Company: GEDC
Filing Date: 2025-04-02
Form Type: 10-K
Source: 0001641172-25-002190
Chunk: 409

Company: CalEthos, Inc.
Filing Date: 2025-04-02
Form: 10-K
Item: Item 3
Chunk 409
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 company. Our internal control over financial reporting is designed to provide reasonable assurance,
not absolute assurance, regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles in the United States of America. Internal control over financial reporting
includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary
to permit preparation of financial statements in accordance with generally accepted accounting principles in the United States of America,
and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii)
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that
could have a material effect on the financial statements.

14

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions and that the degree of compliance with the policies or procedures may deteriorate.

Our
management, including our principal executive officer and principal financial officer, conducted an evaluation of the design and operation
of our internal control over financial reporting as of December 31, 2024 based on the criteria set forth in Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation
of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion
on this evaluation. Based on this evaluation, our management concluded our internal control over financial reporting was not effective
as at December 31, 2024 due to the following material weaknesses which are indicative of many small companies with small staff: (i) inadequate
segregation of duties and effective risk assessment; (ii) insufficient written policies and procedures for accounting and financial reporting
with respect to the requirements and application of both US GAAP and SEC guidelines; (iii) inadequate security and restricted access
to computer systems including insufficient disaster recovery plans; and

(iv)
no written whistle-blower policy.

We
plan to take steps to enhance and improve the design of our internal controls over financial reporting when our company has sufficient
staff to allocate responsibilities. During the period covered by this Report, we have not been able to remediate the