Company: GEDC
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023306
Chunk: 18

Company: CalEthos, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 1
Chunk 18
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 the period 
     290,000  
     - 
  
    Net carrying amount 
    $471,000  
    $11,000 

In
April 2025, the Company issued a $250,000 note payable to an entity formed
for the benefit of Sean Fontenot, a director of the Company, and his family (Lender’) (“April
2025 Note”). The April 2025 Note has an interest rate of 10% and the outstanding principal and interest were initially payable
on August 31, 2025, which was extended to January 31, 2026, as described below. Also, the Company issued to the Lender a warrant to purchase
500,000 shares (“April 2025 Warrant”) of the Company’s common stock at $0.49 per share. The April 2025 Warrant grant
date fair value of approximately $291,000 was calculated using the Black Scholes fair value option-pricing model with key input variables
provided by management, as of the date of issuance: volatility of 214.75%, the fair value of common stock $0.59, estimated life of 5.0
years, risk-free rate of 3.98% and dividend rate of $0. In accordance with ASC 470 – Debt, the gross proceeds of $250,000 was allocated
between the April 2025 Note and the April 2025 Warrant on a relative fair value basis, therefore, the warrant was recorded at $134,000.

In
July 2025, the Company issued a $500,000
note payable to the Lender (“July 2025 Note”) and extended the April 2025 Note’s maturity date to January
31, 2026. The July 2025 Note has an interest rate of 10%
and the outstanding principal and interest are payable on January
31, 2026. Also, the Company issued to the Lender a warrant to purchase 2,000,000
shares of the Company’s common stock at $0.50
per share. For accounting purposes, the Company allocated the 2,000,000
warrants equally to the modification of the April 2025 1,000,000
warrants (“Modification Warrants”) and the July 2025 Note 1,000,000
warrants (“July 2025 Warrants”) (collectively the “Warrants’). The
W