C2 Blockchain (CBLO) adds funding through convertible note and private stock sales
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
C2 Blockchain, Inc. entered into a financing arrangement by issuing a convertible promissory note with a principal amount of $120,000 to Labrys Fund II, L.P. for a purchase price of $100,000, reflecting a $20,000 original issue discount. The unsecured note carries a one-time interest charge of $12,000 and matures 12 months after issuance, with conversion rights into common stock at a 25% discount to the lowest closing bid price over the prior 10 trading days, subject to a 4.99% beneficial ownership cap that may be increased to 9.99% on notice.
The company must reserve at least 5,000,000 shares, or four times the shares issuable upon full conversion. Separately, C2 Blockchain sold 3,000,000 common shares at $0.01 per share for gross proceeds of $30,000 and 800,000 common shares at $0.01 per share for gross proceeds of $8,000, all in private placements relying on Section 4(a)(2) and Regulation D exemptions.
Positive
- None.
Negative
- None.
8-K Event Classification
3 items: 1.01, 3.02, 9.01
3 items
Item 1.01
Entry into a Material Definitive Agreement
Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 3.02
Unregistered Sales of Equity Securities
Securities
The company sold equity securities in a private placement or other unregistered transaction.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Convertible note principal: $120,000
Note gross proceeds: $100,000
Original issue discount: $20,000
+5 more
8 metrics
Convertible note principal
$120,000
Principal amount of unsecured convertible promissory note
Note gross proceeds
$100,000
Cash received from sale of the note
Original issue discount
$20,000
Difference between principal and purchase price
One-time interest charge
$12,000
10% of principal on the convertible note
Share reserve minimum
5,000,000 shares
Minimum common shares reserved for note conversion
Private placement 1
3,000,000 shares at $0.01
Common stock sale for $30,000 gross proceeds
Private placement 2
800,000 shares at $0.01
Common stock sale for $8,000 gross proceeds
Beneficial ownership cap
4.99% to 9.99%
Conversion ownership limitation for the note holder
Key Terms
convertible promissory note, original issue discount, beneficial ownership limitation, Regulation D, +2 more
6 terms
convertible promissory note financial
"the Company issued a convertible promissory note (the “Note”) to Labrys Fund II, L.P."
A convertible promissory note is a loan a company takes now that can later be turned into shares instead of being repaid in cash. Think of it as lending money with the option to accept ownership in the business down the road; that matters to investors because it affects who gets paid first, how much ownership existing shareholders keep, and the company’s future valuation and cash needs. Terms such as conversion price, interest and maturity determine the financial impact.
original issue discount financial
"principal amount of $120,000, reflecting a purchase price of $100,000 and an original issue discount of $20,000"
Original issue discount (OID) is the difference between a debt security’s face value and the lower price at which it is first sold, treated as additional interest that accrues over the life of the instrument. For investors it matters because OID raises the effective yield and changes taxable income and the holding’s cost basis over time — think of buying a $100 voucher for $90 and recognizing the $10 gain as earned interest as the voucher approaches maturity.
beneficial ownership limitation financial
"The Holder is subject to a beneficial ownership limitation of 4.99%, which may be increased to 9.99%"
A beneficial ownership limitation is a rule that caps the percentage of a company’s shares an investor can be treated as owning or controlling for voting, regulatory or tax purposes. It matters to investors because it can restrict how many shares a person or group can buy or vote, affect takeover chances, and influence share liquidity and value — like a speed limit that prevents any single driver from taking over the whole road.
Regulation D regulatory
"reliance upon the exemption from registration provided by Section 4(a)(2) ... and Regulation D promulgated thereunder"
Regulation D is a set of rules that govern how companies can raise money from investors without going through the full process required for public stock offerings. It provides simplified options for private placements, making it easier for companies to seek investments from a smaller group of investors. For investors, it offers opportunities to invest in private companies, often with fewer restrictions, but also with different levels of risk and disclosure.
Section 4(a)(2) regulatory
"exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended"
Section 4(a)(2) is a part of U.S. securities laws that allows companies to sell their stock directly to certain investors without registering the sale with regulators. This process is often used for private placements, making it easier and faster for companies to raise money from knowledgeable or institutional investors. It matters to investors because it provides an alternative way to buy shares, often with fewer disclosures and lower costs.
events of default financial
"The Note contains customary events of default, including, among others, failure to pay amounts due"
Events of default are specific breaches or failures listed in a loan, bond, or credit agreement that give lenders the right to act, such as demanding immediate repayment, raising interest rates, or taking secured assets. They matter to investors because triggering one is like setting off a financial alarm: it raises the chance of foreclosure, restructuring, or bankruptcy and can sharply reduce the value of a company’s stock or bonds and increase borrowing costs.
FAQ
What new financing did C2 Blockchain (CBLO) arrange in this 8-K?
C2 Blockchain issued a convertible promissory note with a $120,000 principal to Labrys Fund II, L.P. The company received $100,000 gross proceeds, reflecting a $20,000 original issue discount plus a one-time $12,000 interest charge.
What are the key terms of C2 Blockchain’s new convertible note?
The unsecured note has a $120,000 principal, $12,000 one-time interest, and a 12‑month maturity. The holder can convert at 75% of the lowest closing bid price over 10 prior trading days, subject to ownership limits and standard adjustment provisions.
What private placements of common stock did C2 Blockchain disclose?
C2 Blockchain sold 3,000,000 common shares at $0.01 each for $30,000, and 800,000 common shares at $0.01 each for $8,000. These unregistered sales were made to accredited investors under Section 4(a)(2) and Regulation D.
What is the beneficial ownership limitation for the note holder in CBLO?
The holder is initially limited to 4.99% beneficial ownership of C2 Blockchain’s common stock. This cap can be increased to 9.99% if the holder gives 61 days’ prior written notice, as allowed under the note’s terms.
Under what exemptions were C2 Blockchain’s recent securities issuances made?
The note and share issuances were made in reliance on Section 4(a)(2) of the Securities Act and Regulation D. Investors were accredited, purchased for investment purposes, and the offerings avoided general solicitation or advertising, consistent with private placement requirements.