Document:

Exhibit 4.1

 

OID
CONVERTIBLE PROMISSORY NOTE

 

NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS NOTE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

	Principal
    Amount:	$3,850,000.00	Issue
    Date:	September
    15, 2021
	Purchase
    Price:	$3,500,000.00	 	 
	Original
    Issue Discount:	$350,000.00	 	 

 

OID
CONVERTIBLE PROMISSORY NOTE

 

FOR
VALUE RECEIVED, CALETHOS INC., a Nevada corporation (hereinafter called the “Borrower”), hereby promises
to pay to the order NANOSHA INVESTMENTS, LLC, or its registered assigns (the “Holder”), the sum of $3,850,000.00
on August 31, 2022 (the “Maturity Date”). Any amount of principal on this Note which is not paid on the Maturity Date
shall bear interest at the rate of ten percent (10%) per annum from the Maturity Date until the same is paid (“Default Interest”).
Default Interest shall be computed on the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder (to
the extent not converted into shares of the Borrower’s common stock, par value $0.001 per share (the “Common Stock”),
in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such
address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever
any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due
on the next succeeding day which is a business day. As used in this Note, the term “business day” shall mean any day other
than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive
order to remain closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that
certain Subscription Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Subscription Agreement”).
This Note is one of an issue of OID Convertible Promissory Notes issued pursuant to one or more subscription agreements having terms
substantially identical to the Subscription Agreement (collectively, the “Other Notes” and together with this Note,
the “Notes”).

 

In
lieu of the accrual of interest on the outstanding principal amount hereof on any date prior to the Maturity Date, this Note carries
an original issue discount of $350,000.00 (the “OID”), thus, the purchase price of this Note shall be $3,500,000.00,
computed as follows: $3,850,000.00 initial principal balance less the OID.

 

    	1

    	 

    

 

Prior
to February 28, 2022, the Company shall make no prepayment of all or any portion of this Note without the prior written consent of Holder,
which consent may be withheld, conditioned or delayed in the Holder’s sole and absolute discretion. Other than as set forth in
the preceding sentence, the Company may prepay all or any portion of this Note at any time without penalty.

 

This
Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive
rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

 

The
following terms shall apply to this Note:

 

ARTICLE
I

CONVERSION
RIGHTS

 

1.1 Conversion
Right. The Holder shall have the right from time to time, following the date of this Note in respect of the remaining
outstanding principal amount of this Note to convert all or any part of the outstanding and unpaid principal amount of this Note
into fully paid and non-assessable shares of Common Stock (a “Conversion”), as such Common Stock exists on the
Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be
changed or reclassified, at a conversion price per share of One Dollar Twenty Five Cents ($1.25) per share of Common Stock (subject
to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s
securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary
distributions and similar events) (the “Conversion Price”). The number of shares of Common Stock to be issued
upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable
Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the
“Notice of Conversion”), delivered to the Borrower by the Holder in accordance with Section 1.2 below; provided
that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result
in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion date (the “Conversion
Date”). The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1)
the principal amount of this Note to be converted in such conversion plus (2) at the Holder’s option, Default Interest,
if any, on the amounts referred to in the immediately preceding clause (1).

 

		1.2	Method
                                            of Conversion.

 

(a) Mechanics
of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time from time to
time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means
of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) at the principal office of the
Borrower.

 

(b) Surrender
of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance
with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire unpaid
principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing the principal amount so
converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower,
so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such
records of the Borrower shall, prima facie, be controlling and determinative in the absence of manifest error.
Notwithstanding the foregoing, if any portion of this Note is converted as aforesaid, the Holder may not transfer this Note unless
the Holder first physically surrenders this Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the
order of the Holder a new Note of like tenor, registered as the Holder (upon payment by the Holder of any applicable transfer taxes)
may request, representing in the aggregate the remaining unpaid principal amount of this Note. The Holder and any assignee, by
acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a
portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount
stated on the face hereof.

 

    	2

    	 

    

 

(c) Payment
of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that of
the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities or
property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be
held for the Holder’s account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax or
shall have established to the satisfaction of the Borrower that such tax has been paid.

 

(d) Delivery
of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other
reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section
1.2, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for
the Common Stock issuable upon such conversion within three (3) business days after such receipt (the
“Deadline”).

 

(e) Obligation
of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be
the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued
and unpaid Default Interest, if any, on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on
its obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith
terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such
conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and
deliver the certificates for, or other evidence of, Common Stock shall be absolute and unconditional, irrespective of the absence of
any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any
judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of
the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such
obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of
Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 6:00 p.m., New York,
New York time, on such date.

 

(f) Delivery
of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon
conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated
Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions contained
in Section 1.1 and in this Section 1.2, the Borrower may cause its transfer agent to electronically transmit the Common Stock
issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit
Withdrawal Agent Commission (“DWAC”) system.

