Company: GEDC
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023306
Chunk: 10

Company: CalEthos, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 1
Chunk 10
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eto for the year ended December 31, 2024, included in the Company’s annual report on Form 10-K filed
with the SEC on April 2, 2025.

Principles
of Consolidation

The
unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary from the formation
date. All material intercompany transactions and balances have been eliminated in consolidation.

Going
Concern and Liquidity

The
Company incurred a net loss of approximately $5,744,000 for the nine months ended September
30, 2025, had an accumulated deficit of approximately $37,614,000 as of September 30, 2025 and had no recurring revenue from operations.
The Company has financed its activities principally through debt and equity financing and shareholder contributions. Management expects
to incur additional losses and cash outflows in the foreseeable future in connection with its operating activities. These conditions
raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of these consolidated
financial statements.

The
Company’s unaudited condensed consolidated financial statements have been presented on a going concern basis, which contemplates
the realization of assets and the satisfaction of liabilities in the normal course of business.

    5

The
Company is subject to a number of risks similar to those of other similar stage companies, including dependence on key individuals;
successful development, marketing and branding of services; the uncertainty of product development and generation of revenues;
dependence on outside sources of financing; risks associated with research and development; dependence on third-party suppliers and
collaborators; protection of intellectual property; and competition with larger, better-capitalized companies. Ultimately, the
attainment of profitable operations is dependent on future events, including locating and contracting to purchase suitable real
estate with access to gas pipelines or other suitable power sources, contracting for the purchase of natural gas or otherwise
obtaining the necessary power for the development of a data center, obtaining adequate financing to fund the Company’s
operations and generating a level of revenues adequate to support the Company’s cost structure.

The
Company will need to raise debt or equity financing in the future in order to continue its operations and achieve its growth targets.
However, there can be no assurance that such financing will be available in sufficient amounts and on acceptable terms, when and if needed,
or at all. The precise amount and timing of the funding needs cannot be determined accurately at this time The Company believes its cash balances and cash flow