Company: GEDC
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023306
Chunk: 23

Company: CalEthos, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 1
Chunk 23
---
 Senior Counsel  
    Total 
  
    Milestone 1 
     100,000  
     350,000  
     35,000  
     485,000 
  
    Milestone 2 
     100,000  
     350,000  
     35,000  
     485,000 
  
    Milestone 3 
     100,000  
     350,000  
     35,000  
     485,000 
  
    Milestone 4 
     100,000  
     350,000  
     35,000  
     485,000 
  
    Milestone 5 
     100,000  
     350,000  
     35,000  
     485,000 
  
    Total 
     500,000  
     1,750,000  
     175,000  
     2,425,000 

    12

The
revised performance-based milestones were at the time of the modification directly linked to the execution of the Company’s
new business model at such time, most notably, the acquisition or leasing of land suitable for geothermal development. The identification of
prospective locations has emphasized areas with sufficient geothermal activity, evidenced by the presence of other operational or
in-development facilities in the same geographic regions. However, as of the date of the modification, the Company remains in an
exploratory and negotiation stage and has not identified, nor entered into any definitive land lease or purchase agreements. Also,
if the Company finds suitable land for the project, there can be no assurance that financing
to lease or acquire the land will be available in sufficient amounts and on acceptable terms. 

The
Company evaluated the modification of the performance-based awards under ASC 718, Compensation – Stock Compensation and determined
that the change represented a Type IV “improbable-to-improbable” modification. That is, both the original and new milestones
were not considered probable of achievement at the time of modification. Because the Company is in the early stages of exploring and
negotiating suitable land, and considering potential challenges such as regulatory delays, market competition, or failure to reach agreement
with landowners, there remains substantial uncertainty regarding the achievement and timing of the new milestone; therefore:

  ●
  Original milestone:
Not probable of achievement, as the related business objective
was