Company: GEDC
Filing Date: 2025-04-02
Form Type: 10-K
Source: 0001641172-25-002190
Chunk: 880

Company: CalEthos, Inc.
Filing Date: 2025-04-02
Form: 10-K
Item: Item 10
Chunk 880
---
 from the Notes payable and Convertible promissory notes, used for the DCC
development expenditures.

Note
3 – Notes Payable

NOTES PAYABLE 

Notes
payable transactions for the year ended December 31, are summarized as follows:

SCHEDULE
OF NOTES PAYABLE 

    2024 
     
    2023

    Principal 

    Balance, beginning of the period 
    $11,000 
     
    $
    61,000

    Additions – related party 
     1,000,000 

    -

    Settlement – related party 
     (1,000,000)

    (50,000
    )
  
    Balance, end of the period 
     11,000 

    11,000

    Discount 

    Balance, beginning of the period 
     - 

    -

    Additions – related party 
     2,355,000 

    -

    Amortization – related party 
     2,355,000 

    -

    Balance, end of the period 
     - 

    -

    Net carrying amount 
    $11,000 
     
    $
    11,000

In
February 2024, the Company issued a promissory note (“Promissory Note”) in the principal amount of $1,000,000 that bears
interest at the rate of 10% per annum and originally matured on May 31, 2024 (“Maturity Date”). It also issued a five-year
warrant to purchase up to 200,000 shares of common stock with an initial exercise price of $0.50 per share (“Finance Warrant”).

In
accordance with ASC 470 - Debt, the Company has allocated $1,000,000 of cash proceeds on a relative fair value to the Promissory
Note and the Finance Warrant. The Finance Warrant was valued using the Black Scholes option pricing model for a total fair value of approximately
$1,389,000 based on a 2.5-year term, volatility of 159%, a risk-free equivalent yield of 4.1%, and a stock price of $7.21. The Finance
Warrant was ascribed a relative fair value of approximately $581,000.

    F-12

On
the Maturity Date, the holder of the Promissory Note agreed to extend the Maturity Date to