Company: GEDC
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-023834
Chunk: 57

Company: CalEthos, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 8
Chunk 57
---
000 
  
    Milestone 4 
     100,000  
     350,000  
     35,000  
     485,000 
  
    Milestone 5 
     100,000  
     350,000  
     35,000  
     485,000 
  
    Total 
     500,000  
     1,750,000  
     175,000  
     2,425,000 

    12

The
revised performance-based milestones are now directly linked to the execution of the Company’s new business model, most
notably, the acquisition or leasing of land suitable for geothermal development. The identification of prospective locations has
emphasized areas with sufficient geothermal activity, evidenced by the presence of other operational or in-development facilities in
the same geographic regions. However, as of the date of the modification, the Company remains in an exploratory and negotiation
stage and has not identified, nor entered into any definitive land lease or purchase agreements. Also, if the Company finds suitable
land for the project, there can be no assurance that financing to lease or acquire the land
will be available in sufficient amounts and on acceptable terms. 

The
Company evaluated the modification of the performance-based awards under ASC 718, Compensation – Stock Compensation and determined
that the change represented a Type IV “improbable-to-improbable” modification. That is, both the original and new milestones
were not considered probable of achievement at the time of modification. Because the Company is in the early stages of exploring and
negotiating suitable land, and considering potential challenges such as regulatory delays, market competition, or failure to reach agreement
with landowners, there remains substantial uncertainty regarding the achievement and timing of the new milestone; therefore:

    ●
    Original
    milestone: Not probable of achievement, as
    the related business objective was discontinued.

    ●
    New
    milestone: Also, not probable at the time of modification,
    as substantial uncertainty remains regarding the successful acquisition or leasing of suitable land.

As
a result, consistent with ASC 718-20-55-108, no compensation expense related to these performance-based stock options
has been recognized as of the modification date. The fair value of the modified awards is measured as of the modification date, but compensation
cost will not be recognized until it becomes probable that the revised milestone will be satisfied.

    13