Company: GEDC
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001641172-25-010244
Chunk: 36

Company: CalEthos, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 8
Chunk 36
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 then-current conversion price, subject to certain exceptions.

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.

    10

For
the three months ended March 31, 2025, the Company issued Debentures in the amount of $225,000 for net proceeds of approximately $215,000.

Interest
expense on convertible promissory notes amounted to $37,000 and $4,000 for the three months ended March 31, 2025 and 2024, respectively,
of which $27,000 and $2,000, respectively, was capitalized as data center campus cost. 

Note
5 – Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

Litigation

From
time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. The
Company is not currently a party to any material legal proceedings, nor is the Company aware of any pending or threatened litigation that
would have a material adverse effect on the Company’s business, operating results, cash flows or financial condition should such
litigation be resolved unfavorably.

Note
6 – Stockholders Equity

STOCKHOLDERS EQUITY

Stock
Options

On January 15, 2025, the
Company issued, to a consultant, a non-qualified stock option agreement for the purchase of 350,000
shares of the Company’s common stock for an exercise price of $1.99,
which was the fair value of the Company’s common stock on the grant date. The option vests as to 350,000
shares of common stock as follows:

    ●
    The option becomes
    exercisable as