OEM customers on a ‘Just in Time’ basis.

Evtec’s sites are located nearby to JLR’s headquarters in Coventry and JLR’s iconic plant in Solihull where Land Rover has manufactured its pioneering vehicles since 1947. Evtec’s infrastructure and geographic location means that it is perfectly located to provide “Just in Time” delivery capability to OEMs and other automotive suppliers in the United Kingdom, which has become increasingly important in a new era of supply chain shocks and geopolitical problems, which has led to widespread disruption across the automotive industry.

Currently, Evtec produces aluminium parts and tooling required for JLR’s existing range of vehicles fitted with an Internal Combustion Engine (“ICE”) and also used in Hybrid models, and delivers, on average, approximately 130,000 parts per month to JLR and its wider supply chain. Evtec’s revenue for the year ended June 30, 2023 reached $30.9 million compared to $14.4 million for the year ended June 30, 2022, an increase of 115%. Revenue for the six months ended December 31, 2023 was $21.3 million compared to $13.9 million for the six months ended December 31, 2022, an increase of 53%. Evtec is continuing to increase productive capacity to meet the needs of planned new hybrid and electric drive vehicles being developed by JLR. Total projected revenue for the year ending June 30, 2024, is expected to be $52 million compared to $30.9 million for the year ended June 30, 2023, an increase of $21 million. Earlier this year, Evtec announced that it had been awarded a supply agreement worth $67 million for the provision of aluminium parts to JLR, which would be utilized in JLR’s new range of hybrid and electric vehicles set to enter production in the coming years. Management expects that Evtec will capitalise over the coming years on progressive introduction of electric and hybrid vehicles, as such vehicles will be more aluminium intensive, as part of lightweighting strategies designed to reduce carbon emissions and to improve performance. Aluminium is a key strategic metal for automotive makers being not only light weight but also resilient and strong and will be used extensively on both car chassis and bodies as well as assemblies and components.

In addition to delivering on its strong order book with visibility through to 2029, management will focus on identifying future opportunities to undertake strategic acquisition(s) and investment(s) into suppliers currently operating within the Luxury, Performance, Hybrid and Electric Vehicle (“EV”) automotive supply chain. Management will seek to identify suppliers which have, amongst other things, a strong order book through to at least 2032, suppliers to large OEMs (with embedded relationships) and which are engaged in the supply of crucial components capable of being sold in significant volumes.

History and Current Operations

David Roberts, the Chief Executive Officer, President and founder of Evtec, is a veteran industrialist with over 40 years’ experience in the automotive and aerospace industry working in Europe and North America.

On May 7, 2020, Arlington Automotive Limited (“Arlington Automotive”), a key parts manufacturer and supplier to JLR, appointed an administrator. David Roberts, supported by JLR, acquired the business and assets of Arlington Automotive through a newly incorporated company, Evtec Automotive Limited (“Evtec Automotive”). This acquisition prevented the closure of the Coventry plant, rescuing 200 jobs, and averting supply chain disruption to JLR. Historically,.

Following the successful acquisition of the Arlington Automotive business, JLR approached David Roberts to consider acquiring the foundry and machining business located at Coventry and Kidderminster operated by Liberty Aluminium Technologies Ltd (“LAT”). LAT employed approximately 200 employees across both sites and had a significant order book for aluminium parts required by JLR (although such anticipated orders are subject to change in any financial year depending on demand for vehicles). Historically, LAT supplied parts to many UK based OEMs, including Ford, and Evtec expects to cement these customer relationships as it builds out capacity at its production sites.

Evtec was incorporated on February 5, 2021 with David Roberts as its sole director and major shareholder. Evtec (as purchaser) entered into two asset purchase agreements with Liberty companies (as the vendors) to acquire the trade and key assets of those companies associated with the operators of the factories at Kidderminster and Coventry for an undisclosed sum (the “Acquisition”). The Acquisition completed on November 18, 2021. Praetura Commercial Finance, the Manchester-based asset-based lender, supported the Acquisition with a £11.4 million asset-based lending facility.

Following the Acquisition, David Roberts and the management team have completed a significant restructuring of the business, and are on-track to deliver a successful turnaround. Evtec has been primarily engaged in supplying aluminium parts to JLR required in the production of their ICE vehicles. Evtec has demonstrated that with the business under new management, it is capable of supplying on average 130,000 parts per week directly to JLR and customers within its supply chain from its current foundry and machining capacity. Evtec has been able to double the supply of aluminium parts since the Acquisition by focusing on plant and equipment operational availability, and implementation of lean manufacturing throughout the business. As a result of this increase in production, sales have doubled, customer quality issues have been minimised, and the business consistently delivers on time in full. Evtec expects to supply parts directly to other European OEMs including Ford, Bentley, Aston Martin and McLaren, either directly or through intermediate suppliers, as production capacity at Kidderminster and Coventry sites grows in the future following completion of the Exchange and from obtaining sufficient capital investment to support its growth.

Key Strengths

Experienced Management Team

The key management team at Evtec is comprised of David Roberts (Chief Executive Officer and President), Keith Stanton (Group Managing Director), and David G. Roberts (Group Finance Director) whom together have more than 100 years of combined experience working in the automotive, aerospace and manufacturing industries. The management team is supported by an experienced team of independent non-executive directors, led by Steven Norris as Chairperson, and supported by Steve (“Steve”) Ilott, Julia Steinbrenner and Anil Khurana.

Evtec is led by David Roberts as Evtec’s Chief Executive Officer and President. Mr. Roberts has over 40 years’ experience in manufacturing, particularly within the automotive and aerospace industry. Mr. Roberts serves as Chair for several companies, including, Evtec Automotive (since 2021) (a UK tier 1 auto parts supplier), JVM Castings Limited (since 2023) (a UK tier 1 auto parts supplier), Evera Recruitment Ltd (Europe’s leading recruitment company in the EV and battery sector) (since 2020) and Evtec Energy Solutions Limited (a green renewables provider of energy systems) (since 2020). David has been a non-executive director of Tevva Motors Limited (a UK EV Truck OEM) since 2020 and until recently served as Chair of Warwick Acoustics Limited (advanced audio systems) (2018-2022), TAE Power Management (2021-2023) and Rimstock Limited (“Rimstock”) (a UK tier 1 auto parts company) (since 2016). He also serves as Board Advisor to Coventry University Advanced Manufacturing Facility and is an Export Ambassador for the Department of International Trade. He attended the University of Hull obtaining a BSc (Hons) in Economics (1970-1973).

David G. Roberts, Evtec’s Group Finance Director (“principal financial officer”), is an experienced finance executive with extensive experience in both public and private companies in the automotive and aerospace supply chain industry. Qualifying at EY (1991-1995) he has held senior executive roles such as Divisional Finance Director at Britax International plc (1995-2001), European Finance Director at Titanium Metals Corp (a USA NASDAQ company) (2001-2013), Group Finance Director at Chamberlin plc (an iron foundry AIM listed company) (2013-2018) and Chief Financial Officer at Bladon Micro Turbines (since 2019). Mr. Roberts holds a BSc in Accounting from the University of Hull (1988-1991). He is also a fellowship member of the Institute of Chartered Accountants in England and Wales (ICAEW) (1994) and a member of the Association of Corporate Treasurers (2004).

Keith Stanton, Evtec’s Managing Director, has over 35 years’ experience of managing large manufacturing operations in the automotive industry. Mr. Stanton has held Senior Executive positions with Ford and Aston Martin where he served as COO and interim CEO for over 14 years. He has served as the Evtec Group’s Managing Director and a member of the Board since April 2020. Prior to that, he has served as Vice President and Chief Manufacturing Operations Officer from 2016 to 2021 and as Manufacturing Operations Director between 2006 and 2016, at Aston Martin Lagonda Ltd. Mr. Stanton has also served as the Executive Director of Global Purchasing and Business Improvement from July 2005 to April 2006 at LDV Ltd. He has also served as the Operations Director at Ford Motor Company Ltd between 2001 and 2005. Mr. Stanton holds an MBA from City of London University (2000-2002), and an HND in Electrical Engineering from Chatham Naval Academy (1978-1982).

