10-K: C2 Blockchain, Inc. Files 10-K Report, Outlines Plans for Bitcoin Mining Operation

C2 Blockchain, Inc.'s annual report details its plans to establish a Bitcoin mining facility and its current financial status as a development stage company.

Summary

• C2 Blockchain, Inc. was incorporated on June 30, 2021, and is currently a development stage company with no material operations.
• The company plans to build a 14 MW Bitcoin mining facility in Georgia, USA, and is seeking up to $60 million in funding through a Tier II Regulation A offering to finance this project.
• The company's net loss for the year ended June 30, 2024, was $30,020, attributed entirely to general and administrative expenses.
• The company has a related party loan of $61,214 from its sole officer and director, Levi Jacobson, as of June 30, 2024.
• The company's financial statements raise substantial doubt about its ability to continue as a going concern due to operating losses and a working capital deficiency.
• The company's common stock is quoted on the OTC Markets Group's Pink Open Market under the symbol CBLO.
• As of August 20, 2024, the company has 253,936,005 shares of common stock outstanding and approximately 29 stockholders of record.
• The company is an emerging growth company and is exempt from certain reporting requirements.

Sentiment

Score: 3

Explanation: The document presents a company with a clear plan but significant challenges. The lack of current operations, going concern warning, and material weaknesses in internal controls raise serious concerns. The company's future is highly dependent on securing funding and successfully executing its business plan, which is not guaranteed.

Positives

• The company has a clear business plan to focus on cryptocurrency mining, primarily Bitcoin.
• The company has identified a specific location in Georgia for its mining facility.
• The company is actively pursuing funding through a Regulation A offering.
• The company has a controlling shareholder, Mendel Holdings, LLC, which provides stability.

Negatives

• The company has not commenced any material operations and has not generated any revenue since its inception.
• The company has incurred net losses of $30,020 in 2024 and $18,507 in 2023.
• The company's financial statements raise substantial doubt about its ability to continue as a going concern.
• The company has material weaknesses in its internal control over financial reporting.
• The company is dependent on a related party loan from its sole officer and director.
• The company's stock is thinly traded on the OTC market, which can lead to volatile price changes.

Risks

• The company may be unsuccessful in raising the necessary capital through its Regulation A offering.
• The company's business plan is dependent on securing funding and may need to be reconsidered if funding is not obtained.
• The company's planned mining operation may not happen, and the company may not achieve profitability.
• The company has material weaknesses in its internal control over financial reporting.
• The company is dependent on a related party loan from its sole officer and director.
• The company faces cybersecurity risks due to its small size and limited resources.
• The company's stock is thinly traded on the OTC market, which can lead to volatile price changes.

Future Outlook

The company plans to build a 14 MW Bitcoin mining facility in Georgia and is seeking up to $60 million in funding through a Tier II Regulation A offering. The company's future success is dependent on securing this funding and successfully implementing its business plan. There is no guarantee that the company will be able to raise the necessary funds or that the mining operation will be profitable.

Management Comments

• The company believes that the Reorganization was not a transaction of the type described in subparagraph (a) of Rule 145 under the Securities Act of 1933.
• The company believes that in the absence of any right of any of the company's stockholders to vote with respect to the Reorganization or to insist that their shares be purchased for fair value, the Reorganization could not be deemed to involve an offer offer to sell; or sale within the meaning of Section 2(3) of the Securities Act of 1933.
• The corporate actions taken by the company, including, but not limited to, the corporate structuring of the transactions, was deemed, in the discretion of our sole director, to be for the benefit of the corporation and its shareholders.
• The company's business plan is to concentrate on cryptocurrency related investments and development opportunities including but not limited to cryptocurrency mining, primarily for Bitcoin.
• The company expects the proceeds from the Offering will be sufficient for us to implement our business plan and that no additional funding will be needed to implement our business plan, however there is no guarantee that this may be the case.
• The company may be unsuccessful in raising any capital from the Offering, and thus we may need to seek out alternate sources of financing.
• The scalability of our business plan also depends entirely on our ability to secure funds for future operations.
• You will be relying on the judgment of our management regarding the application of the proceeds of any sale of our common stock.
• If management is unable to implement our proposed business plan or employ alternative financing strategies, it does not presently have any alternative proposals.
• We cannot assure you that our planned mining operation for bitcoin or any other digital coin will ever happen or that we will ever earn revenues sufficient to support our operations or that we will ever be profitable.
• If we cannot raise funds as and when we need them, we may be required to severely curtail, or even to cease our operations.

Industry Context

The company's focus on Bitcoin mining aligns with the growing interest in cryptocurrency and blockchain technology. However, the industry is highly competitive and subject to regulatory changes and market volatility. The company's success will depend on its ability to secure funding, manage costs, and adapt to the evolving landscape of the cryptocurrency market.

Comparison to Industry Standards

• Compared to established Bitcoin mining companies like Marathon Digital Holdings (MARA) or Riot Platforms (RIOT), C2 Blockchain is in a very early stage of development with no current operations or revenue.
• While MARA and RIOT have significant mining infrastructure and revenue streams, C2 Blockchain is still in the planning and fundraising phase.
• The proposed 14 MW facility is relatively small compared to the large-scale operations of industry leaders.
• The company's reliance on a single director and lack of an audit committee are not in line with the corporate governance standards of larger, more established companies.
• The company's financial position, with a going concern warning and material weaknesses in internal controls, is significantly weaker than that of its more established peers.

Corporate Governance

Related Party Transactions

• The company has a related party loan from its sole officer and director, Levi Jacobson, totaling $61,214 as of June 30, 2024.
• The company utilizes office space and equipment of its management at no cost.

Stakeholder Impact

• Shareholders face significant risk due to the company's going concern status and lack of current operations.
• Employees are not currently impacted as the company has no employees.
• Customers are not currently impacted as the company has no operations.
• Suppliers and creditors face risk due to the company's financial instability.
• The company's future success is dependent on securing funding and successfully implementing its business plan.

Next Steps

• The company needs to obtain qualification for its Tier II Regulation A offering.
• The company needs to secure funding to implement its business plan.
• The company needs to purchase real estate in Georgia.
• The company needs to build a warehouse for its mining operation.
• The company needs to purchase mining hardware and software.
• The company needs to source electricity for its mining operation.
• The company needs to commence mining of cryptocurrency.

Key Dates

Keywords

Bitcoin mining, cryptocurrency, blockchain, Regulation A offering, OTC Markets, financial statements, going concern, internal control, related party transactions, emerging growth company