Company: GEDC
Filing Date: 2025-04-02
Form Type: 10-K
Source: 0001641172-25-002190
Chunk: 455

Company: CalEthos, Inc.
Filing Date: 2025-04-02
Form: 10-K
Item: Item 3
Chunk 455
---
,000
    )
  
    Balance, end of period 
     1,410,000 

    341,000

    Debt issuance cost 

    Balance, beginning of period 
     - 

    -

    Additions 
     106,000 

    -

    Amortization 
     (9,000)

    -

    Balance, end of period 
     97,000 

    -

    Net book value 
    $1,313,000 
     
    $
    341,000

In
June 2024, the Company initiated a private place offering for its convertible promissory notes (the “Debentures”). As of
December 31, 2024, the net proceeds were approximately $1,304,000, due to approximately $106,000 paid as debt issuance cost in connection
with the issuance of the Debentures. The Debentures bears 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.

    F-14

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.

In
December 2023, the Company offered the holders of