Non-Executive Directors

Steven Norris is the Chairman of Evtec Automotive since March 2021. Mr. Norris has been in the automotive industry for more than fifty years including time with Ford of Britain, as a dealership owner and as a leading advisor on transport policy. Mr. Norris is a former member of the UK parliament (1983-1997) and for five years was Minister for Transport (1992-1997). He is a former Chairman of the Prince Michael International Road Safety Awards and was also Director General of the UK Road Haulage Association. He is currently Chairman of Empati.ai and a Director of Pegasus Digital Mobility Corporation Inc. Steve was a co-founder of ITIS Holdings plc (now INRIX) and of Speed Check Services (now Jenoptic plc). Mr. Norris holds an Honorary Doctor of Laws from the University of East London (2008), and an MA (Hons) in Jurisprudence from the University of Oxford (1964-1966).

Julia Steinbrenner is the Co-President of the New York Yankees Tampa Foundation since February 2015 and serves on a number of boards in the region. Ms. Steinbrenner has also been the Co-President of Steinbrenner Racing since March 2021. In 2019, Julia co-founded the George4Foundation and serves as the organisation’s Executive Director. The George4Foundation’s mission is to make a difference in the lives of underprivileged and sick children and their families – and to make an impact in education, paediatric medical research, and the ongoing national hunger crisis.

Dr. Anil Khurana is a successful global business leader and executive, with expertise in multiple B2B, digital, and climate-tech industries. He started his career with Indian Railways in 1983, and has 40 years of experience in innovation, manufacturing, public policy, and private equity, and has run businesses and advised chief executives, investors, boards and governments around the world. Between April 2019 and June 2022, Dr. Khurana was a senior Partner with PwC Strategy& and global managing partner of PwC’s industrials, manufacturing & automotive business unit (which includes consulting, transactions, tax, and accounting services). Since May 2023, he has been the Executive Director at the Baratta Center for Global Business at Georgetown University, where he leads research and activities on cross-border investing, global value chains, and AI & jobs. He also leads manufacturing, climate-tech, and competitiveness initiatives in MA, the US, and globally (US DOE, DOD, GMIS, others), and is Chairman of The Indus Entrepreneur (TiE) Advanced Manufacturing Special Interest Group. Dr. Khurana holds a Ph.D. from University of Michigan (1988-1993), an MBA from University of Michigan (1988-1991), an M.A. in Economics from Panjab University, India (1983-1985), and a B.Eng. in Mechanical/Industrial/Electrical Engineering from the Indian Railways Institute of Mechanical and Electrical Engineering, India (1979-1983). Dr. Khurana is qualified to serve on the board of directors of the Company due to his business and technical expertise.

Stephen Ilott serves as a non-executive director. He has over 35 years investment markets experience. Mr. Ilott served as Chief Investment Officer for BMO Asset Management in both the US and Canada, from January 2016 to May 2021. He brings a wealth of individual and corporate management experience having held leadership, executive management and board positions in regulated financial companies across the UK, Europe, US and Canada. Mr. Ilott has also been a director of Pineview Stansted Limited and Pineview Thaxted Limited since 2011.

Management believes that their combined knowledge and expertise of the automotive supply chain sector, and their strong relationship with OEMs, such as JLR, and other Tier One Suppliers, will provide Evtec with a competitive advantage.

The collective experience and relationships with OEMs are expected to put Evtec in a strong position to demonstrate that they are capable of acquiring and reviving the fortunes of distressed suppliers within the automotive sector, as well as enabling the company to expand its offering to a wider number of OEMs and intermediate suppliers to OEMs in Europe as the business develops its capacity.

Market Conditions are creating unique opportunities to acquire distressed suppliers with strong order books within the Automotive Sector

OEMs continue to weather economic headwinds, such as inflation, and widespread supply chain disruption. OEMs have learned the hard way from the pandemic, lockdowns and microchip shortages that it is a necessity to review and maintain robust and secure supply chains to maintain production targets and to drive profitability.

Current market conditions are such that suppliers face significant macroeconomic challenges, including, rising energy costs, stubborn inflation, recessionary risks, unpredictable fuel, and commodity pricing, and rising interest rates. The market is generally characterized by thin margins. Suppliers are carrying a significant amount of debt in the wake of a pandemic-related squeeze across the automotive value chain, and the cost of borrowing has risen dramatically. Suppliers have also been impacted by a significant rise in energy costs associated with the war in Ukraine and other geopolitical issues.

Evtec management believes that because of the current economic outlook there is a likelihood that several suppliers to OEMs will struggle to operate profitably with decreasing margins, increasing the chances that such companies may be put up for sale by their owners at weak valuations or that such companies may enter into administration. This will present opportunities for Evtec to consider undertaking an acquisition of distressed suppliers, ideally, with the close co-operation of related OEMs.

First-Class Facilities equipped to meet the needs of OEMs

Evtec boasts advanced foundry machining capabilities and operates one of the largest machining facilities in the UK. This means that it can provide a complete solution to its customers in relation to both the casting and machining of aluminium parts, as well as the expertise of in-house engineers capable of designing specialist tools. Management believes that its ability to offer a complete service, distinguishes it from other suppliers and provides added assurance to OEMs that a single supplier is responsible for the quality of build from production to when it reaches the assembly line.

Increasing Demand for Aluminium Parts

Evtec specializes in the casting and machining of aluminium parts required by JLR and other intermediate suppliers to OEMs in Europe. Evtec therefore operates within a niche area of the supply chain network for the automotive industry where there is likely to be increasing demand.

New EV and hybrid powertrains have already driven the need for lighter weight material construction vehicles, to extend autonomy and performance, with greater torque and strain on individual components. Evtec will not only cater to the needs of the industry today for ICE and Hybrid vehicles but is at the forefront of a generational transformation in manufacturing through engineering and manufacturing of high performance, light weight components and assemblies.

As at the end of January 2024, it was estimated that 14.7% of all new cars on the road in the UK were electric cars. Despite the UK Government announcing a delay to the ban on new petrol and diesel cars being pushed back from 2030 to 2035, firms will still be required to meet strict quotas and at least one in five cars sold must be zero emissions models from 2024. Management believes that there will be growing demand from OEMs to utilise aluminium components in automotive manufacturing. The average aluminium content has risen steadily over the last few decades and is accelerating along with the rising penetration of EVs and hybrid models. A life cycle analysis of a full-steel and a full-aluminium EV shows that an aluminium EV emits 1.5 tonnes less in greenhouse gas emissions over its complete life cycle compared to a steel EV. EVs have a higher aluminium content than a traditional ICE vehicle, and significantly more aluminium is used in an EV platform.

Evtec therefore believes that it will benefit both from, a growing need for aluminium supporting the adoption of EV vehicles and increasing usage of aluminium in ICE vehicles, replacing steel components.

Evtec a Critical Strategic Supplier of Aluminium Parts to JLR

Evtec has positioned itself as a critical supplier to JLR for aluminium parts by offering foundry and machining capabilities. On February 2, 2024, Evtec announced that it had secured a supply contract worth an estimated US$67 million linked to the supply of various aluminium parts to JLRs new line of electric vehicles, excluding after market and model life extensions. This contract award underlines Evtec’s importance as a trusted supplier to JLR, while JLR undertakes an ambitious project of moving towards achieving zero carbon emissions for its vehicles by 2036. Management anticipates that new parts will start production in Q4 2024, and will ramp up to peak volumes of 150,000 vehicle sets per annum by 2027.

High Barriers to Entry for Competing Suppliers

Where OEMs experience delays in production, this could impact the financial results of an OEM, and potentially damage the relationship between customers and OEMs, if vehicles cannot be supplied in a timely manner. Furthermore, OEMs are public brands which attract significant media attention and any significant performance issues could attract adverse publicity. OEMs are therefore highly risk averse in respect of the selection and approval of suppliers. Evtec is an established Tier 1 supplier to JLR. Any new suppliers will be subject to a vigorous vetting and accreditation processes. Evtec is a trusted Tier 1 Supplier within the JLR supply chain and has recently been awarded a significant supply agreement to supply aluminium parts to JLR for their new first line of electric vehicles, in recognition of Evtec’s importance to the future supply chain of JLR.

