Company: GEDC
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-023834
Chunk: 53

Company: CalEthos, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 8
Chunk 53
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4, the Company initiated a private placement offering for its convertible debentures (the “Debentures”). The Debentures
bear interest at 10.0% per annum with a default interest rate of 15.0% per annum. The principal amount and all accrued interest are
payable on December 31, 2026. The holder of the Debentures has the option to convert the unpaid principal and interest into shares of
the Company’s common stock at the conversion rate of $2.00 per share, subject to adjustment for stock splits, stock dividends and
the like and for issuances by the Company of common stock at a price per share that is less than the then-current conversion price, subject
to certain exceptions.

In
accordance with the Debenture, the Company has the right to prepay the Debentures upon providing 45 days of its intention to prepay.

The
outstanding principal amount of the Debentures and all accrued interest thereon shall automatically be converted into shares of common
stock at the then effective conversion price upon (i) the close of business on the sixtieth (60th) consecutive day on which the VWAP
of the Company’s common stock is at least $4.00 per share, subject to appropriate adjustment in the event of any stock dividend,
stock split, stock combination or other similar recapitalization with respect to the common stock, or (ii) the execution by the Company
of a long-term lease with a data center client for all or a substantial portion of the Company’s planned data center development
project.

    10

For
the six months ended June 30, 2025, the Company issued Debentures in the amount of $225,000 for net proceeds of approximately $215,000.

Interest
expense on convertible promissory notes amounted to $77,000 and $4,000 for the six months ended June 30, 2025 and 2024, respectively,
of which $27,000 and $2,000, respectively, was capitalized as data center campus cost. 

Note
5 – Commitments and Contingencies

 COMMITMENTS AND CONTINGENCIES

Litigation

From
time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business.
The Company is not currently a party to any material legal proceedings, nor is the Company aware of any pending or threatened litigation
that would have a