 

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1.3 Concerning
the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless (i) such
shares are sold pursuant to an effective registration statement under the Securities Act of 1933, as amended (the
“Securities Act”), or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of
counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the
effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii)
such shares are sold or transferred pursuant to Rule 144 (“Rule 144”) (or a successor rule) under the Securities
Act, or (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell
or otherwise transfer the shares only in accordance with this Section 1.3 and who is an Accredited Investor (as defined in the
Subscription Agreement). Except as otherwise provided in the Subscription Agreement (and subject to the removal provisions set forth
below), until such time as the shares of Common Stock issuable upon conversion of this Note have been registered under the
Securities Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a
particular date that can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion of this Note
that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration
statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as
appropriate:

 

“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE
HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144
OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

 

		1.4	Effect
                                            of Certain Events.

 

(a) Adjustment
Due to Dilutive Issuance. If, at any time when any portion of the Note remains unpaid or unconverted, the Borrower issues or
sells, or in accordance with this Section 1.4(a) hereof is deemed to have issued or sold, any shares of Common Stock for no
consideration or for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts or
allowances in connection therewith) or for consideration per share which is less than the Conversion Price in effect on the date of
such issuance (or deemed issuance) of such shares of Common Stock (a “Dilutive Issuance”), then immediately upon
the Dilutive Issuance, the Conversion Price will be reduced to the amount of the consideration per share received by the Borrower in
such Dilutive Issuance.

 

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The
Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or grants any warrants, rights
or options (not including employee stock option plans), whether or not immediately exercisable, to subscribe for or to purchase Common
Stock or other securities convertible into or exchangeable for Common Stock (“Convertible Securities”) (such warrants,
rights and options to purchase Common Stock or Convertible Securities are hereinafter referred to as “Options”) and
the price per share for which Common Stock is issuable upon the exercise of such Options is less than the Conversion Price then in effect,
then the Conversion Price shall be equal to such price per share. For purposes of the preceding sentence, the “price per share
for which Common Stock is issuable upon the exercise of such Options” is determined by dividing (i) the total amount, if any, received
or receivable by the Borrower as consideration for the issuance or granting of all such Options, plus the minimum aggregate amount of
additional consideration, if any, payable to the Borrower upon the exercise of all such Options, plus, in the case of Convertible Securities
issuable upon the exercise of such Options, the minimum aggregate amount of additional consideration payable upon the conversion or exchange
thereof at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares
of Common Stock issuable upon the exercise of all such Options (assuming full conversion of Convertible Securities, if applicable). No
further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock upon the exercise of such Options
or upon the conversion or exchange of Convertible Securities issuable upon exercise of such Options.

 

Additionally,
the Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or sells any Convertible
Securities, whether or not immediately convertible (other than where the same are issuable upon the exercise of Options), and the price
per share for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price then in effect, then
the Conversion Price shall be equal to such price per share. For the purposes of the preceding sentence, the “price per share for
which Common Stock is issuable upon such conversion or exchange” is determined by dividing (i) the total amount, if any, received
or receivable by the Borrower as consideration for the issuance or sale of all such Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, payable to the Borrower upon the conversion or exchange thereof at the time such Convertible
Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the conversion
or exchange of all such Convertible Securities. No further adjustment to the Conversion Price will be made upon the actual issuance of
such Common Stock upon conversion or exchange of such Convertible Securities.

 

(b) Notice
of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events
described in this Section 1.4, the Borrower, at its expense, shall promptly compute such adjustment or readjustment and prepare and
furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder
a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the
number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon
conversion of this Note.

 

1.5 Status
as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the converted portion of this Note covered thereby
shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights as a Holder of such converted portion of
this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any
remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Borrower to comply
with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common Stock
prior to the tenth (10th) business day after the delivery of a Conversion Notice, then (unless the Holder otherwise elects to retain
its status as a holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note
with respect to such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note
to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been
converted. In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, the right to receive
Default Interest.

 

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		1.6	Mandatory
                                            Conversion.

 

(a) Trigger
Events. Upon (i) the effectiveness of a registration statement under the Securities Act covering the resale of at least 5
million shares of Common Stock, or (ii) the close of business on the sixtieth (60th) consecutive day post effective
registration on which the closing price of the Common Stock on the OTC Markets is at least $3.00 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, the outstanding principal amount of this Note and all Default Interest, if any, shall automatically be converted into
shares of Common Stock at the then effective Conversion Price.

 

(b) Procedural
Requirements. All holders of record of Notes shall be sent written notice of the Mandatory Conversion Time and the place
designated for mandatory conversion of all outstanding Notes pursuant to this Section 1.6. If practicable, such notice need not be
sent in advance of the occurrence of the Mandatory Conversion Time. Upon receipt of such notice, each holder of Notes shall
surrender his, her or its Note for all such shares (or, if such holder alleges that such Note has been lost, stolen or destroyed, a
lost Note affidavit and agreement reasonably acceptable to the Borrower to indemnify the Borrower against any claim that may be made
against the Borrower on account of the alleged loss, theft or destruction of such Note) to the Borrower at the place designated in
such notice. If so required by the Borrower, Notes surrendered for conversion shall be endorsed or accompanied by written instrument
or instruments of transfer, in form satisfactory to the Borrower, duly executed by the registered holder or by his, her or its
attorney duly authorized in writing. All rights with respect to the Notes converted pursuant to this Section 1.6, including the
rights, if any, other than as a holder of Common Stock, will terminate at the Mandatory Conversion Time (notwithstanding the failure
of the holder or holders thereof to surrender the Notes at or prior to such time), except only the rights of the holders thereof,
upon surrender of their Notes (or lost Note affidavit and agreement) therefor, to receive the items provided for in the next
sentence of this Section 1.6(b). As soon as practicable after the Mandatory Conversion Time and the surrender of the Note or Notes
(or lost Note affidavit and agreement), the Borrower shall issue and deliver to such holder, or to his, her or its nominees, a
certificate or certificates for the number of full shares of Common Stock issuable on such conversion in accordance with the
provisions hereof. Such converted Notes shall be cancelled.

