Company: GEDC
Filing Date: 2025-04-02
Form Type: 10-K
Source: 0001641172-25-002190
Chunk: 460

Company: CalEthos, Inc.
Filing Date: 2025-04-02
Form: 10-K
Item: Item 3
Chunk 460
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 a customer-ready data center facility
                                            and receipt of a conditional
    occupancy
    permit for a data center facility.

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 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 $2,437,000
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 166.28%
to 243.04%,
the fair value of common stock $2.62,
estimated life range 2.38
to 5.0
years, risk-free rate of range 4.34%
to 4.72%
and dividend rate of nil.
For the years ended December 31, 2024 and 2023, the Company recorded compensation expenses of approximately $1,317,000
and nil, respectively, which was capitalized as data center cost.

    F-17

December
2023 Stock Options

In
December 2023, the Board of Directors approved the issuance of stock options to the directors for the purchase of 500,000, 750,000 and
404,000 of the Company’s common stock, for a total of 1,654,000 shares, to the three directors (“Directors Options”)
for an exercise price of $0.54, which was the fair market value of the Company’s common stock on the date of issuance. The Director
Options vested on December 31, 2023 and expire on December 29, 2030.

The
Director Options grant date fair value of approximately $860,000 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 of 224.03