Trend of OEMs Establishing Partnerships with Domestic Suppliers

OEMs typically operate highly complex global supply chains, which have flourished within an increasingly globalized economy. There is an emerging trend of deglobalization within the automotive industry driven by local governments encouraging domestic production and at international level, increasing imposition of tariffs and other protectionist measures aimed at supporting local automotive markets. In addition, the impact of COVID-19 and other supply chain shocks, have encouraged OEMs to ensure that their supply chains are robust and reliable. Evtec management, therefore, believe that Evtec’s location in the United Kingdom, located nearby to JLR’s main assembly line, will help to ensure that it remains a preferred supplier to JLR for aluminium parts and tools, as well as developing customer relationships with other OEMs based in Europe, such as Ford, Bentley, or Aston Martin, either directly or through intermediate suppliers.

Long Term Supply Arrangements with Clear Visibility of Demand

Evtec supplies aluminium parts and spares as a Tier 1 Supplier to JLR and other suppliers within its wider supply chain. Being a Tier 1 Supplier means that Evtec provides parts and tools directly to JLR, without any subcontractors. Evtec has been selected to provide parts for the new electric range of JLRs, range of Jaguars and Land Rovers, which are more aluminium intensive than ICE models. When a new model enters production, they tend to have a lifespan of 10 years. This provides Evtec with an opportunity to establish itself as a long-term single source supplier of aluminium parts and spares to JLR providing clear visibility of demand and a path towards sustainable growth, as JLR gradually phases out ICE models in favour of full electric and hybrid models.

Market Overview

Geopolitical issues have led to a sea change in the organization of the automotive industry

After nearly three decades of expansion, globalization — which has helped fuel economic growth through trade, exchange, and openness — is in retreat. Barriers are going up, and global trade is declining. Protectionism is on the rise. The world’s two largest economies, the U.S. and China, appear to be on a path of continued trade confrontation. Actions like Brexit, Covid and punitive trade wars are making economies more isolated than not and while it is too soon to quantify the extent and duration of the disruption resulting from the crisis in Ukraine, it is already clear that the ripple effects will be immense and long-lasting. A long-term realignment of supply chains is underway. The biggest near-term implication will be increased economic friction, reversing more than two decades of falling prices and access to cheap goods.

As a result of the learnings from a complete shut down during the COVID pandemic, compounded by geo-political tensions in Ukraine, Taiwan, China, etc. the supply chain revolution to ‘near source’ is in full swing, creating a unique opportunity. OEMs are being forced to rethink their supply chain and eliminate risk and weaknesses by going from a ‘Just in Time’ model to a ‘Just in Case’. Geo-political changes in Ukraine and tensions in Taiwan coupled with trade tariffs in the EU and UK that will impose a 10% cost to OEMs on vehicles not 45% local sourced by 2027, are driving local sourcing decisions. The economics are aligned to create a capital light opportunity to acquire distressed assets with committed order books to drive economics and investment return.

Governments around the world are incentivizing companies to source locally by imposing taxes and tariffs for imported products as de-globalization continues to set in as a ‘new normal’. The EU/UK have increasingly draconian penalties for OEMs to meet “Country of Origin” sourced targets.

COVID-19, the war in Ukraine, and other geopolitical events, have had a negative adverse impact on the car industry and it has been difficult for OEMs to obtain parts. Recently, UK manufacturers have been impacted by the Red Sea crisis which has delayed the delivery of raw materials components and other goods through the Suez Canal. The Suez Canal handles approximately 12% of global trade. As a result of this, car manufacturers have increased their inventory to address the risk of stocks running low, particularly with components that are traditionally shipped from Asia.

It has been noted that a number of OEMs have, in response to supply chain disruption, shifted from a just in time model to a just in case model, with OEMs holding more stock to cushion the impact of unexpected shocks to supply chains. Historically, OEMs have operated a just in time model for the purpose of managing cost by reducing wastage and additional costs incurred by the requirement for additional storage and warehousing of parts. In recent years, the shortage of semiconductors and other crucial components, had led to a reduction in the overall output of vehicles.

Lightweighting Strategies and Environmental Factors increasing demand for Aluminium Components

The United Kingdom is committed to achieving net zero carbon emissions by 2050. The automotive industry in the United Kingdom and internationally will be required to adopt measures to reduce the carbon dioxide output of its vehicles. This will mean that OEMs will steadily phase out the ICE and these will be replaced by the next generation hybrid and electric drivetrains. The pace and timing within which the ICE is phased out in favor of hybrid and electric drivetrains depend upon a complex number of factors, including (but not limited to):

OEMs will need to adopt strategies in respect of the use of materials that will help to decrease carbon emissions, and which are also capable of being recycled and which are generally less impactful on the environment. It is estimated that approximately 90% of the aluminium content included in a car is capable of being recycled.

Approximately 75% of fuel consumption is linked to vehicle weight. One of the main strategies employed by OEMs to reduce carbon emissions is therefore linked to reducing the overall weight of the vehicle. It has been a conventional strategy in the automotive sector to substitute steel components for aluminium components. Aluminium offers a lower-weight alternative to steel, and it fits greatly into a circular economy since it is highly recovered and reused. According to European data the amount of aluminium increased from 50 kg per vehicle in 1990 to 151 kg currently, with a projection of 196 kg per vehicle by 2025.

Aluminium is typically required for the following sections of automotive vehicles: the engine, transmission, wheels, heat exchangers, chassis, and suspension. The major technology of manufacturing the automotive components from aluminium is casting. High-pressure die casting (“HPDC”) offers benefits compared to other production technologies, such as chill casting or sand casting, through significantly lower production times for individual parts while ensuring high repeatability, a broader range of shapes, and lower individual cost.

Consumers of electric vehicles are also concerned by the range that an EV can cover on a single charge. The use of aluminium sheet battery enclosures, for example, can help extend the driving range, allowing vehicles to travel up to 10% further on a single charge.

Aluminium is considered a preferred material for EVs, as it offers value in terms of the manufacturing costs, weight savings, and performance, with cooling solutions, battery frames, and components now routinely manufactured from aluminium. The Directors are aware that other innovative materials may also offer an alternative to aluminium, such as composite materials which are used in high-performance sports cars. However, aluminium remains the material of choice for volume production, and management expect this trend to continue.

Evtec is therefore able to take advantage of two trends - the increasing use of aluminium in ICE vehicles (replacing steel components) and the increase of aluminium in the production of hybrid and EVs which are likely to be of much greater aluminium intensity.

Growth in Luxury Car Market and Demand for EV Vehicles

Evtec’s financial performance is linked closely to the UK automotive market and the financial performance of JLR, which competes within the luxury car sector amongst other distinctively British OEMs such as, Bentley, Rolls Royce, and Aston Martin. The automotive industry is a crowded market space and most European OEMs face strong competition from overseas manufacturers. As at August 2023, it was estimated that European OEMs still hold 71 percent of global sales, while OEMs in other jurisdictions, such as China, continue to grow. The Society of Motor Manufacturers and Traders’ (“SMMT”) estimates that the UK automotive sector was on course at the end of 2023 to reclaim its position as a £100 billion plus trading hub. OEMs and suppliers are realigning their business models around increasing EV adoption.

JLR is one of the largest car manufacturers in the United Kingdom, which accounts for approximately 780,000 jobs in its car factories, wider supply chain and sales industry. JLR is an anchor customer for Evtec and various other suppliers operating in the British automotive supply chain.

On April 19, 2023, JLR announced its plans to invest £15 billion over five years in JLR’s industrial footprint, vehicle programs, autonomous, AI and digital technologies and people skills. This includes, announcing its road map for the release and production of its electric vehicles. Halewood in Merseyside will become JLR’s first all-electric car plant, a historic step into the electric era. JLR has therefore made it clear that it remains invested in maintaining its vehicle manufacturing facilities, an engine manufacturing centre, and a battery assembly centre in the UK.

On February 2, 2024, JLR released its Q3 2024 earning statement, noting that sales had reached record levels for the quarter, recording the highest quarterly profits since 2017 and that there was over 16,000 sign-ups by customers for its new Range Rover Electric. It was also noted that sales of highest specification Range Rover SV with average price of £202,000, had grown year-on-year with 3,637 year-to-date sales, surpassing 1,909 Range Rover SV’s sold in FY23.

