Company: GEDC
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-023834
Chunk: 39

Company: CalEthos, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 1
Chunk 39
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 controls and procedures were not effective.

The
material weakness related to internal control over financial reporting that was identified at June 30, 2025 was that we did not have
sufficient personnel staffing in our accounting and financial reporting department. As a result, we were not able to achieve adequate
segregation of duties and were not able to provide for adequate review of the financial statements.

This
control deficiency could result in a reasonable possibility that material misstatements of the financial statements will not be prevented
or detected on a timely basis. However, our management believes that the material weakness identified does not result in the restatement
of any previously reported financial statements or any other related financial disclosure, and management does not believe that the material
weakness had any effect on the accuracy of our financial statements included as part of this Quarterly Report.

We
will continue to monitor and evaluate the effectiveness of our disclosure controls and procedures and our internal controls over financial
reporting on an ongoing basis and are committed to taking action and implementing additional enhancements or improvements, as necessary
and as funds allow.

Changes
in internal control over financial reporting.

There
were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2025 that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations
on the Effectiveness of Internal Controls

Readers
are cautioned that our management does not expect that our disclosure controls and procedures or our internal control over financial
reporting will necessarily prevent all fraud and material error. An internal control system, no matter how well conceived and operated,
can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations
in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any,
within our control have been detected. The design of any system of controls also is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any control design will succeed in achieving its stated goals under all
potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance
with the policies or procedures may deteriorate.

22

PART
II - OTHER INFORMATION

Item
1. Legal Proceedings

We
know of no material active or pending legal proceeding against our company, nor are we involved as a plaintiff in any material proceeding
or pending litigation.

Item