FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common shares" refer to the common shares in our capital stock.

As used in this quarterly report, the terms "we", "us", "our" and "our company" mean Caro Holdings Inc., unless otherwise indicated.





General Overview

Our company was incorporated on March 29, 2016 in the State of Nevada. We had been engaged in the subscription box business with our initial focus on offering sock subscriptions to our customers. Our subscription box was a package of a pair of socks that will be sent directly to a customer on a recurring basis. For example, a potential subscriber would subscribe to receive a pair of socks once a month for either a period of 6 months or 12 months. Our subscription sock boxes were a marketing strategy and a method of product distribution, allowing us to target a wide range of customers and cater to their variety of specific needs and interests.

We are a small early-stage development company. Prior to September 2022, our company's activities have been limited to the sourcing of our advertising channels, initial branding efforts, and in our formation and the raising of equity capital.

Since September 2022, the company has identified all of the components that it needs to provide service. It has been actively either acquiring or building these core components, and additional features as requested by certain clients. It has engaged a number of marketing activities, and has three or four example clients in multiple industries. As an example, it has a potential client in the legal and notarization space, where it is working to build a marketplace for notaries, to connect directly to its consumers, it has also been in conversations with a company that provides pet care, products, and industry that has seen substantial growth as a result of COVID-19. It is looking to provide its marketplace platform for the sale of products and services to the pet care, industry, and has identified three primary suppliers, who are willing to test this platform on a nationally in the United States. The Company is also engaging in social media campaigns, making the business is aware of our services. We contemplate that this year, we will also be attending trade shows and fairs as well as doing a number of online conferences to promote direct 2 consumer commerce, and we have identified experts in affiliate marketing, pay per click, organic, search, engine, optimization, and social media marketing. We have no revenues and have limited cash on hand. We have sustained losses since inception and have relied upon loans from directors and officers and the sale of our securities for funding. We have never declared bankruptcy, been in receivership, or involved in any kind of legal proceeding.





Our Current Business

Since our original idea, online commerce and the direct-to-consumer market has had sustained growth. As a result of Covid, this method of sales and distribution has grown exponentially. There are thousands of manufacturers and retailers that have traditionally sold their goods and services offline. Our plan has evolved from the original idea from being both the merchant and the distribution marketplace to strictly a marketplace and a direct-to-consumer enabler.

We are now engaged in the development of our Direct To Consumer systems and methodologies where we analyze the marketplace and work with mid-size brands that have a strong bricks and mortar presence, and have a desire to increase their digital presence.

Our Direct to Consumer System (D2C) will be a fully integrated, end-to-end system that allows full control of data that provides insight from multiple channels so together with our clients successful marketing decisions can be based on the entire business' performance. Based on these analytics, the system can immediately deploy personalization and optimization independently and readily understand how customer interactions vary across different regions. Furthermore, we believe we have the necessary infrastructure to take advantage of growth opportunities with minimal additional costs.

We have not developed any new or unique products or services that have not already been announced, but have plans to create or acquire complementary systems in the next year.

Marketing, Advertising, and Promotion

We believe that our systems will become one of our most important assets. Our ability to successfully create brand awareness is dependent upon our ability to address the changing needs and priorities of each brand's target customers. To that end, we plan to focus much of our marketing efforts to recruit partners and then to apply our methodologies to better understand their customers and their needs and ensure we align our brand messages in our marketing, and the channels through which we deliver these messages, to our target customers.






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Results of Operations



Three Months Ended December 31, 2022 Compared to Three Months Ended December 31,
2021



                         Three Months Ended
                            December 31,             Change         Change
                          2022          2021         Amount       Percentage
Revenue                $        -     $      -     $        -               -
Cost of Goods Sold              -            -              -               -
Gross Loss                      -            -              -               -
Operating expenses     $  102,956     $  9,133     $   93,823            1027 %
Loss from operations     (102,956 )     (9,133 )      (93,823 )          1027 %
Other expenses            (73,611 )          -        (73,611 )             -
Net Loss               $ (176,567 )   $ (9,133 )   $ (167,434 )          1833 %

Net loss increased from $9,133 for the three months ended December 31, 2021 to $176,567 for the three months ended December 31, 2022 due to the increase in operating expenses and other expenses.

During the three months ended December 31, 2022 and 2021, we did not generate revenues.

Operating expenses for the three months ended December 31, 2022 consisted of audit and accounting fees, software development expense, legal fees transfer agent fees, consulting fees and website development expense. The increase in operating expenses was primarily a result of an increase in development activities, audit fees, legal fees and consulting fees.

During the three months ended December 31, 2022, the Company incurred other expenses of $73,611 mainly consist of loss on convertible notes of $73,333.