Competitors

At present, Evtec is focused on serving the requirements its primary customer of JLR (as an OEM) and other Tier 1 suppliers to OEMs such as JLR in the United Kingdom. Evtec’s strategy is to focus on the aluminium automotive supply chain serving large luxury OEMs within Europe such as JLR, Ford, Bentley, Aston Martin and McLaren (either directly or through intermediate suppliers). At present, Evtec does not have plans to directly supply OEMs outside of the United Kingdom other than through intermediate suppliers to OEMs. For example, large OEMs in Germany, such as Volkswagen and BMW, are well served by various domestic suppliers. Evtec works closely with JLR to develop aluminium parts and tools that will be used in the production of ICE vehicles (currently in production) and in new hybrid and EV models produced over the coming years. The Evtec management team have a proven track record in turning around failing businesses. Within Automotive supply chains there are many vendors who have been unable to react to the changing business environment as a result of Brexit and Covid, and future opportunities for growth may come from outside the aluminium supply chain.

Management believes that it may face competition from other supply parts manufacturers described below.

Ryobi Aluminium Castings (UK) Limited is a producer of aluminium components using the high pressure die casting process for the automotive industry. It operates in Carrickfergus, Northern Ireland but also from locations such as Japan, China, USA, Mexico, Thailand and Europe. Its UK subsidiary has around 500 employees and its latest turnover in the financial year ended 2022 was £81m.

Norsk Hydro ASA, an aluminium and renewable energy company has 33,000 employees in more than 140 locations and 40 countries. Hydro operates in a number of locations in the UK which consist of manufacturing plants, fabrication and components, extrusion die, casthouses, surface treatment, thermal break, building systems and pole products.

There is a risk that Evtec could face competition from suppliers that operate a lower cost operating model, such as automotive manufacturers located in China with typically lower labour costs. Evtec has developed a reputation for supplying parts to JLR in recent years, but there are larger and better capitalized international automotive companies, such as those companies described above, whom Evtec would be unable to compete with purely on cost.

Management nevertheless believes that it remains competitive due to the risk averse nature of OEMs to use alternative or untested suppliers and extremely high barriers to entry. Evtec has an established track-record of delivering on orders placed by buyers and meeting the volume order requirements demanded by JLR to ensure that there is no delay in production. The Evtec facilities are within 30 minutes of JLR vehicle and engine plants, and it offers unparalleled ability to respond to its customer’s needs.

Business Strategy

Evtec’s main commercial objective is to retain and build upon its relationship as a trusted Tier 1 supplier of aluminium parts to OEMs such as JLR, and other intermediate suppliers to OEMs.

Evtec is currently loss making, having recorded a loss of £(4.9) million for its fiscal year ended June 30, 2023, and it is aiming to become a profit generative business built upon a sustainable platform of orders from key customers. Evtec management, using appropriate industry forecasting methodology and based on Evtec’s agreements with JLR and existing Tier 1 supplier customers, has a forward-looking order book through to July 2029 and beyond. Customers of Evtec provide management with detailed forecasts and estimates of its demand for parts linked to programme agreements. The anticipated orders (agreed in committed forward order schedules) are not binding purchase orders, and are subject to change in any financial year depending on demand for vehicles produced by the relevant OEM. These forecasts include estimated and peak production volumes by vehicle on a weekly basis for the expected life of each programme as detailed by written agreement between Evtec and the customer. The actual amount of demand for Evtec’s parts is dependent upon the actual sales of vehicles incorporating Evtec’s parts, the actual length of the production run of that vehicle, seasonal and other production variances and other factors. The actual amount and timing of sales of any parts pursuant to a written agreement with Evtec’s customers may differ significantly from Evtec’s calculations based on these factors as well as others that are outside of the company’s control. Management applies discounts to these forecasts as they deem appropriate in their reasonable opinion and updates such forecasts regularly. In relation to existing parts that Evtec supplies, between July 1, 2024 and June 30, 2025, the Company expects to meet orders worth in aggregate £35.1 million. This is based on forward order schedules for existing parts agreed with customers. In relation to new parts that Evtec has commitments for from customers, the Company expects to meet orders worth in aggregate £457 million, rising from £10.2 million per annum in fiscal years 2024 and 2025 to £64.4 million in fiscal years 2027 and 2028. This is based on forward order schedules for new parts agreed with customers. In aggregate, the Company has a forward looking order book of in aggregate £540.5 million (being the aggregate of the order books for existing parts and new parts).

To ensure that Evtec maintains its position as a Tier 1 supplier to JLR and a trusted supplier to other intermediate suppliers to OEMs (who supply globally recognized OEMs, such as Ford) it must ensure that it can deliver aluminium parts and tools to its customers, free from defects, in a timely manner, and in the volume required on a consistent basis. By increasing production capacity at its sites this will enable Evtec to serve the requirements of other OEMs and other intermediate suppliers to OEMs. To meet demand, Evtec will be required to:

Furthermore, Evtec will need to ensure that it manages and controls costs within its own supply chain to ensure that it maintains and improves profitable margins. The primary costs and expenses associated with the operation of Evtec’s business are as follows:

Growth Opportunities

Evtec management believes that its segment of the automotive sector is currently underserved by other Tier 1 suppliers and is a global market with significant scale opportunities.

Evtec is focused on the Luxury, Performance, Hybrid and EV automotive supply chain revolution, as well as continuing to satisfy existing demand for ICE vehicles. The Management team will seek to identify, and acquire, opportunistic mission critical, supply chain assets at distressed valuations with strong order books from 2024 to 2032 for mostly single sourced parts.

EV markets are growing rapidly and efficient supply chain is a fundamental requirement for success. OEMs will be attracted to efficient suppliers of key strategic assemblies and components. Evtec in particular, because of their lower total cost of supply (“TCS”) channel, is already demonstrating the business model assumptions with significant confirmed order intake and target opportunities for acquisition.

Evtec aims to develop strong partnerships with OEMs. Management believes that the management team’s credentials and the performance of Evtec, will result in Evtec being nominated by OEMs as the preferred buyer of strategic parts and by demonstrating its ability to increase its production capacity at various sites that it can adequately satisfy the requirements of a wider customer base.

Part of the strategy for the Combined Company is to undertake strategic and complementary acquisitions of UK and US single-source suppliers to OEMs. Therefore, the intention of the directors of the Combined Company is to pursue the acquisition of the remaining stock of Evtec Group Limited resulting in the Combined Company owning the entire issued share capital of Evtec Group Limited. This acquisition, if consummated, would increase Evtec’s current pool of customers to include other prominent OEMs, including Ford, Bentley, Aston Martin and McLaren. However, the directors cannot guarantee that this acquisition will take place as it remains subject to agreement of commercial terms and potential approvals by the board, shareholders and regulatory authorities.

Relationship with Customers

Evtec supplies directly to JLR and other Tier-1 suppliers to OEMs in Europe.

Customer Requirements

JLR is recognised around the world as the owner of two distinctive British brands, Land Rover and Jaguar.

JLR has set itself the objective of offering pure electric vehicles by 2030 and it has the further aim of achieving net zero carbon emissions across its supply chain, products, and operations by 2039.

Manufacturing operations are at the heart of JLR’s value chain and any losses in the scheduled production and delivery of parts could have a detrimental impact on its financial performance, client delivery and satisfaction. Consequently, it is vital for the JLR business that components that are used in the supply chain are delivered on time, in sufficient volumes and which are free of defects. JLR is therefore focused on ensuring that supply chain risks are minimised so far as practicable.

Evtec’s operations are therefore a critical component in providing a ‘Just in Time’ or a ‘Just in Case’ model required by JLR to ensure that there is no disruption to production of its vehicles.

JLR and Evtec rely on Electronic Data Interchange (“EDI”) for the purpose of sharing accurate data of the exact quantity of parts required by JLR daily. JLR uses EDI to communicate to Evtec any planned changes in production schedules or any urgent requirements that will need to be met by Evtec. Reliance on EDI, as opposed to manually automated processes, reduces the risk of human error and miscommunication, which could cause delays in the delivery of parts required by JLR to ensure that there are no delays in its manufacturing and assembly processes.

Customer Arrangements

Evtec’s financial performance is inextricably linked to delivering on its existing commercial arrangements with JLR, ensuring that components are delivered on time and without defects.

