Notes to
the Unaudited Financial Statements
Note
1 - Organization and Description of Business
C2 Blockchain, Inc. was incorporated on June 30, 2021 in the State of Nevada.
On June 30, 2021, Levi Jacobson was appointed Chief Executive Officer, Chief Financial Officer, and Director of C2 Blockchain, Inc.
On
March 31, 2022, the Company entered into a “Agreement and Plan of Merger”, whereas it agreed to, and subsequently participated
in, a Nevada holding company reorganization pursuant to NRS 92A.180, NRS 92A.200, NRS 92A.230 and NRS 92A.250 (“Reorganization”).
The constituent corporations in the Reorganization were American Estate Management Company (“AEMC” or “Predecessor”),
C2 Blockchain, Inc. (“Successor” or “CBLO”), and AEMC Merger Sub, Inc. (“Merger Sub”). Our director
is, and was, the sole director/officer of each constituent corporation in the Reorganization.
C2
Blockchain, Inc. issued 1,000 common shares of its common stock to Predecessor and Merger Sub issued 1,000 shares of its common stock
to C2 Blockchain, Inc. immediately prior to the Reorganization. As such, immediately prior to the merger, C2 Blockchain, Inc. became a
wholly owned direct subsidiary of American Estate Management Company and Merger Sub became a wholly owned and direct subsidiary of C2
Blockchain, Inc.
On
March 31, 2022, Merger Sub filed Articles of Merger with the Nevada Secretary of State. The merger became
effective on April 1, 2022 at 4:00 PM PST (“Effective Time”). At the Effective Time, Predecessor was merged with and into
Merger Sub (the “Merger), and Predecessor became the surviving corporation. Each share of Predecessor common stock issued and outstanding
immediately prior to the Effective Time was converted into one validly issued, fully paid and non-assessable share of C2 Blockchain, Inc.’s (“Successors”) common stock.
On
May 23, 2022, C2 Blockchain, Inc., as successor issuer to American Estate Management Company began a quoted market in its common
stock which was the market effective date for our corporate action.
The
Company believes that the Reorganization, deemed effective on April 1, 2022, was not a transaction of the type described in subparagraph
(a) of Rule 145 under the Securities Act of 1933 and the consummation of the Reorganization will not be deemed to involve an “offer”,
“offer to sell”, “offer for sale” or “sale” within the meaning of Section 2(3) of the Securities Act
of 1933. The Reorganization was consummated without the vote or consent of the Company’s stockholders. In addition, the provisions
of NRS 92A.180 did not provide a stockholder of the Company with appraisal rights in connection with the Reorganization. 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.”
On
April 1, 2022, after the completion of the Holding Company Reorganization, we cancelled all of the stock we held in AEMC resulting in
AEMC as a stand-alone company. Pursuant to the holding company merger agreement and effects of merger, all of the assets and liabilities,
if any, remain with AEMC after the Reorganization. Levi Jacobson, the Director of AEMC, did not discover any assets of AEMC from the time
he was appointed Director until the completion of the Reorganization and subsequent separation of AEMC as a stand-alone company.
Given
that the former business plan and objectives of AEMC and the present day business plan and objectives of CBLO substantially differ from
one another, we conducted the corporate separation with AEMC immediately after the effective time of the Reorganization in order to avoid
any shareholder confusion. The former business plan of AEMC under the leadership of its former directors, does not, in any way, represent
the current day blank check business plan of CBLO. The result of corporate separation ameliorated shareholder confusion about our identity
and/or corporate objectives. Furthermore, we wanted to continue trading in the OTC MarketPlace.
On April 1, 2022, the Company transmuted its business plan from that of
a blank check shell company to a business combination related shell company with a holding company formation pursuant to a reorganization
with American Estate Management Company.
