Company: GEDC
Filing Date: 2025-04-02
Form Type: 10-K
Source: 0001641172-25-002190
Chunk: 386

Company: CalEthos, Inc.
Filing Date: 2025-04-02
Form: 10-K
Item: Item 2
Chunk 386
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 $189,000
was calculated using the Black Scholes fair value option-pricing model with key input variables provided by management, as of the
date of issuance: volatility 322.83%,
the fair value of common stock $0.50,
estimated life of 5.5
years, risk-free rate of 4.12%
and dividend rate of $0.
For the years ended December 31, 2024 and 2023, the Company recorded compensation expenses of approximately $104,000 and $7,000,
which was capitalized as data center cost.

The 350,000
options for the executive advisor will vest based on the following performance milestones:

    a.
    70,000
    upon completion of the initial site development plan and data center design and 100% construction documents.
  
    b.
    35,000
    upon the award of a GMP contract to a construction manager/company.
  
    c.
    35,000
    options upon the Company receiving the permits necessary to start construction of the data center site and facilities.
  
    d.
    70,000
    options upon the completion of a network-ready meeting room in the first data center.
  
    e.
    140,000
    options upon the completion of construction of a customer-ready data center facility and receipt of a conditional occupancy permit
    for a data center facility.

    F-19

The
Company’s management has accounted for the executive advisors’ options in accordance with ASC 718 – Stock Compensation
(“ASC 718”). ASC 718 requires the Company to estimate the service period over which the compensation cost will be recognized.
Management has estimated that the first development phase (a) will be completed by June 30, 2026,
the second development phase (b) by December 31, 2025, the third development phase (c) by March 31, 2026, and the fourth and fifth development
phases (d) and (e) by June 30, 2029. The estimated service period will be adjusted for actual and expected completion date changes.
Any such change will be recognized prospectively, and the remaining deferred compensation will be recognized over the remaining service
period.

The
data center development consultant options grant date fair value of $182,000
was calculated using the Black Scholes fair value option-pricing model with key input variables provided by management, as of the
date of issuance: volatility of 224