Evtec have entered into several sourcing and commercial programme agreements with JLR (“Programme Agreements”). Evtec is currently contracted to supply aluminium parts for ICE vehicles currently in production with JLR.

Under the terms of the Programme Agreements, Evtec has been nominated as a Tier 1 Supplier for the purposes of supplying crucial parts that will form part of the construction and build of the current and next generation of Land Rovers and Jaguars. Currently, Evtec supplies the following parts directly to JLR: cam carriers, inter and double caps, VCT cover, sumps and the following parts via another supplier: rear transmission cover, tube assembly, rear ETM cover and rear carrier. Pursuant to the new Programme Agreements, Evtec will also be responsible for the delivery of the parts such as: oil pans/oil reservoirs, mounting tray brackets for large electric drive units (“EDUs”), frame corner castings as part of the modular longitude architecture (“MLA”) battery programme (as part of the shift to fully electric vehicles), cam carriers and main housings, transmission covers and cover castings for the compact electric drive unit (“C-EDU”) programmes.

The Programme Agreements are generally entered into significantly in advance of the vehicles (for which such parts supplied by Evtec are required) entering commercial production. Once the Programme Agreements are entered into, JLR goes through an internal programme approval process. Once the internal programme approval has been achieved and is released, JLR issues to Evtec one or more purchase orders for the parts and tools specified within the Programme Agreements. Purchase orders specify the price, quantity of goods to be purchased and other key terms. In addition to the Programme Agreements and the purchase orders, the relationship between Evtec and JLR is governed by JLR’s standard terms and conditions and code of conduct.

Set out below are key features of the relationship:

Obligations and Arrangements with JLR as a Tier 1 Supplier

JLR is dedicated to establishing a supply chain which is sustainable, ethical, and resilient to ensure that it can reach its ambition of achieving carbon net zero goal by 2039 and 2030 CO2e reduction target. JLR is a member of Drive Sustainability (“DS”) which is an automotive partnership amongst several leading car manufacturers (including, Ford, Mercedes-Benz and BWM) facilitated by CSR Europe, the leading European business network for Corporate Sustainability and Responsibility. DS’s aim is to promote sustainability throughout the automotive supply chain by establishing a common approach throughout the industry.

JLR has committed to reducing greenhouse gas emissions across its own operations by 46%, and 54% per vehicle across its value chain, by 2030, and it is aiming for a net zero carbon emissions across supply chain, products, and operations by 2039. This will be accomplished by bringing into production exciting new ranges of hybrid and fully electric models across the Land Rovers and Jaguar range. JLR is currently projecting the launch of its Modular Longitudinal Architecture (“MLA”) platform this year, with the first Battery Electric Vehicle (“BEV”) being launched in Q4 2024 and four Range Rover BEV models entering production on MLA and Electrified Modular Architecture (“EMA”) platform in 2026. JLR is adding the MLA and EMA platforms to its existing platforms to focus on electric and hybrid models. JLR are aiming to ensure all Jaguar and Land Rover Models are available as BEVs by 2030 and to achieve 100% zero emissions by 2036. BEVs are generally more aluminium intensive than traditional ICE models. Battery components are heavier than traditional engine parts and this has resulted in OEMs adopting lightweighting strategies. This commonly involves substituting steel components for aluminium components. By lowering the overall weight of a vehicle this should lead to an overall reduction in carbon emissions and increases the range BEVs can cover based upon a full charge.

Evtec is subject to ongoing rigorous monitoring. Evtec is required to annually update its Sustainability Assessment Questionnaire (“SAQ”) for the purpose of demonstrating that it meets the industry standard assessment criteria promoted by DS.

As a supplier to JLR, Evtec is required to promote continuous quality improvement in the manufacture, production and distribution of the goods. It is also required to comply with the quality assurance processes, inspections and standards (including in relation to prototype goods) specified by JLT for suppliers and specifically with the JLR’s Supplier Code of Conduct in areas that include, human rights and working conditions, material sourcing, and ethical behaviours and the JLRQ quality and delivery programme.

Evtec holds a number of industry certifications in respect of both of its sites (as detailed above), which is a requirement for all Tier 1 Suppliers for the purpose of demonstrating their environmental performance. In particular, ISO 14001 is a set of standards for environmental management systems. By adhering to this standard, Evtec ensures it minimizes its environmental footprint and complies with relevant regulations and demonstrates its commitment to a sustainable future. On a monthly basis, Evtec produces internal reports on its compliance and notes any corrective actions that may be required. As a certified organisation, Evtec undergoes a surveillance audit every six months, with a recertification audit every three years.

Company’s Manufacturing and Operations

Die casting of Aluminium Parts and Tools

Evtec’s foundry site located at Kidderminster is where it undertakes the high-pressure die casting of strong, lightweight, and complex aluminium parts. As at the date of this document, the parts supplied by Evtec are predominantly used in association with the assembly of vehicles equipped with ICE and Hybrid and it will be supplying parts for JLRs new EVs in the near future.

Evtec and JLR first establish the appropriate moulds and specifications for parts and tools required for different models of Land Rover and Jaguar.

Evtec has undertaken significant capital investment into the acquisition of die-casting machines, which range in size from 700T to 2700T. HPDC involves injecting molten metal into a mold under high pressure, as is commonly used in the automotive industry for the production of small to medium-sized aluminium castings. Automotive applications today account for the largest share of the HPDC market. The process is common in the production of vehicle closure parts, body-in-white parts, chassis, and powertrain applications in traditional vehicles. However, the use of HPDC is also being driven by the new vehicle concepts and BEV platforms, where cast aluminium parts are widely used in their simplified car body construction. Consistent with industry norms, Evtec has acquired appropriate machinery on hire-purchase arrangements.

The majority of aluminium parts cast at Evtec’s foundry in Kidderminster are delivered to Evtec’s Coventry site for the purposes of machining parts and preparing items for onward delivery to JLR at its engine assembly plants in Solihull and Wolverhampton. Approximately 30% of parts that are prepared in Kidderminster are delivered to directly to other Tier 1 suppliers within the JLR supply chain.

Evtec is JLRs nominated supplier for the casting of aluminium parts. Aluminium parts which are made at the company’s foundry in Kidderminster are delivered to other nominated Tier 1 Suppliers within the JLR supply chain. Tier 1 Suppliers will purchase cast parts from Evtec and final machining of those parts will be undertaken by Tier 1 Suppliers, prior to final shipment to JLR. All cast and machine parts are collected by customers from Evtec’s Coventry site.

Suppliers and Business Costs

For Evtec’s business to function, it is required to source aluminium from suppliers. Evtec sources the form of aluminium required for foundry casting from several suppliers. Its largest supplier has been in operation for over 15 years and is one of the UK’s leaders in the provision of metal and metal recycling.

The grade of aluminium required by Evtec is a readily available alloy capable of being supplied by several suppliers within the United Kingdom. There are price escalation clauses in Evtec’s agreements with JLR and other clients to adjust for cost fluctuations and Evtec maintains a strong relationship with JLR to leverage its supply chain and preferred pricing. Evtec is not exposed to profitability risk from fluctuating aluminium pricing.

It is critical for Evtec’s business that its casting machines and other key machinery are kept in good working order and are subject to regular routine maintenance. Evtec incurs expenditure on machine maintenance and small tools consumables.

One of the major costs of Evtec is addressing the significant costs of electricity, gas and other utility costs associated with owning and operating two large manufacturing sites. These costs have increased significantly in early 2022 as a result of the wholesale price increases caused by Russia’s invasion of Ukraine and the UK placing restrictions on oil and gas imports from Russia. There are number of ongoing issues that are further impacting costs, such as shortages of goods, high inflation in the UK and cost of increased wages. Evtec is currently in discussion with JLR to include price escalation and de-escalation clauses in their contracts in respect of energy costs.

Sales and Marketing

Due to the nature of Evtec’s existing business it does not devote any significant capital resource to sales and marketing, and this would be unlikely to change because of the transaction. Evtec’s current anticipated order book can be met by its planned capital expenditure and investment in facilities and tooling, and at this stage the company is focused on delivering this production and maximizing profitability from the current order book (rather than pursuing new large scale contracts or projects with other OEMs that it will need to finance and deliver, potentially at the cost of future profitability).

