Company: GEDC
Filing Date: 2025-04-02
Form Type: 10-K
Source: 0001641172-25-002190
Chunk: 381

Company: CalEthos, Inc.
Filing Date: 2025-04-02
Form: 10-K
Item: Item 2
Chunk 381
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16

The
Company’s management has accounted for the 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
option grant date fair value of $1,727,000
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 217.4%
to 233.0%,
the fair value of common stock $5.00,
estimated life range 4.5
to 5.3
years, risk-free rate of range 4.3%
and dividend rate of nil.
For the years ended December 31, 2024 and 2023, the Company recorded compensation expenses of approximately $124,000
and nil, respectively, which was capitalized as data center cost.

On April 1, 2024 for the Chief Strategy
and Development officer, the Company awarded a non-qualified stock option to purchase 1,000,000
shares of the Company’s common stock at a purchase price of $2.62,
which was the fair market value of the Company’s common stock on the date of issuance.

The
1,000,000 options vests as follows:

    ●
    168,750
    shares on the date of issuance;
  
    ●
    168,750
    shares on each the 1st, 2nd and 3rd anniversary dates of the issuance date;
  
    ●
    Phase
    (a) 32,500 shares upon the Award of a GMP contract to a construction manager/company;
  
    ●
    Phase
(b) 65,000
shares upon completion of the initial site development
plan and data center design and 100% construction documents;
  
    ●