Company: GEDC
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-023834
Chunk: 59

Company: CalEthos, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 8
Chunk 59
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 Company to estimate the service
period over which the compensation cost will be recognized. Management has estimated that the first and second development phase (a)
and (b) will be completed 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
option grant date fair value of $690,000 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 range 223.09 to 237.39%, the fair value of common stock $1.99, estimated
life range 4.5 to 5.25 years, risk-free rate of 4.45% and dividend rate of nil. For the six months ended June 30, 2025, the Company recognized compensation
expense of approximately $45,000 related to time-based equity awards, which was recorded as equity-based
compensation. During the same period, the Company recorded a reversal of approximately $54,000 of performance-based compensation expense
that had been capitalized in prior periods as data center campus costs. This amount was recorded as abandoned project costs, upon the
determination that the related project would not be completed.

In
November 2024, the Company issued to a consultant a non-qualified stock option to purchase 350,000
shares of the Company’s common stock at an exercise price of $5.00
per share, the fair market value of the Company’s common stock as of November 15, 2024 grant date. In May 2025, the Company
terminated the contract with the consultant. As of the termination date, none of the stock options were vested. As a result, the
stock option to purchase the 350,000
shares of the Company’s common stock was forfeited and the associated compensation expense of approximately $366,000
was recaptured and classified as abandoned project costs.

In
April 2024, the Company awarded its Chief Strategy and Development officer a non-qualified stock option to purchase 1,000,000
shares of the Company’s common stock at a purchase price of $2.62