Evtec positions itself as a thought leader in the industry with a track record of delivering reliable results. This position will continue to be driven at industry events and traditional communication channels to engage industry leaders to join the conversation and movement towards collaborative relationships.

Banking and Finance Arrangements

Since incorporation, Evtec financed its acquisitions of the trade and assets of the business as undertaken by LAT (and related companies) at its sites at Coventry and Kidderminster through external financing. As a result of the Covid-19 pandemic, supply shortages negatively impacted the manufacturing sector, which as a whole became dependent on external financing and director’s loans. Evtec has financing arrangements with three different lenders and there is an intercreditor agreement and subordination deed in place. Following the Exchange Closing, Evtec will use its improved balance sheet and profile as a subsidiary of a public company to enter into more favorable financing arrangements.

Intellectual Property

The intellectual property of Evtec is primarily comprised of unregistered trade secrets and know-how.

Evtec’s Chief Executive Officer and director, David Roberts, owns various trademarks, logos, domain names, social media accounts and tradenames related to the Evtec Companies (the “Evtec Intellectual Property”). He has entered into a global, non-transferable, royalty free non-exclusive license agreement with Evtec, permitting Evtec to use the Evtec Intellectual Property in exchange for £1. The license was granted on April 19, 2024 for a period of 36 months. During the term of the license Evtec has the right of first refusal to acquire the Evtec Intellectual Property from Mr. Roberts (or otherwise agree terms, on an arm’s length basis, for its extension).

Regulatory Matters

Evtec is subject to the laws and regulations of England and Wales.  The company engages is manufacturing of aluminium materials and it will need to ensure that it complies with health and safety regulations, environmental laws, employment law (including, provisions around working-time and conditions) and product liability. 

The Government of the United Kingdom will, consistent with other nations, introduce new rules, laws and regulations aimed at reducing carbon emissions in the automotive sector and its wider supply chain.  In September 2023, the UK Government stated that it will impose a complete ban on the sale of new diesel and petrol vehicles from 2035 (extending the deadline from 2030), and 80% of new cars sold are required to be carbon neutral by 2030 in the United Kingdom.  OEMs in the automotive industry will be required to comply with international laws and domestic legislation to ensure that the components and parts used in the construction of its vehicles are capable of being reused and recycled, including, assisting its customers with disposal, recovery, and recycling of vehicles at end-of-life and disposal stage.  Laws and regulations that apply to OEMs will have a direct impact on members of its supply chain.   

Health and Safety Regulation

The Health and Safety at Work Act 1974 (“HSA”) imposes statutory duties and obligations on companies, directors, and their managers in the United Kingdom to ensure that the workplace is safe, and employees are not exposed to dangers.  Evtec is under an obligation to regularly assess the risks that employees may encounter on a day-to-day basis working across its two sites and to adopt effective measures and procedures, including, inter alia, the provision of appropriate training, safety equipment and clothing and creating reporting procedures.  The company has employed a full time health and safety manager who is responsible for ensuring that the company implements its procedures. Failure by the company to comply with its obligations could expose the company to civil and criminal penalties.

Environmental Regulation

The buildings and sites which Evtec operates are required to comply with relevant environmental and energy management standards.  Both the company’s sites at Coventry and Kidderminster hold an ISO 14001 certification (“ISO 14001 Standard”).  ISO 14001 is a globally recognized system for minimizing environmental impact.  Evtec achieved ISO 14001 certification following an audit of its environmental management systems (“EMS”).  The company has adopted policies and provides training to its employees in respect of its EMS, which is subject to regular periodic reviews and assessment.  Customers, such as JLR, who are aiming to achieve net zero carbon emissions across its supply chain by 2039 will expect Evtec to demonstrate its commitment to complying with environmental legislation and sustainability.  This is in part evidenced by the company’s commitment to maintaining and improving its EMS, and ISO 14001 Standard certification.  

Evtec in its manufacturing process may produce waste materials and the company will need to ensure that such materials are appropriately used, managed, and safely disposed of any hazardous substances, waste and other materials.   If Evtec fails to comply with its environmental obligations as the occupier of the sites at which it operates, the company could be subject to fines and potential liability for the costs of any investigation and or remedial action that is required, regardless of fault, and in certain cases, criminal liability.  The sites at which the company operates have a history of industrial use by third parties.  Failure to comply with its obligations on the disposal of hazardous materials could impact the reputation of the company (including, attractive adverse publicity) and could therefore impact on the operations and financial condition of the company.     

Employment Regulation

Evtec is required to comply with English employment law and regulations. This includes ensuring compliance with legislation concerning, working hours, equal pay, minimum pay, as well as statutory rights to leave such as maternity leave, paternity leave, sick leave or bereavement leave.

Employees have the right to join an independent trade union. Those who do so benefit from certain bargaining rights. Evtec recognizes two unions – Unite the Union at Coventry and Works Council at Kidderminster. The unions have the right to be consulted on matters such as redundancies. A small percentage of Evtec’s workforce have elected to join one of the two unions and the company currently enjoys good industrial relations, both with union and un-unionized employees.

British and Irish citizens are automatically eligible to work in the UK. Post-Brexit, EU citizens are eligible to work in the UK if they hold a valid settled status. Overseas nationals’ right to work in the UK depends on their immigration status and any restrictions imposed in their visas. A company employing non-British and non-Irish citizens needs to ensure that they have the right to work in the UK.

Product Liability

Evtec, as a manufacturer of car components can be liable for a defective product under the Consumer Protection Act 1987 (“CPA”), in negligence or under its contract with JLR.

Under the CPA, Evtec could be liable for damages (which includes death, personal injury and loss or damage to personal property) caused by a defective product. The CPA sets out the definition of a ‘defective’ product and it establishes a strict liability meaning that the claimant does not need to prove how the defect was caused but simply that there was a defect. Liability under the CPA is joint and several meaning that the claimant may be able to choose who to sue in the supply chain. There are number of defenses available under the CPA, including that the defect is attributable to compliance with any legal or regulatory requirement or that there was no product defect at the relevant time.

In addition to a claim under the CPA, Evtec could also be liable under common law of negligence if a person has suffered personal injury or property damage because of a defective product.

Evtec maintains insurance in relation to product liability on terms consistent with the industry and as required by JLR.

Employees

As at March 31, 2024, Evtec employed approximately 278 employees, of which, approximately 49 are engaged in marketing, sales, distribution and administrative activities, while 229 of its employees are engaged in the production and manufacturing activities.

Properties

Evtec has two factory sites located in Chelmarsh, Coventry and Kidderminster. Evtec occupies these premises under separate commercial leases, the terms of which are briefly described below. Evtec does not own any freehold properties or otherwise hold any additional property interests.

Chelmarsh, Coventry

Evtec (as tenant) and Tilstone Industrial Limited (as landlord) entered into a lease dated September 30, 2022 in respect of land and buildings at Chelmarsh, Daimler Green, Coventry, CV6 3LT. The lease was granted for 10 years from July 1, 2022. Evtec has no contractual right to renew the lease after the expiration of the initial term. However, the lease is not “excluded” from the Landlord and Tenant Act 1954 so Evtec will have the right to a new lease unless the landlord can successful challenge the grant of the new lease on specific statutory grounds. The annual rent of the property has been agreed for the first five years of Evtec’s occupation and will be subject to an open market rent review on an “upwards only” basis on the fifth anniversary of the term start date. The lease agreement is governed by English law and Evtec is required to observe the covenants and obligations that are customary for a lease of commercial property for manufacturing and industrial use.

Kidderminster

Evtec (as tenant), Power Generation (Midlands) Limited (as landlord) and Evtec Automotive Limited and Evtec Group Limited (in their capacities as guarantors) entered into an underlease agreement on June 24, 2022 in respect of the property known as The Lye Forge, Stourport Road, Kidderminster, Worcestershire DY11 7QR, England. Evtec Group Limited is the holding company of Evtec Automotive Limited and Evtec Group Limited is controlled by David Roberts, as a significant shareholder. The lease of the property is for a term of 5 years (less 1 day) beginning on March 10, 2022 and expiring on March 8, 2027. Evtec does not have a contractual or statutory right to renew the lease. Evtec is required to pay an annual rent, and advanced dilapidation payments, of which additional payments will fall due annually until 2026.

