UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2024

Commission file number 000-50331

CalEthos, Inc.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (714) 352-5315

Securities registered under Section 12(b) of the Act:

Securities registered under Section 12(g) of the Act:

Common Stock, $0.001 par value

(Title of class)

Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by checkmark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by checkmark whether the registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the voting and non-voting common stock, other than shares held by persons who may be deemed affiliates of the registrant, as of June 30, 2024, the last day of the registrant’s most recently completed second fiscal quarter, was $25,483,343, computed by reference to the closing sales price for the registrant’s common stock on June 28, 2024, as reported on The OTCQB Market.

As of March 28, 2025, there were 25,730,540 outstanding shares of the registrant’s common stock, par value $0.001 per share.

CalEthos, Inc.

Annual Report on Form 10-K

For the Fiscal-Year Ended December 31, 2024

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

The statements contained in this report with respect to our financial condition, results of operations and business that are not historical facts are “forward-looking statements”. Forward-looking statements can be identified by the use of forward-looking terminology, such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “seek”, “estimate”, “project”, “could”, “may” or the negative thereof or other variations thereon, or by discussions of strategy that involve risks and uncertainties. Management wishes to caution the reader of the forward-looking statements that any such statements that are contained in this report reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties and other factors, including, but not limited to, economic, competitive, regulatory, technological, key employees, and general business factors affecting our operations, markets, growth, services, products and other factors, some of which are described in this report and some of which are discussed in our other filings with the Securities and Exchange Commission. These forward-looking statements are only estimates or predictions. No assurances can be given regarding the achievement of future results, as actual results may differ materially as a result of risks facing our company, and actual events may differ from the assumptions underlying the statements that have been made regarding anticipated events.

Important factors to consider in evaluating any forward-looking statements include:

These risk factors should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. All written and oral forward looking statements made in connection with this report that are attributable to our company or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Given these uncertainties, we caution investors not to unduly rely on our forward-looking statements. We do not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events, except as required by applicable law or regulation.

Notwithstanding the above, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), expressly state that the safe harbor for forward-looking statements does not apply to companies that issue penny stock. If, as now, we are considered to be an issuer of penny stock, the safe harbor for forward-looking statements may not apply to us at certain times.

Throughout this report, unless otherwise designated, the terms “we,” “us,” “our,” “the Company” and “our company” refer to CalEthos, Inc., a Nevada corporation. All amounts are in U.S. Dollars, unless otherwise indicated.

We are a data center infrastructure developer that is developing a large-scale, geothermal powered data center campus in Southern California. Our development site is located in Imperial County on the edge of California’s Lithium Valley, which is one of the world’s largest known geothermal and lithium resources. Imperial County has an abundance of geothermal energy that radiates from a shallow lava flow between the North America and Pacific tectonic plates. The potential geothermal energy that can be harvested for baseload data center power with flash, binary, and advanced closed-loop geothermal technologies is projected to be in the tens of gigawatts.

Over the past three years, we have been working with Imperial County government officials, Imperial County Planning & Development, the Imperial County Board of Supervisors, Imperial Irrigation District (“IID” - the local electric utility), Imperial Valley Economic Development Corp and various established local geothermal power producers, as well as closed-loop geothermal technology companies to develop a portfolio of geothermal energy resources to power a large-scale, master-planned data center campus.

In July 2024, we canceled an option to purchase an 80-acre site and optioned a new 315-acre site for our data center campus development, and we are in the process of contracting an additional 320 adjacent acres that will be used for onsite geothermal power production in the future. Combined, these properties will create our master planned, 635-acre, vertically-integrated, geothermal-powered data center campus. The overall infrastructure is planned to include a switchyard/substation to connect off-site power through the local grid and onsite geothermal power production to our data center buildings, connections for natural gas for back-up generators, and diverse fiber paths for internet connectivity, water/sewer, and other utilities and services required to build and operate data center facilities on the campus. Overall, the site is being planned to support:

We plan to offer hyperscale and data center development companies the following options:

We plan to lease powered building lots or powered shell buildings, or to provide build-to-suit completed buildings, to large enterprise information technology (IT) companies that are creating or addressing the growing demand for AI, Cloud and High-Performance Computing (HPC) digital services. We are currently in discussions with a number of these companies and, based upon the interest we have received thus far from potential tenants, we expect that we will have agreements signed to lease all or a substantial part of the development by the end of 2025 or early 2026.

In addition to our Southern California site, we are identifying and evaluating sites in other states that have adequate land, geothermal resources and internet connectivity that can support a one gigawatt or larger data center campus. We believe there are numerous areas in the country where advanced closed loop geothermal technology can economically harvest energy for onsite use in data centers and other energy intense industries.

Data centers are highly specialized and secure buildings that house networking, storage and communications technology infrastructure, including servers, storage devices, switches, routers and fiber optic transmission equipment. They are designed to provide the space, power, cooling and network connectivity necessary to efficiently operate mission-critical IT equipment. Telecommunications carriers and internet providers typically provide network access into a data center through optical fiber connections. The demand for data center infrastructure is being driven by many factors, but most importantly by significant growth in data and increased demand for data processing and storage infrastructure. The market for data center facilities includes established “traditional” enterprises that are web-enabling their applications and business processes, as well as cloud-centric companies with sophisticated technology requirements.

