Blackboxstocks secures financing up to $2M in anticipation of potential merger

Blackboxstocks (BLBX) entered into a Securities Purchase Agreement pursuant to which the Purchaser agreed to purchase from the Company senior debentures having an aggregate principal amount of $250,000 and amended and restated senior secured convertible debentures having an aggregate principal amount of $2,000,000 upon certain closing conditions applicable to the Initial Debentures and Additional Debentures, respectively. The Initial Closing of $250,000 was consummated on January 17, 2025. The Initial Debentures bear interest at a rate of 7.00% per annum and will mature on the earlier to occur of the date on which a definitive agreement relating to any “Merger Transaction” or March 15, 2025. At the Additional Closing, the Initial Debentures will be exchanged for the Additional Debentures as senior indebtedness secured by a first priority security interest on substantially all of the assets of the Company. The aggregate principal amount of the Additional Debentures will be $2,000,000 which will be funded by the Purchaser with $250,000 in principal amount credited from the exchange of Initial Debentures, $500,000 upon execution and delivery of a Merger Agreement, $750,000 upon the filing with the Securities and Exchange Commission of a registration statement on Form S-4 in connection with the Merger Transaction, and $500,000 upon the registration statement being declared effective. The Additional Debentures will bear interest at a rate of 7.00% per annum and will mature on the earlier of the closing of the Merger Transaction or 12 months following the issuance of the Additional Debentures. On the Maturity Date, the Company will repay the aggregate accrued interest and principal amount of the Additional Debentures, and the Additional Debentures may not be prepaid without the written consent of the holders thereof. In the event the Additional Debentures are repaid in cash, the holders shall receive a premium equal to 115% of the outstanding principal and accrued interest balance due on such date. In the event the Additional Debentures are not repaid on the Maturity Date, subject to certain limitations and absence of an event of default, the holders may convert the aggregate principal amount and accrued interest of the Additional Debentures into Company common stock at the conversion price, which will be 175% of the closing price of the Company’s common stock on the trading day immediately prior to the execution of the Additional Debentures with a minimum price of $5.00 per share of common stock. Notwithstanding the foregoing, the Additional Debentures will not be convertible into Company common stock if, after such conversion, the holders would beneficially own more than 9.9% of the Company common stock outstanding. The holders may elect to reduce such 9.9% beneficial ownership limitation to 4.9%, effective immediately upon such election.