Legal Proceedings

From time to time, Evtec may become involved in legal proceedings arising in the ordinary course of its business. Evtec is not presently a party to any material litigation.

Corporate Information

Evtec Aluminium Limited is a private company incorporated in England with company registration number 13182146 and having its registered office address is located at Chelmarsh, Daimler Green, Coventry, England, CV6 3LT. Evtec was incorporated on February 5, 2021 with the name Evtec Assetco Ltd and changed its name to Evtec Aluminium Limited on August 23, 2021. The website address for Evtec is https://www.evtec-aluminium.com/ and its telephone number is +44 020476 600 300.

EVTEC MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the results of financial condition and results of operations for the fiscal years ended June 30, 2023 and 2022 should be read in conjunction with our financial statements, and the notes to those financial statements that are included elsewhere in this Form S-4.

Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

Overview

Evtec Aluminium Limited (“Evtec”), is a company which specialises in the design, manufacture and supply of aluminium parts and tools to its principal customer, Jaguar Land Rover (“JLR”), Britain’s largest automotive manufacturer, and other Tier 1 suppliers that form part of the JLR supply chain. Evtec aims to develop parts with extreme performance, durability, and lightweight construction in mind.

Evtec is attractive to Original Equipment Manufacturers’ (“OEMs”), such as JLR, because it provides a complete solution by offering both foundry and machining capabilities, as well as in-house engineering capabilities to be able to develop tools which will be used in JLRs assembly line for new electric vehicles. Evtec operates from two sites in the United Kingdom (UK), one in Coventry and one in Kidderminster. Both sites are located in the ‘West Midlands’, an area of the United Kingdom, recognised as a traditional automotive manufacturing centre. Evtec’s Kidderminster site is a High Pressure Die Casting (“HPDC”) foundry, the most modern one of its type in the UK, producing strong, light weight complex aluminium parts for use in hybrid engines and electric power units such as motor housings and electronic drive units. The parts produced in Kidderminster are transported daily to Chelmarsh, Evtec’s site in Coventry, which houses one of the UKs largest machining facilities, where the cast parts are machined and sequenced for delivery to its OEM customers on a “just-in-time” basis.

Evtec’s sites are located nearby to JLR’s headquarters in Coventry and JLR’s iconic plant in Solihull where Land Rover has manufactured its pioneering vehicles since 1947. Evtec’s infrastructure and geographic location means that it is perfectly located to provide ‘Just in Time’ delivery capability to OEMs and other automotive suppliers in the United Kingdom, which has become increasingly important in a new era of supply chain shocks and geopolitical problems, which has led to widespread disruption across the automotive industry.

Currently, Evtec produces aluminium parts and tooling required for JLR’s existing range of vehicles fitted with an Internal Combustion Engine (“ICE”) and delivers, on average, approximately 130,000 parts per month to JLR and its wider supply chain. The Company has increased turnover from £11.6 million to June 2022 to £25.6 million to June 2023 over the 12-month period, and it is continuing to increase productive capacity to meet the needs of planned new electric drive vehicles being developed by JLR. Earlier this year, Evtec announced that it had been awarded a supply agreement worth £67 million for the provision of aluminium parts to JLR, which would be utilised in JLRs new range of hybrid and electric vehicles set to enter production in the coming years. Management expect that Evtec will capitalise over the coming years on progressive introduction of electric and hybrid vehicles, as such vehicles will be more aluminium intensive, as part of lightweighting strategies designed to reduce carbon emissions and to improve performance.

In addition to delivering on its strong anticipated order book with visibility through to 2029, management will focus on identifying future opportunities to undertake strategic acquisition(s) and investment(s) into suppliers currently operating within the Luxury, Performance, Hybrid and Electric Vehicle (“EV”) automotive supply chain. The anticipated orders (agreed in committed forward order schedules) are not binding purchase orders, and are subject to change in any financial year depending on demand for vehicles produced by the relevant OEM. Therefore, management seeks to identify suppliers which have, amongst other things, a strong order book through to at least 2032, suppliers to large OEMs (particularly, single source suppliers with embedded relationships) and which are engaged in the supply of crucial components capable of being sold in significant volumes.

Basis of Presentation

The accompanying financial statements have been prepared in assumption of the continuation of the Company as a going concern, which is dependent upon Evtec’s ability to obtain sufficient financing or establish itself as a profitable business. For the six months ended December 31, 2023, Evtec incurred an operating loss of £1,584,535 and a total comprehensive loss of £2,902,188. For the year ended June 30, 2023, the Company incurred an operating loss of £2,808,930 and a total comprehensive loss of £4,872,030 as compared to an operating loss of £3,843,562 and total comprehensive loss of £4,539,542 for the prior fiscal year. Cash flows from operations were £2,102,693 for the six months ended December 31, 2023 as compared to £(3,679,340) for the fiscal year ended June 30, 2023 and £(2,482,981) for the fiscal year ended June 30, 2022. At December 31, 2023 Evtec had cash and cash equivalents of £1,740,968. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management has a growth plan focused on substantially increasing revenue in order to leverage fixed costs and improve profitability. Evtec management has determined that Evtec has an estimated forward looking order book of in aggregate £540.5 million (being the aggregate of the order books for existing parts and new parts). The anticipated orders (agreed in committed forward order schedules) are not binding purchase orders, and are subject to change in any financial year depending on demand for vehicles produced by the relevant OEM. Evtec will require not only working capital but significant capital expenditures of £40m in order to finance the growth plan. In addition, Evtec has received a commitment to financial support in the amount of £1.5m from a customer for the fiscal year ended June 30, 2024. Evtec is required to raise at least $5,000,000 of equity prior to the closing of the Exchange with Blackboxstocks and anticipates that subsequent to the pending acquisition by Blackboxstocks and listing on NASDAQ, it will be able to raise additional capital to fund capital expenditures and operations. There can be no assurance that the growth plan can be achieved or that it will impact its cash flow or if it will be able to raise additional capital or on what terms.

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

Recently Issued Accounting Pronouncements

During the year ended June 30, 2023 and through May 9, 2024, there were several new accounting pronouncements issued by the International Accounting Standards Board (“IASB”). 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 Evtec’s financial statements.

All other new accounting pronouncements issued but not yet effective or adopted have been deemed not to be relevant to us, hence are not expected to have any impact once adopted.

Summary of Significant Accounting Policies

Use of Estimates

Evtec’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 IFRS. Actual results could differ from those estimates.

Basis of Preparation

The financial statements have been prepared in accordance with UK-adopted international accounting standards and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention.

Transition to adopted IFRS

The financial statements have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 ("IFRS") and applicable law. Consequently, IFRS1 First-time Adoption of International Financial Reporting Standards has been applied. The company has adopted IFRS in 2023, with an IFRS transition date of 5 February 2021. IFRS 1 grants certain exemptions from the full requirements of adopted IFRSs in the transition period. No exemptions have been taken in preparation of these financial statements. An explanation of how the transition to IFRSs has affected the reported financial position, financial performance, and cash flows of the company is provided in note 23.

Revenue Recognition

IFRS 15 Revenue, requires revenue to be recognized under a 'five step' approach when a customer obtains control of goods or services in line with the performance obligations identified on the contract. Under IFRS 15, revenue recognition must reflect the standard's five-step approach which requires the following:

Revenue is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. Revenue from the sale of goods and services in the course of ordinary activities is measured at fair value of the consideration received or receivable, net of returns, trade discounts, and volume rebates. Revenue is recognized on completion of each performance obligation and when control has been passed to the customer. For production revenue, this is recognized at a point in time upon provision of an executed sales agreement or purchase order which signify that control has been passed to the customer and recovery of the consideration is probable. The Company issues discounts based on sales volumes which are recognized as a reduction in revenue. Tooling and long term contract revenue is recognized over the period of the contact. The value of the contract work in progress comprises the costs incurred on contracts plus an appropriate proportion of overheads and attributable profit. Fees invoiced on account are deducted from the value of work in progress and the balance is separately disclosed in trade receivables as amounts recoverable on contract, unless such fees exceed the value of the work in progress on any contract, when the excess is separately disclosed in trade and other payables as fees invoiced in advance. Profit is recognized on a percentage completion basis, over time, taking into account costs to complete, and assessing the outcome of a contract or project result. Costs incurred before it becomes probable that a contract will be obtained are charged to expenses. Directly attributable costs incurred after that point are recognized in the balance sheet and charged to the income statement over the duration of the contract. Production: represents goods manufactured or assembled on site, to contract orders, typically for new car production. Production runs are aligned with client orders, and income is recognized at a point in time on dispatch. Tooling: contracts are entered into in advance of production runs, and income may be recognized at a point in time (if the tool is delivered to a client), or over time (where the tool is to be held at Evtec's sites). The treatment of tooling revenue recognition depends upon the terms of the client contract. Support contributions from customers are included within turnover when the substance of the transaction is that such contributions are an increase in the price charged for goods sold.