There are many types of data centers and service models available in the marketplace. Generally, their classification depends on whether they are owned by one or many organizations, how they fit into the topology of other data centers, what technologies they use for computing and storage, and even their energy efficiency. However, there are four main types of data centers:

We are developing our business model to compete in the data center infrastructure development segment of the data center industry, which is focused on providing ready-to-build-on data center campuses to companies that provide the processing, networking and storage of data. With the move to treat data as an asset, the data services market is expected to experience significant growth over the next decade. Industry automation and digital businesses are expanding, and these businesses are expected to require huge amounts of data for their businesses. North America is the most advanced region globally and we believe ready-to-build-on data center platforms are in high demand.

In developing our master-planned, geothermal-powered data center campus, we have had numerous discussions with several large companies that could lease all or part of our data center campus, with the intention of cultivating long-term strategic relationships with these companies once they become our tenants and providing them with solutions for their data center facilities and IT infrastructure requirements. We initially intend to provide geothermal-powered building lots with flexibility for customers to scale for future growth. As currently contemplated, our ready-to-build-on platform will provide clean-energy power, flexibility, reliability and security delivered through a tailored, customer-service-focused offering that will be designed to foster long-term relationships. Our plan is to focus on technology and large cloud computing customers that are expanding their services rapidly in the public and private cloud environments to provide them with clean-energy-powered solutions that address their current and future needs. We expect that our clean energy, geothermal-powered building platform design will allow us to offer power resiliency, and the opportunity for expansion as the needs of our customers grow.

Plan of Operations

As of the date of filing of this Report, we are in the process of completing our vertically-integrated, geothermal-powered data center campus land-use plan and zone change with Imperial County Planning and Development. We expect that land use and conditional zone change approvals will be completed by the end of 2025 or during the first quarter of 2026. In parallel, we are completing our plans, timelines and budgets for all required county and state environmental studies and reports, which we expect to have completed and filed for data center campus construction, onsite switchyard and electrical distribution system, and fiber, gas, water and sewer lines that connect to the property by the end of 2025. In addition, we are planning to have the required approvals to start the initial construction of the data center campus and all external utility lines by the end of the second quarter 2026. We are also planning that we can complete and submit all design, planning and environmental reports and studies for the state environmental agencies for our planned onsite geothermal production systems by mid-2026.

We are also in the process of completing a master services agreement with a geothermal technology and development company that will provide advanced closed-loop geothermal production technology, sub-surface planning and drilling, above-ground turbine and generator electricity production components and the electrical distribution system design and components. We expect to complete this agreement before the end of June 2025 and have the designs completed for subsurface and surface components before the end of 2025.

Closed-loop geothermal systems (also known as “advanced geothermal systems” or “AGS”) are a type of engineered geothermal energy system containing subsurface working fluid that is heated in a hot rock reservoir without direct contact with rock pores and fractures. Instead, the subsurface working fluid stays inside a closed loop of deeply buried pipes that conduct Earth’s heat. Closed-loop geothermal systems are one of the prominent categories of next-generation geothermal systems in development today.

The advantages of closed-loop geothermal technologies include:

These advantages mean closed-loop geothermal systems can be placed anywhere in the world as a source of carbon-free, baseload energy, with no impact to natural water resources and significantly reduced risk of induced seismicity.

In July 2024, we contracted to purchase 315-acres of land and are planning to option an additional 320-acres in the next couple of months. We believe the site we have chosen to develop is a unique location that will provide us with a rare opportunity to vertically integrate clean, onsite, baseload geothermal energy with a 24/7 data center operation. We believe 100% clean-energy-powered data centers are an important element in the ability of the U.S. to meet its carbon neutral climate goals and for hyperscale and enterprise IT companies to meet their shareholder and customer climate commitments to have a compliant, clean digital footprint. As a result, we believe the availability of nearby clean geothermal energy for our Imperial County site will provide us with a significant competitive advantage in the marketplace.

Since mid-2022, we have contracted with leading data center and energy advisory firms to complete site, power and connectivity assessments, feasibility studies, engineering plans, master-planned development and design, and project benchmarking. These have included engaging:

Based on the project assessment, feasibility and initial shovel-ready site plans that have been developed by HDR Engineering, and the benchmarking of the project by Linesight against 25 other large data center developments in the U.S. over the last 24 months, we plan to develop our 635-acre site in Imperial County, California to support up to three million square feet of data center facilities that utilize 2 gigawatts or more of baseload geothermal power. Our site will be zoned medium-industrial that is approved for geothermal power production and data center use.

As we move through the development process, we will continue to refine and finalize the courses of action needed to implement our business plan and operations. As a result, our management has not fully determined our actual short-term or long-term capital requirements for our initial project, which management expects to be substantial.

The Data Center Industry

Demand for data centers is intense for both more facilities and greater power availability. Based on several reports from CBRE, JLL and other research firms, the data center industry is forecasting that data center capacity will triple within the next five years. In the fourth quarter of 2024, every data center under construction was pre-leased from two to five years in advance of occupancy. It is widely acknowledged that the key constraint for the growth of data centers is the availability of power. To illustrate the power demand, today’s data center developments start in increments of 100MW, while mega-campuses of 1GW or more are currently in construction.