 

ARTICLE
II

EVENTS
OF DEFAULT

 

If
any of the following events of default (each, an “Event of Default”) shall occur:

 

2.1 Failure
to Pay Principal or Interest. The Borrower fails to pay the principal hereof or Default Interest thereon when due on this Note,
whether at maturity, upon acceleration or otherwise and such payment default shall have continued uncured for a period of three (3)
business days after the date such payment was due.

 

2.2 Conversion
and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it
will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the
terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any
certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when
required by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent
in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the
Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its
transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to
withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder
upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement,
statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall
continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing)
for three (3) business days after the Holder shall have delivered a Notice of Conversion.

 

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2.3 Breach
of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note or any
related documents including but not limited to the Subscription Agreement and such breach continues for a period of ten (10) days
after written notice thereof to the Borrower from the Holder.

 

2.4 Breach
of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or
certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Subscription Agreement),
shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a
material adverse effect on the rights of the Holder with respect to this Note or the Subscription Agreement.

 

2.5 Receiver
or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for
or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a
receiver or trustee shall otherwise be appointed.

 

2.6 Judgments.
Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or any
of its property or other assets for more than $100,000, and shall remain unvacated, unbonded or unstayed for a period of twenty (20)
days unless otherwise consented to by the Holder.

 

2.7 Bankruptcy.
Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under
any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the
Borrower.

 

2.8 Delisting
of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTC (which
specifically includes the Pink Sheets electronic quotation system) or an equivalent replacement exchange, or a national securities
exchange that is registered with the Securities and Exchange Commission under Section 6 of the Exchange Act.

 

2.9 Liquidation.
Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

2.10 Cessation
of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as
such debts become due.

 

Upon
the occurrence of an Event of Default and at any time thereafter, if any Event of Default shall then be continuing, unless such Event
of Default shall have been waived by a majority in interest of all Notes issued pursuant to a Subscription Agreement, the Holder shall
have the right to declare all obligations hereunder to become immediately due and payable and to exercise any and all rights and remedies
provided for in this Note or under applicable law.

 

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ARTICLE
III

MISCELLANEOUS

 

3.1 Failure
or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

3.2 Notices.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by
hand delivery or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon
hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address
or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a business day during normal business hours where such notice
is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be:

 

If
to the Borrower, to:

 

CalEthos
Inc.

11753
Willard Avenue,

Tustin,
CA 92782

Attention:
Michael Campbell, Chief Executive Officer E-Mail: M1campbell@hotmail.com

 

With
a copy by fax only to (which copy shall not constitute notice):

 

Pryor
Cashman LLP

7
Times Square

New
York, NY 10036 Attention: Eric M. Hellige, Esq.

Facsimile: (212) 326-0806

E-Mail:
ehellige@pryorcashman.com

 

If
to the Holder:

 

Nanosha
Investments, LLC 1202 Walnut Avenue

Long
Beach, CA 90813

Attention: Sean Fontenot

E-Mail:
seanpf@protonmail.com

 

With
a copy by fax only to (which copy shall not constitute notice):

 

K&L
Gates LLP

10100
Santa Monica Blvd., 8th Floor Los

Angeles, CA 90067

Attention:
Justin S. Wales

E-mail:
justin.wales@klgates.com

 

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3.3 Amendments.
This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term
“Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes
issued pursuant to the Subscription Agreement) as originally executed, or if later amended or supplemented, then as so amended or
supplemented.

 

3.4 Assignability.
This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its
successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the
Securities Act). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona
fide margin account or other lending arrangement.

 

3.5 Cost
of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection,
including reasonable attorneys’ fees.

 

3.6 Governing
Law. This Note shall be governed by and construed in accordance with the laws of the State of New York without regard to
principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by
this Note shall be brought only in the state courts of New York or in the federal courts located in the state and county of New
York. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder
and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and
Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s
fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or
unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove
invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each
party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding
in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

3.7 Certain
Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding principal amount
(or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest,
the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be
difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended
to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of
Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The
Borrower and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to
the Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of Common Stock.

 

    	9

    	 

    

 

3.8 Subscription
Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Subscription
Agreement.

 

3.9 Notice
of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common
Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior
notification of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information sent to
shareholders). In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining
shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or
otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any
other securities or property, or to receive any other right, or for the purpose of determining shareholders who are entitled to vote
in connection with any proposed sale, lease or conveyance of all or substantially all of the assets of the Borrower or any proposed
liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days
prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is
earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event,
and a brief statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at
such time. The Borrower shall make a public announcement of any event requiring notification to the Holder hereunder substantially
simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9.

 

3.10 Remedies.
The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a
breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the
Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in
equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any
breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and
without any bond or other security being required.

 

IN
WITNESS WHEREOF, Borrower has caused this Note to be signed as of the date set forth above.

 

	 	CALETHOS INC.
	 	 	 
	 	By:	/s/Michael
    Campbell
	 	Name:	Michael Campbell
	 	Title:	Chief Executive Officer

 

    	10

    	 

    

 

EXHIBIT
A

 

NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert $________   principal amount of the OID Convertible Promissory Note (the
“Note”) of CalEthos, Inc., a Nevada corporation (the “Company”), to which this Notice of
Conversion is attached, into that number of shares of Common Stock (as defined in the Note) set forth below, according to the
conditions of the Note, as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer
taxes, if any.

 

Box
Checked as to applicable instructions:

 

	 	☐	If eligible, the Borrower
  shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or
  its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).

