Company: GEDC
Filing Date: 2025-04-02
Form Type: 10-K
Source: 0001641172-25-002190
Chunk: 819

Company: CalEthos, Inc.
Filing Date: 2025-04-02
Form: 10-K
Item: Item 9B
Chunk 819
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 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.

In
December 2023, the Company offered the holders of the Company’s outstanding convertible promissory notes in the aggregate principal
amount of $341,000 the option to convert such notes into the Company’s common stock at a price ranging from $0.51 to $0.54 per
share. During the three months ended March 31, 2024, the Company converted principal and interest of approximately $341,000 and $119,000,
respectively (a total of $460,000), for 884,942 shares of the Company’s common stock with a fair market value of approximately
$6,928,000 as of the dates of conversion. As the terms of the conversion were not in accordance with the original conversion feature,
the holders of such notes did not provide any concession to the Company, and there was not an inducement to the holders to convert. As
the offer did not have a time limit, the Company has accounted for the conversion in accordance with ASC 470-50-40-4. The difference
between the fair value of the consideration paid of approximately $6,928,000 and the liability of $460,000 was approximately $6,468,000,
which was accounted for as a loss on liability settlement. The loss on the settlement was recorded as a loss on extinguishment of debt
on the statement of operations for the three months ended March 31, 2024.

Interest
expense on these convertible promissory notes amounted to $32,000
and $439,000
for the years ended December 31, 2024
and 2023, respectively, of which $21,000
and $203,000,
respectively, was capitalized as Data Center Campus Cost.

Note