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. Former shareholders of AEMC are now the
shareholders of CBLO. Each and every shareholder of AEMC became a shareholder of CBLO with each share of capital stock of AEMC held by
former AEMC shareholder becoming an equivalent amount of capital stock held in CBLO. The former shareholders of AEMC now have the opportunity
to benefit under our business plan and we have the opportunity to grow organically from our shareholder base and new leadership under
our sole director.
FINRA
completed its review of our corporate action pursuant to our Reorganization. On April 26, 2022, CBLO was given a CUSIP number by CUSIP
Global Services of 12675R 109. The announcement of our Predecessor’s corporate action was posted on the FINRA daily list on May
20, 2022. The Market Effective date was May 23, 2022.
Our
Common Stock is currently quoted on the OTC Markets Group Inc’s Pink® Open Market under the symbol “CBLO”.
After completion of the Holding Company Reorganization and separation
of AEMC as a wholly owned subsidiary, the Company reverted back to a blank check company.
The Company intends to serve as a vehicle to
affect an asset acquisition, merger, exchange of capital stock or other business combination with a domestic or foreign business. As
of the date of this report, the Company had not yet commenced any such operations.
Currently,
Mendel Holdings, LLC, a Delaware Limited Liability Company, owned and controlled by Levi Jacobson, our sole director is our controlling
shareholder, owning 200,000,000 shares of our common stock representing approximately 78.76 % voting control.
As of September 30, 2022, the Company
had not yet commenced any operations.
The Company has elected June 30th
as its year end.
Note
2 - Summary of Significant Accounting Policies
Basis of Presentation
This summary of significant accounting
policies is presented to assist in understanding the Company's financial statements. These accounting policies conform to accounting principles,
generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements.
Use of Estimates
The preparation of financial statements
in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order
to make the financial statements not misleading have been included. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly
liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents
at September 30, 2022 and June 30, 2022 were $0.
Income Taxes
The Company accounts for income
taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts
of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment
occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not
realize tax assets through future operations. No deferred tax assets or liabilities were recognized at September 30, 2022 and June
30, 2022.
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Basic Earnings (Loss) Per Share
The Company computes basic and diluted
earnings (loss) per share in accordance with ASC Topic 260, Earnings per Share. Basic earnings (loss) per share is computed
by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting period. Diluted earnings
(loss) per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised
or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company.
The Company does not have any potentially
dilutive instruments as of September 30, 2022 and, thus, anti-dilution issues are not applicable.
Fair Value of Financial Instruments
The Company’s
balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their
fair value because of the relatively short period of time between the origination of these instruments and their expected realization.
ASC 820, Fair Value Measurements
and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an
exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants
on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions
developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about
market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair
value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical
assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy
are described below:
- Level 1 - Unadjusted quoted prices
in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
- Level 2 - Inputs other than quoted
prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices
for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are
not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are
derived principally from or corroborated by observable market data by correlation or other means.
- Level 3 - Inputs that are both
significant to the fair value measurement and unobservable.
Fair value estimates discussed herein
are based upon certain market assumptions and pertinent information available to management as of September 30, 2022. The respective
carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these
instruments. These financial instruments include accrued expenses.
Related Parties
The Company follows ASC 850, Related
Party Disclosures, for the identification of related parties and disclosure of related party transactions.
Share-Based Compensation
ASC 718, “Compensation –
Stock Compensation”, prescribes accounting and reporting standards for all share-based payment transactions in which employee
services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments
such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee
stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized
over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period
(usually the vesting period).
The Company accounts for stock-based
compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, “Equity – Based Payments
to Non-Employees.” Measurement of share-based payment transactions with non-employees is based on the fair value
of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value
of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.
The Company had no
stock-based compensation plans as of September 30, 2022.
The Company’s stock-based
compensation for the periods ended September 30, 2022 and September 30, 2021 was $0
for both periods.