 

	 	 	Name
  of DTC Prime Broker:
	 	 	Account
  Number:

 

	 	☐	The undersigned hereby
  requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which
  numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional
  space is necessary, on an attachment hereto:

 

 

 

	 	Date of Conversion:	_________________
	 	 	 
	 	Applicable Conversion Price:	$ _______________
	 	Number of Shares of Common Stock to be Issued

        Pursuant to Conversion of the Note:
	 ________________
	 	 Amount of Principal Balance Due remaining

        Under the Note after this conversion:
	_________________

 

 

 

Note
Holder

 

 

 

Witness

 

    	11Exhibit
4.2

 

SERIES
A WARRANT

 

THE
WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS IN RELIANCE ON EXEMPTIONS FROM REGISTRATION REQUIREMENTS UNDER
SAID LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS
(1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) THE COMPANY
RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY,
THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.

 

THE
TRANSFER OF THIS WARRANT IS RESTRICTED AS DESCRIBED HEREIN.

 

CALETHOS
INC.

 

Series
A Warrant for the Purchase of up to 1,540,000

Shares of Common Stock, par value $0.001 per share

 

	No.
    WA___	 	1,540,000
    Shares
	Issue
    Date:	September
    15, 2021	 

 

THIS
CERTIFIES that, for value received, Nanosha Investments, LLC, a Delaware limited liability company with an address at 1202 Walnut Avenue,
Long Beach, CA 90813 (including any transferee, the “Holder”), is entitled to subscribe for and purchase from CalEthos
Inc., a Nevada corporation (the “Company”), upon the terms and conditions set forth herein, at any time or from time
to time before 5:00 P.M., New York time, on August 31, 2024 (the “Exercise Period”), up to one million five hundred
forty thousand (1,540,000) shares of Common Stock, par value $0.001 per share (the “Common Stock”), of the Company
at an initial exercise price per share of $1.87, subject to adjustment pursuant to the terms hereof (the “Exercise Price”).
As used herein, the term “this Series A Warrant” shall mean and include this Series A Warrant and any Series A Warrant or
Series A Warrants hereafter issued as a consequence of the exercise or transfer of this Series A Warrant in whole or in part. This Series
A Warrant is one of a series of warrants of like tenor issued by the Company pursuant to Subscription Agreements, dated as of September
1, 2021 (the “Subscription Agreements”), between the Company and the purchaser named therein and initially covering
one (1) Unit (the “Unit”) comprised of an OID Convertible Promissory Note of the Company in the principal amount of
$3,850,000 and a Series A Warrant to purchase up to 1,540,000 shares of Common Stock (collectively, the “Series A Warrants”).

 

The
number of shares of Common Stock issuable upon exercise of this Series A Warrant (the “Series A Warrant Shares”) and
the Exercise Price may be adjusted from time to time as hereinafter set forth.

 

    	1

    	 

    

 

1.
(a) This Series A Warrant may be exercised during the Exercise Period as to all or a lesser number of whole Series A Warrant Shares by
the surrender of this Series A Warrant (with the Exercise Form attached hereto duly executed) to the Company at its principal executive
office, which is located on the date hereof at 11753 Willard Avenue, Tustin, CA 92782, Attention: Chief Financial Officer, or at such
other place as is designated in writing by the Company, together with cash, a certified or bank cashier’s check or wire transfer
of immediately available funds payable to the order of the Company in an amount equal to the Exercise Price multiplied by the number
of Series A Warrant Shares for which this Series A Warrant is being exercised. Upon the exercise of this Series A Warrant pursuant to
this Section 1(a), the Holder shall receive, in addition to the Series A Warrant Shares for which this Series A Warrant is exercised,
a new stock purchase warrant (a “Series B Warrant”) to purchase a number of shares of Common Stock equal to the number
of Series A Warrant Shares purchased at an exercise price equal to $1.87 per share, subject to adjustment. The Series B Warrant shall
be exercisable to purchase shares of Common Stock at any time, or from time-to-time, up to and including 5:00 P.M., New York time, on
the third anniversary date of the date of the issuance of the Series B Warrant; provided, however, if such date is not a Business Day,
then on the Business Day immediately following such date.

 

(b)
This Series A Warrant may also be exercised by the Holder through a cashless exercise, as described in this Section 1(b). This Series
A Warrant may be exercised, in whole or in part, by(i) the delivery to the Company of a duly executed Exercise Form specifying the number
of Series A Warrant Shares to be applied to such exercise, and (ii) the surrender to a common carrier for overnight delivery to the Company,
or as soon as practicable following the date the Holder delivers the Exercise Form to the Company, of this Series A Warrant (or an indemnification
undertaking with respect to this Series A Warrant in the case of its loss, theft or destruction). The number of shares of Common Stock
to be issued upon exercise of this Series A Warrant pursuant to this Section 1(b) shall equal the value of this Series A Warrant (or
the portion thereof being canceled) computed as of the date of delivery of this Series A Warrant to the Company using the following formula:

 

where:

 

	 	X
=	Y(A-B) A
	 	 	 
	 	X
    =	 the number of shares of Common Stock to be issued to the Holder under this Section 1(b);
	 	Y =	 the number of Series A Warrant Shares identified in the Exercise Form as being applied to the subject exercise;
	 	A =	 the Current Market Price on such date; and 
	 	B =	 the Exercise Price on such date

 

For
purposes of this Section 1(b), the “Current Market Price” per share of Common Stock on any day shall mean: (i) if
the principal trading market for such securities is a national or regional securities exchange, the closing price on such exchange on
such day; or (ii) if (i) above is not applicable, and if bid and ask prices for shares of Common Stock are reported in the over-the-counter
market of the OTC Markets Group, Inc., the average of the high bid and low ask prices so reported on such day. Notwithstanding the foregoing,
if there is no reported closing price or bid and ask prices, as the case may be, for the day in question, then the Current Market Price
shall be determined as of the latest date prior to such day for which such closing price or bid and ask prices, as the case may be, are
available, unless such securities have not been traded on an exchange or in the over-the-counter market for 30 or more days immediately
prior to the day in question, in which case the Current Market Price shall be determined in good faith by, and reflected in a formal
resolution of, the Board of Directors of the Company.

 

    	2

    	 

    

 

The
Company acknowledges and agrees that this Series A Warrant was issued on the Issue Date set forth on the face of this Series A Warrant
(the “Issuance Date”). Consequently, the Company acknowledges and agrees that, if the Holder conducts a cashless exercise
pursuant to this Section 1(b), the period during which the Holder held this Series A Warrant may, for purposes of Rule 144 promulgated
under the Securities Act of 1933, as amended (the “Act”), be “tacked” to the period during which the Holder
holds the Series A Warrant Shares received upon such cashless exercise.

 

2.
Upon each exercise of the Holder’s rights to purchase Series A Warrant Shares, the Holder shall be deemed to be the holder of record
of the Series A Warrant Shares issuable upon such exercise, notwithstanding that the transfer books of the Company shall then be closed
or certificates representing such Series A Warrant Shares shall not then have been actually delivered to the Holder. As soon as practicable
after each such exercise of this Series A Warrant, the Company shall issue and deliver to the Holder a certificate or certificates for
the Series A Warrant Shares issuable upon such exercise, registered in the name of the Holder or its designee. If this Series A Warrant
should be exercised in part only, the Company shall, upon surrender of this Series A Warrant for cancellation, execute and deliver a
new Series A Warrant evidencing the right of the Holder to purchase the balance of the Series A Warrant Shares (or portions thereof)
subject to purchase hereunder.

 

3.
(a) Any Series A Warrants issued upon the registration of transfer or exercise in part of this Series A Warrant shall be numbered and
shall be registered in a Series A Warrant Register as they are issued. The Company shall be entitled to treat the registered holder of
any Series A Warrant on the Series A Warrant Register as the owner in fact thereof for all purposes and shall not be bound to recognize
any equitable or other claim to or interest in such Series A Warrant on the part of any other person, and shall not be liable for any
registration or transfer of Series A Warrants which are registered or to be registered in the name of a fiduciary or the nominee of a
fiduciary unless made with the actual knowledge that a fiduciary or nominee is committing a breach of trust in requesting such registration
or transfer, or with the knowledge of such facts that its participation therein amounts to bad faith. The transfer of this Series A Warrant
may be registered on the books of the Company upon delivery thereof duly endorsed by the Holder or by his duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or authority to transfer. In all cases of transfer by an
attorney, executor, administrator, guardian or other legal representative, due authority shall be produced. Upon any registration of
transfer, the Company shall deliver a new Series A Warrant or Series A Warrants to the person entitled thereto. This Series A Warrant
may be exchanged, at the option of the Holder thereof, for another Series A Warrant, or other Series A Warrants of different denominations,
of like tenor and representing in the aggregate the right to purchase a like number of Series A Warrant Shares (or portions thereof),
upon surrender to the Company or its duly authorized agent. Notwithstanding the foregoing, the Company may require prior to registering
any transfer of a Series A Warrant an opinion of counsel reasonably satisfactory to the Company that such transfer complies with the
provisions of the Act, and the rules and regulations thereunder.

 

(b)
The Holder acknowledges that he has been advised by the Company that neither this Series A Warrant nor the Series A Warrant Shares have
been registered under the Act, that this Series A Warrant is being or has been issued and the Series A Warrant Shares may be issued on
the basis of the statutory exemption provided by Section 4(2) of the Act or Rule 506 of Regulation D promulgated thereunder, or both,
relating to transactions by an issuer not involving any public offering, and that the Company’s reliance thereon is based in part
upon the representations made by the original Holder in the Subscription Agreements. The Holder acknowledges that he has been informed
by the Company of, or is otherwise familiar with, the nature of the limitations imposed by the Act and the rules and regulations thereunder
on the transfer of securities. In particular, the Holder agrees that no sale, assignment or transfer of this Series A Warrant or the
Series A Warrant Shares issuable upon exercise hereof shall be valid or effective, and the Company shall not be required to give any
effect to any such sale, assignment or transfer, unless (i) the sale, assignment or transfer of this Series A Warrant or such Series
A Warrant Shares is registered under the Act, it being understood that neither this Series A Warrant nor such Series A Warrant Shares
are currently registered for sale and that the Company has no obligation or intention to so register this Series A Warrant or such Series
A Warrant Shares except as specifically provided for in the Registration Rights Agreement (as defined or described in the Subscription
Agreement), or (ii) this Series A Warrant or such Series A Warrant Shares are sold, assigned or transferred in accordance with all the
requirements and limitations of Rule 144 under the Act, it being understood that Rule 144 is not available at the time of the original
issuance of this Series A Warrant for the sale of this Series A Warrant or such Series A Warrant Shares and that there can be no assurance
that Rule 144 sales will be available at any subsequent time, or (iii) such sale, assignment, or transfer is otherwise exempt from registration
under the Act in the opinion of counsel reasonably acceptable to the Company.