According to a recent report by Bloom Energy, the “2025 Data Center Power Report”, demand for power in the U.S. is growing at an unprecedented rate after 20 years of flat demand. U.S. power needs are projected to rise by 83 terawatt-hours (TWh) in 2025 – the equivalent to powering an additional 7.7 million homes. According to such report, data centers are the largest driver of this growth. The U.S. is expected to see the highest share of new data centers outside of China. Since 2020, the U.S. colocation data center market alone has doubled, driven by digitization, cloud and AI. To power this increase, it was reported that by 2030, data centers could require 8%-12% of the total U.S. power demand compared to 3%-4% today.

The U.S. grid has not been able to keep pace with this demand. While utilities can likely generate sufficient power to meet data center needs, they face bottlenecks with transporting that power via transmission and distribution infrastructure. As a result, grid interconnection takes longer, there is more congestion on the network, and capacity is increasingly expensive. If the U.S. continues to build high-voltage transmission infrastructure at its current rate, it is estimated that it will take at least 80 years to deliver the power that is needed over the next decade.

Bloom Energy believes new data center projects will struggle to get timely access to power. In the U.S., 55 GW of data center IT capacity is expected to come online in the next five years. The industry is already seeing data center IT capacity buildout ramp up with ~20 GW of capacity announced so far for 2025, and it is expected to continue growing. Bloom Energy expects that at least another 35 GW of data center capacity will be announced within the next five years to meet projected data center demand.

In addition, the environmental impact of power generation and use is expected to become more stringent. Sustainability regulations are expected to become more difficult to meet, and it is expected that the use of renewable energy credits (RECs) to offset carbon footprints of conventional data center power sources will no longer qualify. Today, less than 5% of the energy directly powering data centers is clean.

According to the 2024 United States Data Center Energy Usage Report “Energy Analysis and Environmental Impacts Division, Lawrence Berkeley National Laboratory,” energy consumption by U.S. data centers has been on the rise and reached 280 terawatt hours (TWh) in 2024 accounting for an estimated 5% to 6% of the nation’s total electricity usage. Projections for data center energy consumption by 2028 range from 325 TWh to 580 TWh. This annual usage would correspond to a power demand for data centers of between 74 GW and 132 GW, which equates to 6.7% to 12.0% of the anticipated total U.S. electricity consumption for 2028.

According to a report by P & S Intelligence, a market research firm, the data center industry is large and on pace to grow rapidly, from $282 billion in 2024 to over $602 billion in 2030. The industry is not only large, but also very profitable. According to the Dgtl Infra report “Data Center REITs, Stocks and ETFs: Investing in 2024”, in February 2024, the principal data center developer/operator companies averaged EBITDA margins of 50% or more on lease revenues. Those that are publicly traded were valued at an average of 25 times EBITDA.

According to a February 2025 report by PwC (Pricewaterhouse Coopers LLP) on the “Economic Contributions of Data Centers in the United States,” data centers have become vital to the modern economy, underpinning digitalization, facilitating data driven decision-making, and supporting a broad spectrum of industries and services. Their role in storing, processing and managing data is essential for organizational success in the digital age.

According to the PwC report, the total annual contribution of the data center industry to national employment - encompassing direct, indirect and induced effects from data center construction and operations - has increased from 2 .9 million jobs in 2017 to 4 .7 million jobs in 2023, marking a 60 percent rise over this period. The industry’s growth has notably surpassed that of the overall U. S. economy in recent years. From 2017 to 2023, direct employment in the U. S. data center industry expanded by over 50 percent, compared to 10 percent growth in employment for the United States overall during the same timeframe.

According to PwC, the industry’s total annual contribution to national labor income surged from $209 billion in 2017 to $404 billion in 2023, reflecting a 93 percent increase. The increase in labor income has outpaced the increase in employment, suggesting that the U. S. data center industry supports higher earning jobs at the national level. Additionally, its annual contribution to U. S. value added, or gross domestic product (GDP), rose from $355 billion in 2017 to $727 billion in 2023, marking a 105% increase. Over this same period, the U. S. GDP grew by only 41 percent.

Geothermal Energy

According to a December 2024 IEA (International Energy Agency) report “The Future of Geothermal Energy,” technology breakthroughs are unlocking huge potential for geothermal energy. New geothermal harvesting technologies are enabling access to previously untapped resources, while cost reductions and innovative financing models are paving the way for increasing the role of geothermal energy in energy systems around the world. Additionally, techniques developed by the oil and gas industry – including a strong understanding of the subsurface, drilling and completing wells, predicting fluid flows and managing large-scale projects – can rapidly drive down costs and help tap geothermal resources deeper in the ground.

Advances in technology are opening new horizons for geothermal energy, which is expected to make it an attractive option for countries and companies all around the world. These techniques include horizontal drilling and hydraulic fracturing honed through oil and gas developments in North America. If geothermal can follow in the footsteps of innovation success stories such as solar photovoltaic (PV), wind, EVs and batteries, it can become a cornerstone of tomorrow’s electricity and heat systems as a dispatchable and clean source of energy. For the moment, geothermal meets less than 1% of global energy demand and its use is concentrated in a few countries with easily accessible and high-quality resources, including the United States, Iceland, Indonesia, Turkey, Kenya and Italy.

