Company: GEDC
Filing Date: 2025-04-02
Form Type: 10-K
Source: 0001641172-25-002190
Chunk: 482

Company: CalEthos, Inc.
Filing Date: 2025-04-02
Form: 10-K
Item: Item 4
Chunk 482
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 cost for the year ended December 31, 2024 increased to $2,410,000 compared to $252,000 for the year ended December 31, 2023.
The 2024 financing cost included $2,355,000 for the amortization of debt discount related to our notes payable.

Loss
on extinguishment of debt – related party

During the year ended December 31, 2024, the Company and
the note holder agreed to convert the note payable of $1,000,000 into 500,000 shares of the Company’s common stock with a fair value
of $875,000 and exchanged two warrants, previously issued to the note holder, each for 300,000 shares of the Company’s common stock
(“Old Warrant”), for a warrant to purchase 2,258,877 shares of the Company’s common stock (“New Warrant’).
The loss on extinguishment of $2,317,000 is difference between (i) $1,755,000 for the note payable of $1,000,000 and fair value of Old
Warrant of $755,000 and (ii) $4,072,000 the fair value of the common stock of $875,000 and fair value of the New Warrant of $3,197,000.

Loss on
extinguishment of debt

During the years ended December 31, 2024 and 2023, the Company extinguished convertible debentures
with the issuance of shares of the Company’s common stock. The fair value of the common stock issued exceeds the carrying amount
of the principal and accrued interest by approximately $6,468,000 and $986,000, which was recorded as a loss on extinguishment for the
year ended December 31, 2024 and 2023, respectively.

Liquidity
and Capital Resources

Our
working capital as of December 31, 2024 and 2023 was as follows.

    2024  
    2023 
  
    Current assets 
    $296,000  
    $318,000 
  
    Current liabilities 
     (514,000) 
     (1,022,000)
  
    Working capital deficit 
    $(218,000) 
    $(704,000)

Our
working capital deficit decreased from a $704,000 deficit as of December 31, 2023 to a deficit of $218,000 as of December 31