Company: GEDC
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023306
Chunk: 25

Company: CalEthos, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 1
Chunk 25
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2027, January 16, 2028, and January 16, 2029 provided that the optionee
    is a consultant, an employee or a Board member in good standing with the Company on such applicable vesting date. 

    ●
    The
    option vests as to the remaining 175,000 shares of common stock based on the employee completing the modified milestones, as disclosed
    above. 

    14

The
Company’s management has accounted for the options in accordance with ASC 718, which requires the 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 nine months ended September 30, 2025, the Company
recognized compensation expense of approximately $90,000 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