According to the IEA report, with continued technology improvements and reductions in project costs, geothermal could meet up to 15% of global electricity demand growth by 2050. This would mean the cost-effective deployment of as much as 800 GW of geothermal power capacity worldwide, producing almost 6,000 terawatt-hours per year, which is equivalent to the current electricity demand today of the United States and India combined.

Geothermal is a versatile, clean and secure energy source that can provide around-the-clock electricity generation, heat production and storage. As the energy source is continuous, geothermal power plants can operate at their maximum capacity throughout the day and year. On average, global geothermal capacity had a utilization rate over 75% in 2023, compared with less than 30% for wind power and less than 15% for solar PV. In addition, geothermal power plants can operate flexibly in ways that contribute to the stability of electricity grids, ensuring demand can be met at all times and supporting the integration of variable renewables such as solar PV and wind.

According to the IEA report, investment in geothermal is growing. Governments, oil and gas companies and utilities are among those looking for investment opportunities in geothermal. If deep cost reductions for next-generation geothermal can be delivered, total investment in geothermal could reach $1 trillion cumulatively by 2035 and $2.5 trillion by 2050. At its peak, geothermal investment could reach $140 billion per year, which is higher than current investment in onshore wind power globally. As a dispatchable source of clean power, geothermal is also attracting interest from stakeholders beyond the energy industry, including technology companies looking to meet the fast-growing demand for electricity in data centers.

Competition

The competition in the data center industry is primarily driven by the increasing presence of small- and large-scale service providers globally, and we will compete with numerous data center developers, and public and private owners and operators of technology-related real estate and data centers.

The key participants in the data center market with which we will compete are infrastructure developers, such as Tract, ScaleUp, Stream, Quantum Loophole and Cloverleaf Infrastructure, and data center companies such as Digital Realty, Equinix, CyrusOne, QTS, Vantage and Compass, among many others. In addition, we may face competition from other new entrants into the data center market. Many of our current and potential competitors may have significant advantages over us, including greater name recognition, longer operating histories, pre-existing relationships with current or potential customers, significantly greater financial, marketing and other resources, ownership of more data centers and data centers that are more broadly distributed geographically, access to less expensive power, and more robust interconnected hubs in certain geographic markets. All of these potential advantages could allow competitors to respond more quickly to new or changing opportunities. In addition, once we are operational, if our competitors offer space, power and/or interconnection services at rates below current market rates, or below the rates we are then charging our customers, we may lose potential customers or be pressured to reduce our rental rates below those we are then charging or have modelled in order to retain customers when our customers’ leases expire.

As a new entrant into the data center marketplace, we will compete against the larger, more established and better capitalized companies that today control the majority of market share. We believe our principal advantages will be our location, which provides us with access to an abundance of reasonably-priced onsite baseload geothermal energy to power a 24/7 data center operation, low-latency internet connectivity to major market hubs, and our proximity to the Southern California market and the multitudes of companies utilizing high-performance computing that want close-by data center space.

As a developer of data center infrastructure, we also compete for the services of key third-party service providers, including engineers and contractors with expertise in the development of onsite power production and data centers. The competition for the services of specialized contractors and other third-party providers required for the development of onsite power production data centers is intense, increasing the cost of engaging such providers and the risk of delays in completing our development projects.

Finally, we face competition from real estate developers in our sector and in other industries for the acquisition of additional properties suitable for power production and data center developments. Such competition may reduce the number of properties available for acquisition or development, increase the price of these properties and reduce the demand for data center space in the markets we seek to serve.

Intellectual Property

Currently, our intellectual property consists of the feasibility, assessment, industry benchmarking and shovel-ready site development plans that have been completed for us by industry leading consulting firms over the last two plus years. Our intellectual property portfolio will grow as we complete the development of our onsite geothermal power production systems that will be vertically integrated with our ready-to-build-on, clean-energy powered data center campus. We intend to rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractual protections, to protect our proprietary technology, methods and offerings. However, as of the date of this Report, we do not have any patents or registered trademarks.

We cannot provide any assurance that our proprietary rights with respect to our onsite geothermal power production systems vertically-integrated with our ready-to-build-on, clean-energy powered data center campus, and the services we will offer will be viable or have value in the future since the validity, enforceability and type of protection of proprietary rights in these industries are uncertain and continuingly evolving.

Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our design, systems and services or to obtain and use information that we regard as proprietary. Policing unauthorized use of our designs and services is difficult, and while we are unable to determine the extent to which piracy of our designs, systems and services will exist, intellectual piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to as great an extent as do the laws of the United States, and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions. Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.

Further, in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights in the data center design, systems and service offerings and Internet-related data management industries. We can become subject to intellectual property infringement claims as the number of our competitors grows and our services overlap with competitive offerings. These claims, even if not meritorious, could be expensive to defend and could divert management’s attention from operating our business. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantial award of damages and to develop non-infringing design, systems and service offerings, obtain a license or cease providing the services that contain the infringing intellectual property. We may be unable to develop non-infringing data center design, systems and service offerings or obtain a license on commercially reasonable terms, if at all.

Employees

We currently have three full-time employees, two of whom are our executive officers. None of our employees is represented by a collective bargaining agreement, and we have never experienced any work stoppage. We believe we have good relations with our employees.

