Company: GEDC
Filing Date: 2025-04-02
Form Type: 10-K
Source: 0001641172-25-002190
Chunk: 38

Company: CalEthos, Inc.
Filing Date: 2025-04-02
Form: 10-K
Item: Item 1
Chunk 38
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 authority to grant new awards under the Equity Plan will terminate
on October 4, 2031. Outstanding awards, as well as the Administrator’s authority with respect thereto, generally will continue
following the expiration or termination of the Equity Plan. Generally speaking, outstanding awards may be amended by the Administrator
(except for a repricing), but the consent of the award holder is required if the amendment (or any Equity Plan amendment) materially
and adversely affects the holder.

Federal
Income Tax Consequences of Awards under the Plan.

The
U.S. federal income tax consequences of the Equity Plan under current federal law, which is subject to change, are summarized in the
following discussion of the general tax principles applicable to the Equity Plan. This summary is not intended to be exhaustive and,
among other considerations, does not describe the deferred compensation provisions of Section 409A of the Code to the extent an award
is subject to and does not satisfy those rules, nor does it describe certain elections under the Code (such as an election under Code
Section 83(b)), alternative minimum tax, or state, local, or international tax consequences.

22

With
respect to nonqualified stock options, we are generally entitled to deduct, and the participant recognizes taxable income in an amount
equal to the difference between the option exercise price and the fair market value of the shares at the time of exercise. With respect
to incentive stock options, we are generally not entitled to a deduction nor does the participant recognize income at the time of exercise,
although the participant may be subject to the U.S. federal alternative minimum tax. Upon a disposition of shares acquired by exercise
of an incentive stock option before the end of the applicable incentive stock option holding periods, the participant generally must
recognize ordinary income equal to the lesser of (i) the fair market value of the shares at the date of exercise minus the exercise price
or (ii) the amount realized upon the disposition of the incentive stock option shares minus the exercise price. Otherwise, a participant’s
disposition of shares acquired upon the exercise of an option (including an incentive stock option for which the incentive stock option
holding periods are met) generally will result in only capital gain or loss.

With
respect to restricted shares, we are generally entitled to deduct and the participant recognizes taxable income in an amount equal to
the excess of the fair market value over the price paid (if any) only at the time the restrictions lapse (unless the recipient elects
to accelerate recognition as of the