Inventories

Inventory and work in progress is value at the lower of cost and net realizable value, after making due allowance for obsolete and slow moving items. Cost is calculated using the first-in, first-out method and includes all purchases, transport, and handling costs in bringing stocks to their present location and condition.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognized in the Income Statement, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. Current or deferred taxation assets and liabilities are not discounted. Current tax is recognized at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred Tax

Deferred tax is recognized in respect of all timing differences that have originated but not reversed at the balance sheet date. Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognized in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. Unrelieved tax losses and other deferred tax assets are recognized only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Leases

At inception of a contract, Evtec assesses whether a contract is, or contains, a lease based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low value assets. The Company recognizes lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. Judgement is applied to determine whether consideration is incurred and other terms within such arrangements.

Right-of-Use Assets

The Company recognizes right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right-to-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimate useful lives of the assets. The lease term would only include periods covered by an option to extend if the Company is reasonably certain to exercise that option. Under IFRS 16, right-of-use assets are tested for impairment in accordance with IAS 36. The company has concluded that there is no residual value in any of the rental leases.

Lease Liabilities

At the commencement date of the lease, the Company recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that depend on an index or rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate and any other payments to the lessor relating to the leased asset which are determined to be in substance lease payments. In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a modification, a change in the lease term, a change in the lease payments (e.g. changes to future payments resulting for a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

Short-term leases and leases of low value assets

The Company applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e. those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be of low value. Lease payments on short-term leases and leases of low-value assets are recognized as an expense on a straight-line basis over the lease term.

Liquidity and Capital Resources

At December 31, 2023 Evtec had cash and cash equivalents of £1,740,968. For the six months ended December 31, 2023 and the year ended June 30, 2023, Evtec had operating losses of £(1,584,535) and £(2,808,930), respectively. Cash flow from operations was £2,102,693 and £(3,679,340) for the six months ended December 31, 2023 and fiscal year ended June 30 2023 respectively. Capital expenditures were £140,540 and £3,913,842 for six months ended December 31, 2023 and fiscal year ended June 30, 2023. Evtec expects to invest approximately £40 million over the next five years in order to increased its production capacity to meet its existing and projected business. Approximately 80% of these capital expenditures are expected to be debt financed as consistent with prior history. As noted above, Evtec will need to raise additional debt and/or equity in order finance its existing operations and projected growth. There can be no assurance that it will be able to do so or on what terms.

Results of Operations

Comparison of Six Months Ended December 31, 2023 and 2022

Revenue for the six months ended December 31, 2023 was £17,444,955 as compared to £11,841,547 for the six months ended December 31, 2022. The increase of £5,603,408 was due to increased orders as well as improved production capacity. Gross profit for the six months ended December 31, 2023 was £351,409, an improvement of £1,055,378 as compared to the six months ended December 31, 2022. The improved margin resulted from improved fixed cost absorption in the 2023 period of labour and overhead expenses. Raw material, aluminium, also decreased as a percentage of sales.

Administrative expenses increased by £1,315,267 or 96.7% from £1,360,583 for the six months ended December 31, 2022 to £2,675,850 for the six months ended December 31, 2023. The increase was due to higher payroll and increased use of external professional services. Evtec also received a commercial goodwill gesture of £1,500,000 during the six months ended December 31, 2023 which was recorded as other operating income. Other operating expenses recorded during the six months ended December 31, 2023 consisted primarily of costs incurred in connection with the pending Shares Exchange with Blackboxstocks Inc in the amount of £657,432.

Operating loss decreased from £2,064,552 for the six months ended December 31, 2022 to £1,584,535 for the six months ended December 31, 2023. The decrease of £480,017 was due to the improved sales and gross profit as well as other operating income but was partially offset by the higher administrative expenses.

Finance costs increased by £340,834 to £1,317,653 for the six months ended December 31, 2023 as compared to the six months ended December 31, 2022. The higher finance costs for the six months ended December 31, 2023 as compared to the six months ended December 31, 2022 when combined with the improved operating loss resulted in a net loss of £2,902,188 for the six months ended December 31, 2023 which was £139,183 lower than the same period in fiscal 2022.

Comparison of Years Ended June 30, 2023 and 2022

Revenue for the year ended June 30, 2023 was £25,355,301 as compared to £11,625,955 for the year ended June 30, 2022. The increase of £13,729,346 or 118% was due to fiscal year 2022 including only 7 months of operations following the acquisition of the business operations in November 2021 as well as an average increase of 28.3% in monthly sales for the fiscal 2023 year as compared to the prior period. Cost of sales increased from £12,382,006 for the fiscal year ended June 30, 2022 to £25,606,425 for the fiscal year ended June 30, 2023. The increase of £13,224,419 was driven primarily by the overall increase in sales volume as well as the additional months of operations during fiscal 2023. The primary components of cost of sales include raw materials (aluminum), wages and benefits, utilities, plant maintenance and repairs and subcontracted labor. Cost of sales decreased as a percentage of sales from 106.5% in fiscal 2022 to 101.0% in fiscal 2023 as a result of improving efficiencies and greater fixed cost leverage which is expected to continue.

Administrative expenses increased from £2,905,750 for the fiscal year ended June 30, 2023 to £5,252,769 for the fiscal year ended June 30, 2023. The increase of £2,347,019 or 80.8% was driven overall increased expenses in most categories including wages and benefits, leases, professional fees and lease expense. Other operating income for the year ended June 30, 2023 was £2,603,006 and consisted primarily of loan forgiveness income of £950,000 and a commercial goodwill gesture of £1,500,000 from a customer. During the year ended June 30, 2022, transaction costs of £181,761 related to the acquisition of the assets forming the business were incurred and classified as other operating expenses.

The operating loss of £2,950,887 for the fiscal year ended June 30, 2023 was £892,675 or 23.2% lower than the prior fiscal year as a result of the substantial increase in revenue and the other operating income as partially offset by the higher administrative expenses discussed above.

Finance costs for the fiscal year ended June 30, 2023 were £1,921,143 as compared to £695,980 for the prior year period. The increase of £1,225,163 was due to the higher average loan balances for the year ended June 30, 2023 and the longer period for which the loans were outstanding. Total comprehensive loss for the year was £4,872,030 as compared to £4,539,542 for the years ended June 30, 2023 and 2022 respectively. The increase of £332,488 was due to the higher finance costs as partially offset by the lower operating loss.

INFORMATION ABOUT THE COMBINED COMPANY FOLLOWING THE EXCHANGE

Overview of the Combined Company

The Combined Company will operate under the name “Evtec Holdings, Inc.” and will continue to be a Nevada corporation, which has elected to be taxed as a C-Corporation under the Internal Revenue Code. The Combined Company is expected to have a pro forma equity market capitalization of approximately $33,345,000 and a total enterprise value (including debt) of approximately $51,218,000 based on Blackboxstocks’ closing price of $2.77 per share and Evtec’s fair market value of $835.92 per share on May 3, 2024. The business of the Combined Company will be operated through its subsidiaries, including Blackbox.io, Inc. and Evtec and its subsidiaries.

The common stock of the Combined Company is expected to continue to be listed on Nasdaq and trade under the symbol “EVHI”.

The Combined Company’s principal executive offices will be located at 5430 LBJ Freeway, Suite 1485, Dallas, Texas 75240.

Directors and Management following the Exchange

The following table sets forth certain information as of May 3, 2024 concerning the individuals who will serve as the Combined Company’s directors and executive officers: