CalEthos Shifts Data Center Strategy Amidst Mounting Losses

TL;DR

**GEDC is a speculative bet on a data center pivot, but with no revenue and a massive deficit, it's a high-risk gamble that could leave investors holding the bag.**

AI Summary

CalEthos, Inc. (GEDC) reported a net loss of $5,744,000 for the nine months ended September 30, 2025, a significant improvement from the $9,329,000 net loss in the prior-year period. Despite this, the company has no recurring revenue and an accumulated deficit of $37,614,000 as of September 30, 2025. Key business changes include the abandonment of its Imperial County, California data center project in May 2025, resulting in $4,581,000 in abandoned project costs for the nine months ended September 30, 2025. This decision was driven by delays in environmental studies, community concerns, and regulatory approvals. CalEthos subsequently formed TerraVolt Infrastructure Inc. in May 2025 to focus on sustainable data center infrastructure in states with more favorable regulatory environments and natural gas access. The company's total assets decreased sharply from $6,145,000 at December 31, 2024, to $287,000 at September 30, 2025, primarily due to the write-off of data center campus costs. Total liabilities increased from $1,828,000 to $2,730,000 over the same period, driven by increases in accounts payable and related party notes payable. The company's ability to continue as a going concern is in substantial doubt, as it will need to raise additional debt or equity financing to fund future operations and growth targets.

Why It Matters

CalEthos's pivot from its Imperial County data center project to a new strategy under TerraVolt Infrastructure Inc. signals a significant shift for investors, indicating the company is still in a highly speculative, pre-revenue phase. The substantial accumulated deficit of $37,614,000 and the going concern warning highlight severe financial instability, making it a high-risk investment. For employees, the strategic change could mean a re-evaluation of roles and skills needed for the new focus on natural gas-powered data centers. Customers, particularly hyperscalers and colocation providers, will be watching to see if TerraVolt can successfully deliver its 'Infrastructure-as-a-Service' platform in a competitive market dominated by established players like Equinix and Digital Realty.

Risk Assessment

Risk Level: high — The company reported a net loss of $5,744,000 for the nine months ended September 30, 2025, and has an accumulated deficit of $37,614,000. Furthermore, the filing explicitly states, "These conditions raise substantial doubt about the Company's ability to continue as a going concern for one year from the issuance of these consolidated financial statements," indicating severe financial distress and reliance on future financing.

Analyst Insight

Investors should avoid CalEthos (GEDC) given its substantial accumulated deficit of $37,614,000, lack of recurring revenue, and explicit going concern warning. The company's strategic pivot to TerraVolt Infrastructure Inc. is highly speculative and requires significant future financing, which is not guaranteed to be available on acceptable terms.

Financial Highlights

debt To Equity

N/A

revenue

$0

operating Margin

N/A

total Assets

$287,000

total Debt

$2,730,000

net Income

-$5,744,000

eps

-$0.22

gross Margin

N/A

cash Position

N/A

revenue Growth

N/A

Key Numbers

• $5.74M — Net Loss (For the nine months ended September 30, 2025, an improvement from $9.33M in 2024.)
• $37.61M — Accumulated Deficit (As of September 30, 2025, indicating significant historical losses.)
• $4.58M — Abandoned Project Costs (Incurred for the nine months ended September 30, 2025, related to the Imperial County data center.)
• $287K — Total Assets (As of September 30, 2025, a sharp decrease from $6.15M at December 31, 2024.)
• $2.73M — Total Liabilities (As of September 30, 2025, an increase from $1.83M at December 31, 2024.)
• 0% — Revenue Growth (The company reported no revenues for the periods presented.)
• $0.22 — Net Loss Per Share (For the nine months ended September 30, 2025, compared to $0.37 in 2024.)
• 25,730,540 — Outstanding Shares (As of November 14, 2025.)

Key Players & Entities

• CalEthos, Inc. (company) — registrant
• TerraVolt Infrastructure Inc. (company) — wholly-owned subsidiary formed in May 2025
• Imperial County, California (location) — abandoned data center project site
• Securities and Exchange Commission (regulator) — filing oversight
• $5,744,000 (dollar_amount) — net loss for nine months ended September 30, 2025
• $37,614,000 (dollar_amount) — accumulated deficit as of September 30, 2025
• $4,581,000 (dollar_amount) — abandoned project costs for nine months ended September 30, 2025
• $287,000 (dollar_amount) — total assets as of September 30, 2025
• $6,145,000 (dollar_amount) — total assets as of December 31, 2024
• $2,730,000 (dollar_amount) — total liabilities as of September 30, 2025

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: CalEthos, Inc. has no recurring revenue and an accumulated deficit of $37,614,000. The company's cash balances and cash flow from operations are insufficient to fund operations for the next twelve months, necessitating additional debt or equity financing. Failure to secure funding raises substantial doubt about its ability to continue as a going concern.
• Project Abandonment and Strategic Shift [high — operational]: The company abandoned its Imperial County data center project in May 2025, incurring $4,581,000 in abandoned project costs. This was due to delays in environmental studies, community concerns, and regulatory approvals. The company has shifted focus to TerraVolt Infrastructure Inc. for sustainable data center infrastructure in more favorable regulatory environments.
• Asset and Liability Volatility [medium — financial]: Total assets decreased sharply from $6,145,000 at December 31, 2024, to $287,000 at September 30, 2025, primarily due to write-offs. Total liabilities increased from $1,828,000 to $2,730,000, driven by accounts payable and related party notes payable.
• Dependence on Future Financing [high — market]: The company's ability to achieve growth targets and continue operations is contingent upon raising additional debt or equity financing. There is no assurance that such financing will be available in sufficient amounts or on acceptable terms.
• Regulatory Environment Dependence [medium — regulatory]: The formation of TerraVolt Infrastructure Inc. indicates a strategic shift to states with more favorable regulatory environments. Delays in environmental studies, community concerns, and regulatory approvals were cited as reasons for abandoning the Imperial County project, highlighting regulatory risk.
• Competition with Larger Companies [medium — market]: CalEthos faces competition with larger, better-capitalized companies in the data center infrastructure space. This competitive landscape can impact market penetration and profitability.

Industry Context

The data center infrastructure industry is capital-intensive and competitive. Companies are increasingly focusing on sustainability and regulatory compliance. CalEthos's strategic shift to TerraVolt Infrastructure Inc. reflects a trend towards seeking more favorable regulatory environments and power sources, such as natural gas access, to mitigate development risks and operational costs.

Regulatory Implications

CalEthos faces significant regulatory hurdles, as evidenced by the abandonment of its Imperial County project due to delays in environmental studies and regulatory approvals. The company's new strategy with TerraVolt Infrastructure Inc. is explicitly designed to target states with more favorable regulatory landscapes, indicating a high sensitivity to regulatory environments.

What Investors Should Do

1. Monitor future financing rounds closely for terms and availability, as this is critical for the company's survival and growth.
2. Evaluate the success of TerraVolt Infrastructure Inc. in securing new sites and commencing operations, as this represents the company's new core strategy.
3. Assess the company's ability to manage its increased liabilities, particularly accounts payable and related party notes, given the lack of revenue.
4. Understand the long-term viability of a business model entirely dependent on securing significant future funding without current revenue streams.

Key Dates

• 2025-05-01: Abandonment of Imperial County data center project — Resulted in $4,581,000 in abandoned project costs and a strategic pivot to TerraVolt Infrastructure Inc.
• 2025-05-01: Formation of TerraVolt Infrastructure Inc. — Marks a strategic shift to focus on sustainable data center infrastructure in states with more favorable regulatory environments.
• 2025-09-30: End of Nine-Month Period — Reported net loss of $5,744,000 and total assets of $287,000, with substantial doubt about going concern.
• 2024-12-31: Year End — Total assets were $6,145,000 and total liabilities were $1,828,000 prior to the significant asset write-downs.

Glossary

Accumulated Deficit

The total net losses of a company over its lifetime that have not been offset by net income. (Indicates CalEthos has incurred significant historical losses, totaling $37,614,000 as of September 30, 2025.)

Going Concern

An assumption that a company will continue to operate for the foreseeable future, without the intention or need for liquidation or to otherwise cease trading. (The company's ability to continue as a going concern is in substantial doubt due to its lack of recurring revenue and need for future financing.)

Abandoned Project Costs

Expenses incurred for a project that has been discontinued or terminated before completion. (CalEthos incurred $4,581,000 in such costs related to its Imperial County data center project.)

CODM (Chief Operating Decision Maker)

The individual or group responsible for allocating resources to the reportable segments and assessing their performance. (CalEthos's CODM is the CEO, and the company operates as one reportable segment, with decisions based on consolidated net income/loss.)

Year-Over-Year Comparison

Compared to the prior-year period, CalEthos has significantly reduced its net loss from $9,329,000 to $5,744,000 for the nine months ended September 30, 2025. However, this improvement is overshadowed by a drastic decrease in total assets from $6,145,000 to $287,000, largely due to project abandonment costs. Liabilities have increased from $1,828,000 to $2,730,000. The company's lack of recurring revenue and substantial accumulated deficit remain critical concerns, with the going concern status now in substantial doubt.

Filing Documents

• form10-q.htm (10-Q) — 834KB
• ex31-1.htm (EX-31.1) — 12KB
• ex31-2.htm (EX-31.2) — 12KB
• ex32-1.htm (EX-32.1) — 6KB
• ex32-2.htm (EX-32.2) — 7KB
• 0001493152-25-023306.txt ( ) — 4457KB
• gedc-20250930.xsd (EX-101.SCH) — 47KB
• gedc-20250930_cal.xml (EX-101.CAL) — 34KB
• gedc-20250930_def.xml (EX-101.DEF) — 126KB
• gedc-20250930_lab.xml (EX-101.LAB) — 367KB
• gedc-20250930_pre.xml (EX-101.PRE) — 237KB
• form10-q_htm.xml (XML) — 620KB

Financial Statements (unaudited)

Financial Statements (unaudited) 1 Condensed Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024 1 Condensed Consolidated Statements of Operations for the three-month and nine-month periods ended September 30, 2025 and 2024 (unaudited) 2 Condensed Consolidated Statements of Changes in Stockholders' Equity for the three-month and nine-month periods ended September 30, 2025 and 2024 (unaudited). 3 Condensed Consolidated Statements of Cash Flows for the nine-month periods ended September 30, 2025 and 2024 (unaudited) 4 Notes to the Condensed Consolidated Financial Statements (Unaudited) 5 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 17 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 22 Item 4.

Controls and Procedures

Controls and Procedures 22 PART II OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 23 Item 1A.

Risk Factors

Risk Factors 23 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 23 Item 3. Default Upon Senior Securities 23 Item 4. Mine Safety Disclosures 23 Item 5. Other Information 23 Item 6. Exhibits 23

Signatures

Signatures 24 i CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain information set forth in this Quarterly Report on Form 10-Q, including in Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere herein, with respect to our financial condition, results of operations and business that are not historical facts are "forward-looking statements". Forward-looking statements can be identified by the use of forward-looking terminology, such as "anticipate", "believe", "expect", "plan", "intend", "seek", "estimate", "project", "could", "may" or the negative thereof or other variations thereon, or by discussions of strategy that involve risks and uncertainties. Management wishes to caution the reader of the forward-looking statements that any such statements that are contained in this report reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties and other factors, including, but not limited to, economic, competitive, regulatory, technological, key employees, and general business factors affecting our operations, markets, growth, services, products and other factors, some of which are described in this report and some of which are discussed in our other filings with the Securities and Exchange Commission. These forward-looking statements are only estimates or predictions. No assurances can be given regarding the achievement of future results, as actual results may differ materially as a result of risks facing our company, and actual events may differ from the assumptions underlying the statements that have been made regarding anticipated events. Important factors to consider in evaluating any forward-looking statements include: our ability to finance and complete the design and construction of our proposed data center operations; our ability to implement our business plan; our ability to attract key personnel; our ability to operate profitably

forward-looking statements may not apply to us at certain times

forward-looking statements may not apply to us at certain times. Throughout this report, unless otherwise designated, the terms "we," "us," "our," "the Company" and "our company" refer to CalEthos, Inc., a Nevada corporation. All amounts are in U.S. Dollars, unless otherwise indicated. ii PART I - FINANCIAL INFORMATION Item 1: Financial Statements CalEthos, Inc. Condensed Consolidated Balance Sheets As of September 30, 2025 December 31, 2024 (Unaudited) Assets Current assets Cash and cash equivalents $ 274,000 $ 286,000 Prepaid and other current expenses 13,000 10,000 Total current assets 287,000 296,000 Data center campus costs - 5,849,000 Total assets $ 287,000 $ 6,145,000 Liabilities and stockholders' (deficit) equity Current liabilities Accounts payable and accrued expenses $ 692,000 $ 504,000 Notes payable – related parties, net 471,000 11,000 Total current liabilities 1,163,000 515,000 Convertible debentures, net 1,567,000 1,313,000 Total liabilities 2,730,000 1,828,000 Stockholders' (deficit) equity Common stock par value $ 0.001 : 100,000,000 shares authorized; 25,730,540 and 25,730,540 shares issued and outstanding 26,000 26,000 Additional paid-in capital 35,137,000 36,153,000 Other comprehensive income 9,000 9,000 Stock subscription receivable ( 1,000 ) ( 1,000 ) Accumulated deficit ( 37,614,000 ) ( 31,870,000 ) Total stockholders'(deficit) equity ( 2,443,000 ) 4,317,000 Total liabilities and stockholders' (deficit) equity $ 287,000 $ 6,145,000 See the accompanying notes to these unaudited condensed consolidated financial statements. 1 CalEthos, Inc. Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss 2025 2024 2025 2024 For the Three Months Ended September 30, For the Nine Months Ended September 30, 2025 2024 2025 2024 Revenues $ - $ - $ - $ - Operating Expenses Professional fees 93,000 44,000 27

financial statements

financial statements. The Company's unaudited condensed consolidated financial statements have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. 5 The Company is subject to a number of risks similar to those of other similar stage companies, including dependence on key individuals; successful development, marketing and branding of services; the uncertainty of product development and generation of revenues; dependence on outside sources of financing; risks associated with research and development; dependence on third-party suppliers and collaborators; protection of intellectual property; and competition with larger, better-capitalized companies. Ultimately, the attainment of profitable operations is dependent on future events, including locating and contracting to purchase suitable real estate with access to gas pipelines or other suitable power sources, contracting for the purchase of natural gas or otherwise obtaining the necessary power for the development of a data center, obtaining adequate financing to fund the Company's operations and generating a level of revenues adequate to support the Company's cost structure. The Company will need to raise debt or equity financing in the future in order to continue its operations and achieve its growth targets. However, there can be no assurance that such financing will be available in sufficient amounts and on acceptable terms, when and if needed, or at all. The precise amount and timing of the funding needs cannot be determined accurately at this time The Company believes its cash balances and cash flow from operations will not be sufficient to fund its operations and growth for the next twelve months from the issuance date of these financial statements. If the Company is unable to raise additional funding from investors or through other avenues, it may not be able to continue as a going concern. The accompa

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