Company: GEDC
Filing Date: 2025-04-02
Form Type: 10-K
Source: 0001641172-25-002190
Chunk: 462

Company: CalEthos, Inc.
Filing Date: 2025-04-02
Form: 10-K
Item: Item 3
Chunk 462
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 for 50% or more of a constructed and operational
wholesale colocation facility’s capacity.

The
Company’s management has accounted for the 2023 Executive 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 December 31, 2025, the second development phase (b) by June 30, 2029, the third development phase (c) by April 1, 2025 and the fourth development phase (d) by June 30, 2027. 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
2023 Executive Options grant date fair value of $1,060,000
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 of 232.67%
to 235.04%,
the fair value of common stock $0.50,
estimated life range of 4.5
years to 4.77
years, risk-free rate of 4.12%
and dividend rate of $0.
For the years ended December 31, 2024 and 2023, the Company recorded compensation expenses of approximately $645,000 and $59,000,
respectively, of which approximately $253,000 and $21,000
was expensed as compensation expense and approximately $392,000 and $38,000
was capitalized as data center cost.

    F-18

In
December 2023, the Board of Directors approved the issuance of stock options to two consultants, an executive advisor and data center
development advisor, for the purchase of 350,000 and 350,000, for each consultant (collectively “2023 Consultant 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
350,000 options for data center development consultant vest, as follows:

    (1)
    43,750
    shares on each of December 6, 2024, 2025 2026 and 2027 for a total of 175,000 shares,