Nine Months Ended December 31, 2022 Compared to Nine Months Ended December 31,
2021



                          Nine Months Ended
                             December 31,             Change          Change
                          2022          2021          Amount        Percentage
Revenue                $        -     $       -     $        -                -
Cost of Goods Sold              -             -              -                -
Gross Loss                      -             -              -                -
Operating expenses     $  139,403     $  43,412         95,991              221 %
Loss from operations     (139,403 )     (43,412 )      (95,991 )            221 %
Other expenses            (73,611 )           -        (73,611 )              -
Net Loss               $ (213,014 )   $ (43,412 )   $ (169,602 )            391 %

Net loss increased from $43,412 for the nine months ended December 31, 2021 to $213,014 for the nine months ended December 31, 2022 due to the increase in operating expenses and other expenses.

During the nine months ended December 31, 2022 and 2021, we did not generate revenues.

Operating expenses for the nine months ended December 31, 2022 consisted of audit and accounting fees, software development expense, legal fees, consulting fees and website development expense. The increase in operating expenses was primarily a result of an increase in development activities, audit fees, legal fees and consulting fees.

During the nine months ended December 31, 2022, the Company incurred other expenses of $73,611 mainly consist of loss on convertible notes of $73,333.






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Liquidity and Financial Condition





Working Capital (Deficiency)

                                                             December       March 31,
                                                             31, 2022          2022
Current Assets                                              $    46,369     $        -
Current Liabilities                                             283,093         22,003
Working Capital (Deficiency)                                $  (236,724 )   $  (22,003 )

Cash Flows

                                                                Nine Months Ended
                                                                   December 31,
                                                               2022            2021
Cash used in Operating Activities                           $   (88,900 )   $     (491 )
Cash used in Investing Activities                                     -              -
Cash provided by Financing Activities                           136,976            500
Effects on changes in foreign exchange rate                      (1,707 )            -
Net changes in cash during period                           $    46,369     $        9

Our total current assets as of December 31, 2022 were as $46,369 compared to total current assets of $0 as of March 31, 2022. The increase was primarily due to an increase in cash as the Company opened a bank account in September 2022.

Our total current liabilities as of December 31, 2022 were $283,093 as compared to total current liabilities of $22,003 as of March 31, 2022. The increase was attributed by the increase in convertible notes, promissory notes and due to related parties.

Working capital deficiency increased from $22,003 as of March 31, 2022 to $236,724 as of December 31, 2022 mainly due to the increase in convertible notes, promissory notes and due to related parties.

The report of our auditors on our audited financial statements for the fiscal year ended March 31, 2022, contains a going concern qualification as we have suffered losses since our inception. We have minimal assets and have achieved limited operating revenues since our inception. We have been dependent on sales of equity securities to conduct operations. Unless and until we commence material operations and achieve material revenues, we will remain dependent on financings to continue our operations.





Operating Activities

For the nine months ended December 31, 2022, net cash used in operating activities was $88,900, related to our net loss of $213,014, decreased by an increase of loss on convertible notes of $73,333, an increase in accounts payable and accrued liabilities of $48,896 and an increase in accrued interest of $1,885.

For the nine months ended December 31, 2021, net cash used in operating activities was $491, related to our net loss of $43,412 increased in by an increase in accounts payable and accrued liabilities of $40,421and an increase in prepaid expenses of $2,500.





Investing Activities

We did not use any funds for investing activities for the nine months ended December 31, 2022 and December 31, 2021.





Financing Activities

For the nine months ending December 31, 2022, net cash used by financing activities was $136,976 due to an issuance of a promissory note of $25,000,issuance of convertible notes of $110,000 and advancement from related party of $1,976. For the nine months ended December 31, 2021, net cash used by financing activities was $500 from advancement from related party.






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Cash Requirements

We will require additional cash as we expand our business. Initially, to carry out our business plan, we will need to raise additional capital. There can be no assurance that we will be able to raise additional capital or, if we are able to raise additional capital, the terms we be acceptable to us. Currently we do not have any inventory.

These conditions indicate a material uncertainty that casts significant doubt about our ability to continue as a going concern. We require additional debt or equity financing to have the necessary funding to continue operations and meet our obligations. We have continued to adopt the going concern basis of accounting in preparing our financial statements.

We will require additional financing in order to enable us to proceed with our plan of operations. There is no assurance that any party will advance additional funds to us in order to continue our future plans for operations.

We anticipate continuing to rely on equity sales of our common stock in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned business activities.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.





Critical Accounting Policies



Basis of Presentation

The financial statements are prepared in accordance with generally accepted accounting principles used in the United States of America ("US GAAP").





Use of Estimates

In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those estimates.






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Fair Value of Financial Instruments

The Company adopted the provisions of ASC Topic 820, "Fair Value Measurements and Disclosures," which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.

The estimated fair value of certain financial instruments, including accounts payable and accrued liabilities. are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features such as embedded conversion options, are comparable to rates of returns for instruments of similar credit risk.

ASC 820 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, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1 - quoted prices in active markets for identical assets or liabilities Level 2 - quoted prices for similar assets and liabilities in active markets or


          inputs that are observable
Level 3 - inputs that are unobservable (for example cash flow modeling inputs based
          on assumptions)

Recently Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 "Debt-Debt with "Conversion and Other Options" and ASC subtopic 815-40 "Hedging-Contracts in Entity's Own Equity". The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting; and, (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this update are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements.






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