CBLO C2 Blockchain, Inc.

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Executive Summary

C2 Blockchain raised approximately $201,000 in net proceeds through two convertible promissory notes: a $130,000 Auctus Fund note (net $108,000) and a $1,200,000 Leonite Fund note (initial tranche $100,000, net $93,000). Both notes carry deeply dilutive conversion terms (Auctus at 60% of lowest VWAP, Leonite at $0.05 fixed or 75% of lowest VWAP after 180 days) and are accompanied by warrants for up to 7,200,000 shares. The Leonite note is senior secured, with first-priority liens on substantially all assets. This is a distressed financing at punitive terms, signaling acute cash needs.

Key Financial Metrics

Actionable Insight

Key Facts

• Auctus Fund note: $130,000 principal, $117,000 purchase price, $13,000 OID, 12% interest ($15,600), matures May 22, 2027
• Auctus conversion price: 60% of lowest traded price over prior 15 trading days
• Auctus warrants: 5,200,000 shares at $0.05 exercise price
• Auctus net proceeds: $108,000 (after $4,000 legal and $5,000 due diligence fees)
• Leonite Fund note: up to $1,200,000 principal, $1,000,000 purchase price, $200,000 OID, 10% interest
• Leonite initial tranche: $100,000 funded, $7,000 legal fees withheld, net $93,000
• Leonite conversion: $0.05 fixed price; after 180 days, Holder may elect 75% of lowest VWAP over prior 10 days
• Leonite warrants: 2,000,000 shares at $0.10 exercise price
• Leonite commitment shares: 1,000,000 restricted common shares issued
• Leonite note is senior secured with first-priority lien on substantially all assets
• Combined potential dilution: up to 7,200,000 warrant shares plus unlimited conversion shares at deeply discounted variable prices
• Company received total net proceeds of approximately $201,000 from both notes

Financial Impact

Total net proceeds of approximately $201,000 against potential dilution of millions of shares at deeply discounted prices; Auctus conversion at 60% of lowest 15-day VWAP and Leonite variable conversion at 75% of lowest 10-day VWAP create severe overhang

Risk Factors

• Massive dilution from conversion of notes at deeply discounted variable prices (60% and 75% of market)
• Potential acceleration and 150% default premium if any of the extensive covenants are breached
• Senior secured lien on substantially all assets limits future financing options
• Company may need additional capital, leading to further dilutive rounds
• Low stock price could trigger additional anti-dilution adjustments and more shares

Market Snapshot

Documents Analyzed

This report is based on 6 SEC documents filed with EDGAR.

US Market Status