This is a distressed financing at highly punitive terms. The deeply discounted variable conversion prices and large warrant coverage signal severe cash constraints. Expect continued dilution pressure as holders convert at market discounts. Monitor for further dilutive financings, potential going-concern disclosures, and any default events under the notes' extensive covenant package. The stock is likely to face persistent selling pressure from note conversions.
Price Chart
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
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
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001882781-26-000041 |
| Document: leonite.htm | 0001882781-26-000041 |
| Document: form8k6226o.htm | 0001882781-26-000041 |
| Document: 0001882781-26-000041-index-headers.html | 0001882781-26-000041 |
| Document: 0001882781-26-000041-index.html | 0001882781-26-000041 |
| Document: 0001882781-26-000041.txt | 0001882781-26-000041 |
Track record builds as more directional reports settle.
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Sep 29, 2026 27d ago | NT 10-K | $0.0250 $0.0370 | ▼ −48.00% | ▼ −46.05% | $0.0298 (−19.20%) |
Jun 2, 2026 20w ago | 8-K | $0.0600 $0.0600 | · 0.00% | ▼ −2.96% | $0.0298 (+50.33%) |
May 5, 2026 24w ago | 8-K | $0.0600 $0.0600 | · 0.00% | ▲ +1.98% | $0.0298 (+50.33%) |
Apr 17, 2026 27w ago | 8-K | $0.0600 $0.0700 | ▲ +16.67% | ▲ +16.11% | $0.0298 (−50.33%) |
US Market Status
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