Recently Issued Accounting Pronouncements
In
February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 is amended by ASU 2018-01, ASU2018-10, ASU
2018-11, ASU 2018-20 and ASU 2019-01, which FASB issued in January 2018, July 2018, July 2018, December 2018 and March 2019, respectively
(collectively, the amended ASU 2016-02). The amended ASU 2016-02 requires lessees to recognize on the balance sheet a right-of-use asset,
representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12
months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly
changed from current GAAP. The amended ASU 2016-02 retains a distinction between finance leases (i.e. capital leases under current GAAP)
and operating leases. The classification criteria for distinguishing between finance leases and operating leases will be substantially
similar to the classification criteria for distinguishing between capital leases and operating leases under current GAAP. The amended
ASU 2016-02 also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows
arising from leases. A modified retrospective transition approach is permitted to be used when an entity adopts the amended ASU 2016-02,
which includes a number of optional practical expedients that entities may elect to apply.
We
have no assets and or leases and we do not believe we will be impacted in the foreseeable future by the newly adopted accounting
standard(s) mentioned above.
The Company has implemented all new
accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other
new pronouncements that have been issued that might have a material impact on its financial position or results of operations.
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Note
3 - Going Concern
The Company’s financial statements
are prepared in accordance with generally accepted accounting principles applicable to a going concern that contemplates the realization
of assets and liquidation of liabilities in the normal course of business.
The Company demonstrates adverse
conditions that raise substantial doubt about the Company's ability to continue as a going concern for one year following the issuance
of these financial statements. These adverse conditions are negative financial trends, specifically operating loss, working capital deficiency,
and other adverse key financial ratios.
The Company has not established
any source of revenue to cover its operating costs. Management plans to fund operating expenses with related party contributions to capital.
There is no assurance that management's plan will be successful. The financial statements do not include any adjustments relating to
the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in
the event that the Company cannot continue as a going concern.
Note
4 - Income Taxes
The Company has not
recognized an income tax benefit for its operating losses generated based on uncertainties concerning its ability to generate taxable
income in future periods. The tax benefit for the period presented is offset by a valuation allowance established against deferred tax
assets arising from the net operating losses, the realization of which could not be considered more likely than not. In future periods,
tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely
than not. As of September 30, 2022, the Company has incurred a net loss of approximately $18,861 which resulted in a net operating loss
for income tax purposes. The loss results in a deferred tax asset of approximately $3,961 at the effective statutory rate of 21%.
The deferred tax asset has been offset by an equal valuation allowance. Given our inception on June 30, 2021, and our fiscal year end
of June 30, 2022, we have completed only two taxable fiscal years.
Note
5 - Commitments and Contingencies
The Company follows
ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies
arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability
has been incurred and the amount of the assessment can be reasonably estimated. There were no commitments or contingencies as of September 30, 2022.
Note
6 - Shareholder Equity
Preferred Stock
The authorized preferred stock of
the Company consists of 20,000,000 shares with a par value of $0.001. There were no shares issued and outstanding as of September 30, 2022 and June 30, 2022.
Common Stock
The authorized common stock of the
Company consists of 500,000,000 shares with a par value of $0.001. There were no shares of common stock issued and outstanding as of September 30, 2022 and June 30, 2022.
There were 253,936,005
shares of common stock issued and outstanding as of September 30, 2022 and June 30,
2022 (See Note 1).
Note
7 - Related-Party Transactions
Loan
The Company’s sole officer and director, Levi Jacobson, paid expenses
on behalf of the company totaling $4,869 during the period ended September 30, 2022. These payments are considered as a loan to
the Company which is noninterest-bearing, unsecured and payable on demand.
The Company’s sole officer and director, Levi Jacobson, paid expenses
on behalf of the company totaling $12,657 during the period ended June 30, 2022. These payments are considered as a loan to the
Company which is noninterest-bearing, unsecured and payable on demand.
Office Space
We utilize the home office space and equipment of our management at no
cost.
Note
8 - Subsequent Events
Management has reviewed financial transactions for the Company
subsequent to the period ended September 30, 2022 and has found that there was nothing material
to disclose.
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