Company: GEDC
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023306
Chunk: 38

Company: CalEthos, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 1
Chunk 38
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) within
shareholders’ equity (deficit). Gains or losses from foreign currency transactions are recognized in the consolidated statements
of operations.

Debt
and Debt Discounts

In
accordance with ASC 470-20, Debt with Conversion and Other Options, we first allocate the cash proceeds of any notes we sell with
warrants between the notes and any warrants on a relative fair value basis. Proceeds are then allocated to the conversion feature.

We
account for debt discounts originating in connection with conversion features that remain embedded in the related notes in accordance
with ASC 470-20. These costs are classified on the balance sheet as a direct deduction from the debt liability. We amortize these costs
over the term of our debt agreements as financing cost in the consolidated statement of operations and comprehensive loss.

Stock-Based
Compensation

We
account for our stock-based compensation under ASC 718, “Compensation – Stock Compensation” using the fair value
based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over
the service period, which is usually the vesting period. This guidance establishes standards for the accounting for transactions in which
an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities
in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by
the issuance of those equity instruments.

We
use the fair value method for equity instruments granted to non-employees and use the BSM model for measuring the fair value of options.
The stock-based fair value compensation is determined as of the date of the grant (measurement date) and is recognized over the vesting
periods.

Recent
Accounting Pronouncements

Our
management reviewed all recently-issued accounting standard updates (“ASU’s”) not yet adopted by our company and does
not believe the future adoptions of any such ASU’s may be expected to cause a material impact on our consolidated financial condition
or the results of our operations.

Off-Balance
Sheet Arrangements

We
have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
condition, changes in financial position, revenues and expenses, results of operations, liquidity, capital expenditures or capital resources
that are material to stockholders.

21

Item
3. Quantitative and Qualitative Disclosures about Market Risk

Not