Corporate History and Recent Developments

We were incorporated pursuant to the laws of the State of Nevada on March 20, 2002 under the name Integrated Brand Solutions Inc., and on February 6, 2006, we changed our name to Upstream Biosciences Inc. From 2006 to December 2009, our company operated as a biotechnology company, and from 2010 until May 2013, our company had no operating business. On July 11, 2013, we changed our corporate name to RealSource Residential, Inc. Our initial business strategy in 2013 was to engage in various real estate related businesses. However, in 2016 we disposed of all of our real estate and other assets and continued operations as a public “shell” company. On December 20, 2018, we changed our corporate name from RealSource Residential, Inc. to CalEthos, Inc.

In early 2021, we determined there was a sizable opportunity to develop and manufacture high-performance computer systems for the cryptocurrency mining industry. In August 2021, in connection with a $3.5 million capital raise, our board of directors determined that we were no longer a shell company, as defined in Rule 12b-2 of the Exchange Act. During the development of our computer chip and system in Korea, we had also developed a plan to build a large-scale, clean-energy powered, containerized, immersion-cooled data center operation in Southern California to support the use of the systems we were developing for our company and for others. However, following the decline of the bitcoin market in early 2022, we decided to abandon our chip and system development efforts and we determined that we could develop a profitable business by offering wholesale data center colocation services to a larger customer base of hyperscale and enterprise IT companies.

We are a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

None.

Risk Management and Strategy

To date, cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected and we believe are not reasonably likely to affect our company, including our business strategy, results of operations or financial condition.

Governance

We do not own any real property. Our executive office is located at 11753 Willard Avenue, Tustin, California 92782, in the office of Michael Campbell, our Chief Executive Officer. We are not charged rent for the use of this space. We believe our existing facilities are sufficient for our current operations.

We know of no material active or pending legal proceeding against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation.

Not Applicable.

PART II

Our common stock is listed for quotation on the OTCQB Market under the trading symbol “GEDC.” Trading in our common stock in the over-the-counter market has been limited and the quotations set forth below are not necessarily indicative of actual market values. The following table sets forth, for the periods indicated, the high and low closing bid prices for each quarter within the last two fiscal years ended December 31, 2024 as reported by the quotation service operated by the OTC Markets Group. All quotations for the OTCQB Market reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

On March 28, 2025, the closing bid price for our common stock on the OTCQB Market as reported by the quotation service operated by the OTC Markets Group was $0.91.

Transfer Agent

Nevada Agency and Transfer Company is the registrar and transfer agent for our common shares. Their address is 50 West Liberty, Suite 880 Reno, Nevada, 89501 Telephone: 775-322-0626, Facsimile: 775-322-5623.

Holders of Our Common Stock

As of March 28, 2025, there were 60 registered holders of record of our common stock. As of such date, 25,730,540 shares of common stock were issued and outstanding. The number of our shareholders of record excludes any estimate by us of the number of beneficial owners of shares held in street name, the accuracy of which cannot be guaranteed.

Dividend Policy

We have not declared or paid any cash dividends since inception. Although there are no restrictions that limit our ability to pay dividends on our common shares, we do not intend to pay dividends for the foreseeable future.

Item 6. Selected Financial Data.

We are a “smaller reporting company” as defined by Regulation S-K and as such, are not required to provide the information contained in this item pursuant to Regulation S-K.

The following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this Report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this Report.

Our audited financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

We are in the early stages of implementing our plan for the development of a large-scale geothermal-powered data center campus on which we will lease powered building lots and buildings to large enterprise information technology (IT) customers that are creating or addressing the growing demand for AI, Cloud and High-Performance Computing (HPC) digital services. In planning for our initial geothermal-powered data center building lots and building, we are in discussions with several large companies that could lease all or part of the data center campus, with the intention of cultivating long-term strategic relationships with them once they become our customers and providing them with solutions for their data center facilities and IT infrastructure requirements. We initially intend to provide geothermal-powered building lots with flexibility for customers to scale for future growth. As currently contemplated, our offerings will provide clean energy power, flexibility, reliability and security delivered through a tailored, customer-service-focused platform that will be designed to foster long-term relationships.

As of the filing of this Report, we have completed Phase I and entered into Phase II of our data center development plans. In the initial phase of our project, we originally signed an option agreement in March 2023 to acquire 80 acres of commercially-zoned land in Imperial County, California. We believed this site would provide us an opportunity to acquire commercially-zoned land on which we could combine nearby direct clean geothermal/solar energy with a 24/7 data center operation. However, in July 2024, we identified and entered into an option agreement to acquire a larger, 315-acre parcel of land that we believe provides us with significant advantages over our prior data center development site, which include:

In late July 2024, we terminated our option agreement to acquire the 80-acre parcel in Imperial County, California as we believe the recently-optioned property is better suited for our immediate needs.

We believe 100% clean-energy-powered data centers are an important element in the ability of the U.S. to meet its carbon neutral climate goals and for hyperscale and enterprise IT companies to meet their shareholder and customer commitments to have an ESG-compliant, clean digital footprint before 2030. As a result, we believe the availability of nearby clean energy and our ability to produce geothermal power on our site will provide us a significant competitive advantage in the marketplace.

