Company: GEDC
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001641172-25-010244
Chunk: 49

Company: CalEthos, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 8
Chunk 49
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 reporting.

There were no changes in our internal
control over financial reporting that occurred during the quarter ended March 31, 2025 that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Internal Controls

Readers are cautioned that our
management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily
prevent all fraud and material error. An internal control system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems,
no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our control have
been detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events,
and there can be no assurance that any control design will succeed in achieving its stated goals under all potential future conditions.
Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures
may deteriorate.

17

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material active
or pending legal proceeding against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation.

Item 1A. Risk Factors

We are a small reporting company,
as defined by Rule 12b-2 of the Exchange Act, and are not required to provide the information under this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Sales of Unregistered Securities

There have been no sales of unregistered
securities within the reporting period covered by this report that would be required to be disclosed pursuant to Item 701 of Regulation
S-K, with the exception of the following:

During the first quarter of 2025,
we issued to three accredited investors 10% convertible debentures in the aggregate principal amount of $225,000 that bear interest at
the rate of 10% per annum, mature on December 31, 2026 and are convertible into shares of our common stock at the initial exercise price
of $2.00 per share. In connection with such issuances, we paid a placement agent fee in an amount equal to 8% of the principal amount
of such debentures. Such debentures were issued by us in reliance upon the exemption from registration