 

    	3

    	 

    

 

4.
The Company shall at all times reserve and keep available out its authorized and unissued Common Stock, solely for the purpose of providing
for the exercise of the rights to purchase all Series A Warrant Shares granted pursuant to the Series A Warrants, such number of shares
of Common Stock as shall, from time to time, be sufficient therefor. The Company covenants that all shares of Common Stock issuable upon
exercise of this Series A Warrant, upon receipt by the Company of the full Exercise Price therefor, shall be validly issued, fully paid,
nonassessable, and free of preemptive rights.

 

5.
(a) In case the Company shall at any time after the date the Series A Warrants were first issued (i) declare a dividend on the outstanding
Common Stock payable in shares of its capital stock, (ii) subdivide the outstanding Common Stock, (iii) combine the outstanding Common
Stock into a smaller number of shares, or (iv) issue any shares of its capital stock by reclassification of the Common Stock (including
any such reclassification in connection with a consolidation or merger in which the Company is the continuing corporation), then, in
each case, the Exercise Price, and the number of Series A Warrant Shares issuable upon exercise of this Series A Warrant, in effect at
the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, shall be
proportionately adjusted so that the Holder after such time shall be entitled to receive the aggregate number and kind of shares which,
if such Series A Warrant had been exercised immediately prior to such time, he would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, combination or reclassification. Such adjustment shall be made successively whenever
any event listed above shall occur.

 

(b)
In case the Company shall issue or fix a record date for the issuance to all holders of Common Stock of rights, options, or warrants
to subscribe for or purchase Common Stock (or securities convertible into or exchangeable for Common Stock) at a price per share (or
having a conversion or exchange price per share, if a security convertible into or exchangeable for Common Stock) less than the then
applicable Exercise Price per share on such record date, then, in each case, the Exercise Price shall be adjusted by multiplying the
Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding on such record date plus the number of shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock so to be offered (or the aggregate initial conversion or exchange price of the convertible or exchangeable
securities so to be offered) would purchase at such Exercise Price and the denominator of which shall be the number of shares of Common
Stock outstanding on such record date plus the number of additional shares of Common Stock to be offered for subscription or purchase
(or into which the convertible or exchangeable securities so to be offered are initially convertible or exchangeable). Such adjustment
shall become effective at the close of business on such record date; provided, however, that, to the extent the shares of Common Stock
(or securities convertible into or exchangeable for shares of Common Stock) are not delivered, the Exercise Price shall be readjusted
after the expiration of such rights, options, or warrants (but only with respect to warrants exercised after such expiration), to the
Exercise Price which would then be in effect had the adjustments made upon the issuance of such rights, options, or warrants been made
upon the basis of delivery of only the number of shares of Common Stock (or securities convertible into or exchangeable for shares of
Common Stock) actually issued. In case any subscription price may be paid in a consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be as determined in good faith by the board of directors of the Company, whose
determination shall be conclusive.

 

    	4

    	 

    

 

(c)
In case the Company shall distribute to all holders of Common Stock (including any such distribution made to the stockholders of the
Company in connection with a consolidation or merger in which the Company is the continuing corporation) evidences of its indebtedness,
cash (other than any cash dividend which, together with any cash dividends paid within the 12 months prior to the record date for such
distribution, does not exceed 5% of the then applicable Exercise Price at the record date for such distribution) or assets (other than
distributions and dividends payable in shares of Common Stock), or rights, options or warrants to subscribe for or purchase Common Stock,
or securities convertible into or exchangeable for shares of Common Stock (excluding those with respect to the issuance of which an adjustment
of the Exercise Price is provided pursuant to Section 5(b) hereof), then, in each case, the Exercise Price shall be adjusted by multiplying
the Exercise Price in effect immediately prior to the record date for the determination of stockholders entitled to receive such distribution
by a fraction, the numerator of which shall be the then applicable Exercise Price per share of Common Stock on such record date, less
the fair market value (as determined in good faith by, and reflected in a formal resolution of, the board of directors of the Company,
whose determination shall be conclusive absent manifest error) of the portion of the evidences of indebtedness or assets so to be distributed,
or of such rights, options or warrants or convertible or exchangeable securities, or the amount of such cash, applicable to one share,
and the denominator of which shall be such Exercise Price per share of Common Stock. Such adjustment shall become effective at the close
of business on such record date.

 

(d)
No adjustment in the Exercise Price shall be required if such adjustment is less than $.01; provided, however, that any adjustments which
by reason of this Section 5(d) are not required to be made shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 5 shall be made to the nearest cent or to the nearest one-thousandth of a share, as the case may
be.

 

(e)
In any case in which this Section 5 shall require that an adjustment in the Exercise Price be made effective as of a record date for
a specified event, the Company may elect to defer, until the occurrence of such event, issuing to the Holder, if the Holder exercised
this Series A Warrant after such record date, the shares of Common Stock, if any, issuable upon such exercise over and above the shares
of Common Stock, if any, issuable upon such exercise on the basis of the Exercise Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to the Holder a due bill or other appropriate instrument evidencing the Holder’s right
to receive such additional shares upon the occurrence of the event requiring such adjustment.

 

(f)
Upon each adjustment of the Exercise Price as a result of the calculations made in Sections 5(b) or 5(c) hereof, this Series A Warrant
shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of shares (calculated to the nearest thousandth)
obtained by multiplying (A) the number of shares purchasable upon exercise of this Series A Warrant prior to such adjustment by (B) a
fraction, the numerator of which is the Exercise Price in effect prior to such adjustment and the denominator of which is the Exercise
Price in effect immediately after such adjustment.