In Phase I of our development plan, which we completed in December 2023, we contracted with leading data center advisory firms to complete site, power and connectivity assessments, feasibility studies, engineering plans and project benchmarking. Phase I of our plan included engaging:

During the beginning of 2024, we started Phase II of our data center development plan. Phase II included hiring additional staff and consultants to complete environmental, health and safety and cyber security procedures and to develop a set of data center operating procedures to meet hyperscale customer pre-qualification requirements. During this phase, we also developed requests for proposals (RFPs) and contract packages for contracting an engineering/design firm and general contractor. In addition, we ramped up our operating staff to support the infrastructure and building design processes and the development of building plans and the permit packages. We also undertook and completed utility studies, transmission planning, site layouts and substation designs.

We are currently in the process of completing our vertically-integrated, geothermal-powered data center campus land-use plan and zone change with Imperial County Planning and Development. We expect that land use and conditional zone change approvals will be completed by the end of 2025 or during the first quarter of 2026. In parallel, we are completing our plans, timelines and budgets for all required county and state environmental studies and reports, which we expect to have completed and filed for data center campus construction, onsite switchyard and electrical distribution system, and fiber, gas, water and sewer lines that connect to the property by the end of 2025. In addition, we are planning to have the required approvals to start the initial construction of the data center campus and all external utility lines by the end of the second quarter 2026. We are also planning that we can complete and submit all design, planning and environmental reports and studies for the state environmental agencies for our planned onsite geothermal production systems by mid-2026.

We are also in the process of completing a master services agreement with a geothermal technology and development company that will provide advanced closed-loop geothermal production technology, sub-surface planning and drilling, above-ground turbine and generator electricity production components and the electrical distribution system design and components. We expect to complete this agreement before the end of June 2025 and have the designs completed for subsurface and surface components before the end of 2025.

Based upon the current interest we have received from potential tenants, we expect that we will have agreements signed to lease all or a substantial part of the development by the end of 2025 or early 2026.

It is anticipated that we will incur significant expenses in the implementation of our business plan as described herein, and that we will require substantial financing to complete the development and construction of the planned vertically-integrated, geothermal-powered data center campus. A failure to obtain this necessary capital when required on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our development plans, any commercialization efforts and any other operations. We may not be able to secure financing on favorable terms, or at all, to meet our future capital needs. In addition, even if we are able to obtain sufficient funding to commence our business operations, we may need to pursue additional financing in the future to make expenditures and/or investments to support the growth of our business. In addition, we may require additional capital to pursue our business objectives and respond to new competitive pressures, pay extraordinary expenses or fund our growth, including through acquisitions. Additional funding, however, may not be available when required on terms that are acceptable to us, or at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when it is required, our ability to commence and grow our proposed business operations, to support our business and to respond to business challenges could be significantly limited.

We currently have only limited capital with which to pay these anticipated expenses. To fund our business plan going forward, we intend to raise funds from investors by issuing common stock, preferred stock and/or debt securities.

Results of Operations for the years ended December 31, 2024 and 2023

The following table summarizes our results of operations for the years ended December 31, 2024 and 2023.

Revenues

For the years ended December 31, 2024 and 2023, we had no revenues.

Operating Expenses

Professional fees

Our professional fees increased to $386,000 for the year ended December 31, 2024 from $344,000 for the year ended December 31, 2023. The increase of approximately $42,000 was attributable to a decrease in our consulting fees of approximately $63,000, which was offset by an increase in our other professional fess of approximately $105,000.

Equity-based compensation

Our equity-based compensation for the year ended December 31, 2024 was approximately $369,000 as compared to $3,032,000 for the year ended December 31, 2023. During the fourth quarter of 2023, we issued warrants and stock options to our directors and officers with a fair value of $2,916,000, which was recognized as an expense upon issuance. Also for the years ended December 31, 2024 and 2023, the Company capitalized equity based compensation of approximately $2,380,000 and $336,000 as data center cost.

Development cost – abandonment

On July 24, 2024, we terminated our option agreement to acquire 80 acres of commercially-zoned land in Imperial County, California. At such date, we had approximately $344,000 development cost related to that property, which we determined were not usable for our data center campus project.

Payroll and related expenses

Payroll and related expenses increased to $259,000 for the year ended December 31, 2024, compared to $51,000 for the year ended December 31, 2023. For the year ended December 31, 2023, we had one employee. Our first employee, our Chief Operating Officer, was hired in June 2023, and our second employee, our Vice President of Data Center Development, was hired in February 2024. For the year ended December 31, 2024, our total payroll-related cost for our employees was approximately $1,148,000, of which approximately $889,000 was capitalized as data center development cost.

Financing costs

Our financing cost for the year ended December 31, 2024 increased to $2,410,000 compared to $252,000 for the year ended December 31, 2023. The 2024 financing cost included $2,355,000 for the amortization of debt discount related to our notes payable.

Loss on extinguishment of debt – related party

During the year ended December 31, 2024, the Company and the note holder agreed to convert the note payable of $1,000,000 into 500,000 shares of the Company’s common stock with a fair value of $875,000 and exchanged two warrants, previously issued to the note holder, each for 300,000 shares of the Company’s common stock (“Old Warrant”), for a warrant to purchase 2,258,877 shares of the Company’s common stock (“New Warrant’). The loss on extinguishment of $2,317,000 is difference between (i) $1,755,000 for the note payable of $1,000,000 and fair value of Old Warrant of $755,000 and (ii) $4,072,000 the fair value of the common stock of $875,000 and fair value of the New Warrant of $3,197,000.

