Company: GEDC
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001641172-25-010244
Chunk: 38

Company: CalEthos, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 8
Chunk 38
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-to-suit data center facility. 

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    Vesting milestones can be altered or changed by the Company and the optionee mutually agreeing as the data center site development, building designs, and construction plans are further defined and timelines for permitting, construction, and customer contracts, occupancies, and operations’ milestones are established.

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 three months ended March 31, 2025, the Company recorded compensation
expenses of approximately $91,000, which was capitalized as data center cost.

On November
15, 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. For the three months ended March 31, 2025, the Company recorded compensation expenses of approximately $242,000, which was
capitalized as data center cost.

On April 1, 2024, the
Company awarded its Chief Strategy and Development officer 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