 

(g)
Whenever there shall be an adjustment as provided in this Section 5, the Company shall promptly cause written notice thereof to be sent
by registered mail, postage prepaid, to the Holder, at its address as it shall appear in the Series A Warrant Register, which notice
shall be accompanied by an officer’s certificate setting forth the number of Series A Warrant Shares purchasable upon the exercise
of this Series A Warrant and the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such
adjustment and the computation thereof, which officer’s certificate shall be conclusive evidence of the correctness of any such
adjustment absent manifest error.

 

    	5

    	 

    

 

(h)
The Company shall not be required to issue fractions of shares of Common Stock or other capital stock of the Company upon the exercise
of this Series A Warrant. If any fraction of a share would be issuable on the exercise of this Series A Warrant (or specified portions
thereof), the Company shall purchase such fraction for an amount in cash equal to the same fraction of the Exercise Price of such share
of Common Stock on the date of exercise of this Series A Warrant.

 

6.
(a) In case of any consolidation or combination with or merger of the Company with or into another corporation or entity (other than
a merger, consolidation or combination in which the Company is the surviving or continuing corporation), or in case of any sale,
lease or conveyance to another corporation, entity or person of the property and assets of any nature of the Company as an entirety
or substantially as an entirety, or any compulsory share exchange, pursuant to which share exchange the Common Stock is converted
into other securities, cash or other property (collectively an “Extraordinary Event”), then, as a condition of
such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition, lawful and adequate provision
shall be made whereby the Holder shall thereafter have the right to purchase and receive upon the basis and upon the terms and
conditions herein specified and in lieu of the Series A Warrant Shares immediately theretofore issuable upon exercise of this Series
A Warrant, such shares of stock, securities or assets as would have been issuable or payable with respect to or in exchange for a
number of Series A Warrant Shares equal to the number of Series A Warrant Shares immediately theretofore issuable upon exercise of
this Series A Warrant, had such Extraordinary Event not taken place, and in any such case appropriate provision shall be made with
respect to the rights and interests of the Holder to the end that the provisions hereof (including, without limitation, provision
for adjustment of the Exercise Price) shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any
shares of stock, securities or assets thereafter deliverable upon the exercise hereof. The Company shall not effect any such
Extraordinary Event unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the
Company) resulting from such Extraordinary Event shall assume the obligation to deliver to the Holder, at the last address of the
Holder appearing on the books of the Company, such shares of stock, securities or assets as, in accordance with the foregoing
provisions, the Holder may be entitled to purchase, and the other obligations under this Series A Warrant. The provisions of this
paragraph shall similarly apply to successive Extraordinary Events.

 

(b)
In case of any reclassification or change of the shares of Common Stock issuable upon exercise of this Series A Warrant (other than a
change in par value or from no par value to a specified par value, or as a result of a subdivision or combination, but including any
change in the shares into two or more classes or series of shares), or in case of any consolidation, combination or merger of another
corporation or entity into the Company in which the Company is the continuing corporation and in which there is a reclassification or
change (including a change to the right to receive cash or other property) of the shares of Common Stock (other than a change in par
value, or from no par value to a specified par value, or as a result of a subdivision or combination, but including any change in the
shares into two or more classes or series of shares), the Holder shall have the right thereafter to receive upon exercise of this Series
A Warrant solely the kind and amount of shares of stock and other securities, property or cash, or any combination thereof receivable
upon such reclassification, change, consolidation, combination or merger by a holder of the number of shares of Common Stock for which
this Series A Warrant might have been exercised immediately prior to such reclassification, change, consolidation, combination or merger.
Thereafter, appropriate provision shall be made for adjustments, which shall be as nearly equivalent as practicable to the adjustments
in Section 5.

 

    	6

    	 

    

 

(c)
The above provisions of this Section 6 shall similarly apply to successive reclassifications and changes of shares of Common Stock and
to successive consolidations, combinations, mergers, sales, leases or conveyances.

 

7.
In case at any time the Company shall propose to:

 

(a)
pay any dividend or make any distribution on shares of Common Stock in shares of Common Stock or make any other distribution (other than
regularly scheduled cash dividends which are not in a greater amount per share than the most recent such cash dividend) to all holders
of Common Stock; or

 

(b)
issue any rights, warrants or other securities to all holders of Common Stock entitling them to purchase any additional shares of Common
Stock or any other rights, warrants or other securities; or

 

(c)
effect any reclassification or change of outstanding shares of Common Stock, or any consolidation, merger, sale, lease or conveyance
of property or other Extraordinary Event; or

 

(d)
effect any liquidation, dissolution or winding-up of the Company; or

 

(e)
take any other action which would cause an adjustment to the Exercise Price; then, and in any one or more of such cases, the Company
shall give written notice thereof, by registered mail, postage prepaid, to the Holder at the Holder’s address as it shall
appear in the Series A Warrant Register, mailed at least 15 days prior to (i) the date as of which the holders of record of shares
of Common Stock to be entitled to receive any such dividend, distribution, rights, warrants or other securities are to be
determined, (ii) the date on which any such reclassification, change of outstanding shares of Common Stock, consolidation, merger,
sale, lease, conveyance of property, liquidation, dissolution or winding-up is expected to become effective, and the date as of which
it is expected that holders of record of shares of Common Stock shall be entitled to exchange their shares for securities or other
property, if any, deliverable upon such reclassification, change of outstanding shares, consolidation, merger, sale, lease,
conveyance of property, liquidation, dissolution, or winding-up, or (iii) the date of such action which would require an adjustment
to the Exercise Price.

 

8.
The issuance of any shares or other securities upon the exercise of this Series A Warrant, and the delivery of certificates or other
instruments representing such shares or other securities, shall be made without charge to the Holder for any tax or other charge in respect
of such issuance. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of any certificate in a name other than that of the Holder and the Company shall not be required to issue or
deliver any such certificate unless and until the person or persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

 

    	7

    	 

    

 

9.
Unless registered pursuant to the Registration Rights Agreement, the Series A Warrant Shares issued upon exercise of this Series A Warrant
shall be subject to a stop transfer order and the certificate or certificates evidencing such Series A Warrant Shares shall bear the
following legend:

 

“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS,
OR (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY
TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.”

 

10.
Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of any Series A Warrant (and upon
surrender of any Series A Warrant if mutilated), the Company shall execute and deliver to the Holder thereof a new Series A Warrant of
like date, tenor and denomination.

 

11.
The holder of this Series A Warrant shall not have solely on account of such status, any rights of a stockholder of the Company, either
at law or in equity, or to any notice of meetings of stockholders or of any other proceedings of the Company, except as provided in this
Series A Warrant.

 

12.
Any term of this Series A Warrant may be amended or waived upon the written consent of the Company and the holders of Series A
Warrants representing at least 50% of the number of shares of Common Stock then subject to all outstanding Series A Warrants (the
“Majority Holders”); provided, that (x) any such amendment or waiver must apply to all Series A Warrants; and (y)
the number of Series A Warrant Shares subject to this Series A Warrant, the Exercise Price and the Exercise Period may not be
amended, and the right to exercise this Series A Warrant may not be altered or waived, without the written consent of the
Holder.

 

13.
This Series A Warrant has been negotiated and consummated in the State of New York and shall be governed by, and construed in accordance
with the laws of the State of New York applicable to contracts made and performed within such State, without regard to principles governing
conflicts of law. The Company and, by accepting this Series A Warrant, the Holder, each irrevocably submits to the exclusive jurisdiction
of the courts of the State of New York located in New York County and the United States District Court for the Southern District of New
York for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Series A Warrant and the transactions
contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere
in the world by the same methods as are specified for the giving of notices under the Subscription Agreements. The Company and, by accepting
this Series A Warrant, the Holder, each irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding
and to the laying of venue in such court. The Company and, by accepting this Series A Warrant, the Holder, each irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE COMPANY AND,
BY ITS ACCEPTANCE HEREOF, THE HOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT
AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

	Dated:
    September 21, 2021	 
	 	 
	 	CALETHOS
    INC.
	 	 
	 	By:	/s/Michael
    Campbell
	 	Name:	Michael
    Campbell
	 	Title:	Chief
    Executive Officer

 

    	8

    	 

    

 

CALETHOS
INC.

 

FORM
OF ASSIGNMENT

 

(To
be executed by the registered holder if such holder

desires
to transfer the attached Series A Warrant.)

 

	To:	CalEthos
    Inc.
	 	11753
    Willard Avenue
	 	Tustin,
    CA 92782
	 	Attention:
    Michael Campbell

 

FOR
VALUE RECEIVED-,_______________________hereby sells, assigns, and transfers unto__________that certain Series A Warrant
(Number WA- ) to purchase ______ shares of Common Stock, par value $0.001 per share, of CalEthos Inc. (the
“Company”), together with all right, title, and interest therein, and does hereby irrevocably constitute and
appoint _____attorney to transfer such Series A Warrant on the books of the Company, with full power of substitution.

 

	Dated:
______________________	 

 

		Signature: ____________________________________

 

Notice:

 

The
signature on the foregoing Assignment must correspond to the name as written upon the face of this Series A Warrant in every particular,
without alteration or enlargement or any change whatsoever.

 

    	9

    	 

    

 

CALETHOS
INC. EXERCISE FORM

 

(To
be completed and signed only upon exercise of the Series A Warrants)

 

	To:	CalEthos
    Inc.
	 	11753
    Willard Avenue
	 	Tustin,
    CA 92782
	 	Attention:
    Michael Campbell

 

The
undersigned hereby exercises his or its rights to purchase______ Series A Warrant Shares covered by the within Series A
Warrant and tenders payment herewith in the amount of $______ by [tendering cash, a wire of immediately available funds or
delivering a certified check or bank cashier’s check, payable to the order of the Company] [surrendering__________ shares
of Common Stock received upon exercise of the attached Series A Warrant, which shares have a Current Market Price equal to such
payment] in accordance with the terms thereof, and requests that certificates for such securities be issued in the name of, and
delivered to:

 

	 	
	 	
	 	
	 	(Print
    Name, Address and Social Security

    or
    Tax Identification Number)

 

and,
if such number of Series A Warrant Shares shall not be all the Series A Warrant Shares covered by the within Series A Warrant, that a
new Series A Warrant for the balance of the Series A Warrant Shares covered by the within Series A Warrant be registered in the name
of, and delivered to, the undersigned at the address stated below.

 

	Dated:	_____________,	Name:	
	 	 	 	(Please
    Print)
	 	 	 	 
	 	 	Address:
    	
	 	 	 	
	 	 	 	
	 	 	 	
	 	 	 	(Signature)

 

    	10

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