Loss on extinguishment of debt

During the years ended December 31, 2024 and 2023, the Company extinguished convertible debentures with the issuance of shares of the Company’s common stock. The fair value of the common stock issued exceeds the carrying amount of the principal and accrued interest by approximately $6,468,000 and $986,000, which was recorded as a loss on extinguishment for the year ended December 31, 2024 and 2023, respectively.

Liquidity and Capital Resources

Our working capital as of December 31, 2024 and 2023 was as follows.

Our working capital deficit decreased from a $704,000 deficit as of December 31, 2023 to a deficit of $218,000 as of December 31, 2024 for a decrease of $486,000. The decrease in our working capital deficit was due to a $22,000 decrease in our cash and cash equivalents, which was offset by a decrease of $167,000 in our accounts payable and accrued expenses and a decrease of $341,000 in convertible promissory notes, net.

Cash Flows

Cash Flows from Operations

Cash used in operating activities increased to approximately $859,000 for the year ended December 31, 2024 from approximately $35,000 for the year ended December 31, 2023, which was predominantly related to the increase in our expenditures for filing fees, legal fees, transfer agent fees and consulting fees paid during the period.

Cash Flows from Investing

Our cash used in investing activities increased to approximately $1,467,000 for the year ended December 31, 2024 from approximately $1,730,000 for the year ended December 31, 2023. The primary use of cash was for expenditures for the development of our data center campus.

Cash Flows from Financing

Our cash provided by financing activities increased to approximately $2,305,000 for the year ended December 31, 2024 from approximately nil for the year ended December 31, 2023. The increase of $2,305,000 was due to the issuance of a promissory note in the principal amount of $1,000,000 and the issuance of convertible debentures in the principal amount of $1,410,000 less $106,000 of cash paid for expenses related to the issuance.

Liquidity and Material Cash Requirements

Even though we experienced negative cash flows from operations of approximately $859,000 for the year ended December 31, 2024, as a result of our private placement of a promissory note and convertible debentures in the principal amounts of $1,000,000 and $1,410,000, respectively, we had cash and cash equivalents of approximately $286,000 at December 31, 2024. As of December 31, 2024, we had approximately $1,410,000 of convertible debentures with maturity dates on December 31, 2026.

It is anticipated that we will incur expenses in the implementation of our business plan described above, and such expenses will require substantial financing to complete the development of the property for a data center operation and to achieve our goals. We currently have only limited capital with which to pay these anticipated expenses. To fund our business plan going forward, we intend to raise funds from investors by issuing common stock, preferred stock and/or debt securities. We are currently in discussions with several potential funding sources. However, there can be no assurance we will be able to successfully raise additional funds when required, if at all.

The failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our development plans, any commercialization efforts or other operations. We may not be able to secure financing on favorable terms, or at all, to meet our future capital needs. In addition, even if we are able to obtain sufficient funding to commence our business operations, we may need to pursue additional financing in the future to make expenditures and/or investments to support the growth of our business and may require additional capital to pursue our business objectives and respond to new competitive pressures, pay extraordinary expenses or fund our growth, including through acquisitions. Additional funds, however, may not be available when we need them on terms that are acceptable to us, or at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to commence our proposed business operations, to continue to grow and support our business and to respond to business challenges could be significantly limited.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide this information.

Our financial statements and notes thereto and the reports of RBSM LLP, our independent registered public accounting firm, are set forth on pages F-1 through F-22 of this Report.

Not Applicable

Disclosure Controls and Procedures

As required by paragraph (b) of Rules 13a-15 or 15d-15 under the Exchange Act, our principal executive officer and principal financial officer evaluated our company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. Based on this evaluation, these officers concluded that as of the end of the period covered by this Annual Report on Form 10-K, these disclosure controls and procedures were not effective.

The conclusion that our disclosure controls and procedures were not effective was due to the presence of material weaknesses in internal control over financial reporting as identified below under the heading “Management’s Report on Internal Control Over Financial Reporting.” Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdown can occur because of simple error or mistake.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) for our company. Our internal control over financial reporting is designed to provide reasonable assurance, not absolute assurance, regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America. Internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles in the United States of America, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate.

Our management, including our principal executive officer and principal financial officer, conducted an evaluation of the design and operation of our internal control over financial reporting as of December 31, 2024 based on the criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, our management concluded our internal control over financial reporting was not effective as at December 31, 2024 due to the following material weaknesses which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines; (iii) inadequate security and restricted access to computer systems including insufficient disaster recovery plans; and

(iv) no written whistle-blower policy.

We plan to take steps to enhance and improve the design of our internal controls over financial reporting when our company has sufficient staff to allocate responsibilities. During the period covered by this Report, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes once our financial resources will support the required staffing level: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; (ii) adopt sufficient written policies and procedures for accounting and financial reporting and a whistle-blower policy; and (iii) implement sufficient security and restricted access measures regarding our computer systems and implement a disaster recovery plan. The remediation efforts set out in (i) and (iii) are largely dependent upon our company securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely effected in a material manner.

This Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Our internal control over financial reporting was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Report.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

Changes In Internal Control Over Financial Reporting.

There were no changes in our internal control over financial reporting during the year ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

None.

PART III

Directors and Executive Officers

Our directors and executive officers, their ages and their positions held with our company are as follows:

There are no arrangements between our directors and any other person pursuant to which our directors were nominated or elected for their positions. There are no family relationships among our directors or officers.

The following biographical information regarding our directors and executive officers.

Michael Campbell. Mr. Campbell became our Chief Executive Officer on September 12, 2018. For the past 20 years, Mr. Campbell has been the managing director of M1 Advisors LLC, a business advisory and consulting firm that has engineered, orchestrated and provided support and services to numerous private-to-public transitions, debt and equity financings and hyper- organic-growth and consolidation strategies in a wide range of industries. In addition, from December 2011 to February 2017, Mr. Campbell was the Chief Executive Officer and a director of NXChain, Inc., a publicly-traded start-up shell company in the cryptocurrency business that was a successor to AgriVest Americas Inc., a publicly-traded start-up shell company that sought to acquire cattle ranches in Brazil for conversion to soybean farms. Mr. Campbell spent the first 20 years of his career in the high-tech industry creating and operating various companies that included a computer retailing operation, data-storage peripheral company with three computer disk-drive manufacturing companies through joint ventures with the Russian, Chinese and Spanish governments, a specialized call-center company for telco broadband provisioning and an online broadband services ordering and order aggregation company with the Regional Bell Operating Companies.

Joel D. Stone. Mr. Stone became our President and Chief Operating Officer on March 28, 2023. Mr. Stone has 24 years of broad-based operations, engineering, construction, integration, transformation, and technical leadership in the data center infrastructure, sourcing, and telecommunications industries. Prior to joining our company, Mr. Stone led the Global Site Sourcing teams for Meta Platforms that supported the data center infrastructure teams from 2019 to 2022. Prior to 2019, Mr. Stone served as Senior Vice President and Chief Operating Officer of RagingWire Data Centers, an NTT communications company, where he was responsible for critical facilities engineering, design, construction, and data center operations from 2016-2018. Prior to RagingWire, Mr. Stone served as Vice President of Global Data Center Operations for CenturyLink Communications, responsible for 58 data centers around the world and a global team of 600+ people from 2011to 2016. Prior to CenturyLink, Mr. Stone was Group Operations Director at Global Switch in London, one of the largest wholesale data center providers in Europe and Asia. Mr. Stone spent nine years at Microsoft where he was responsible for all North America data center operations. Earlier in his career, Mr. Stone built-out two state-of-the-art data centers in Silicon Valley (Santa Clara) for Cable & Wireless Communications.

Dean S. Skupen. Mr. Skupen became our Chief Financial Officer on September 12, 2018. Mr. Skupen is a business advisor who has provided various financial accounting services to, or acted as the Interim Chief Financial Officer for, a number of public companies since 2010. Prior to that, he was a Partner at Stonefield Josephson, Inc. (now Marcum, LLP), an accounting firm with five offices throughout California where he provided auditing and consulting services to public companies and to privately-held entrepreneurial companies transitioning to public ownership in diverse industries. Mr. Skupen graduated from the University of Southern California with a Bachelor of Science degree in Accounting. In addition, he is licensed as a Certified Public Accountant in the State of California.

Steven M. Shum. Mr. Shum became a director of our company on October 7, 2021. Mr. Shum has been Chief Executive Officer of INVO Bioscience (NASDAQ: INVO) since October 2019 and a member of the board of directors of INVO Bioscience since October 2017. Prior to INVO Bioscience, Mr. Shum served as Chief Financial Officer of Eastside Distilling (NASDAQ: EAST) from October 2015 to November 2019. Prior to joining Eastside, from October 2008 until April 2015, Mr. Shum was an employee and a member of the board of directors of XZERES Corp. (OTCQB:XPWR), a global renewable energy company, where he served in various officer roles, including Chief Operating Officer from September 2014 until April 2015, Chief Financial Officer, Principal Accounting Officer and Secretary from April 2010 until September 2014 (under former name, Cascade Wind Corp) and Chief Executive Officer and President from October 2008 to August 2010. Mr. Shum also serves as the managing principal of Core Fund Management, LP and the Fund Manager of Core Fund, LP. He was a founder of Revere Data LLC (now part of Factset Research Systems, Inc.) and served as its Executive Vice President for four years, heading up the product development efforts and contributing to operations, business development, and sales. He spent six years as an investment research analyst and portfolio manager of D.N.B. Capital Management, Inc. His previous employers include Red Chip Review and Laughlin Group of Companies. He earned a B.S. in Finance and a B.S. in General Management from Portland State University in 1992.

Sean Fontenot. Mr. Fontenot became a director of our company on October 7, 2021. Mr. Fontenot has spent more than 20 years as a self-employed IT and network specialist and in 2017 became an executive producer of independent films. Mr. Fontenot is a technology enthusiast and film producer that manages a 5013c foundation dedicated to (i) educating the public on the history of video, arcade, and computer gaming - including the technical aspects and the impact of games on society; (ii) fostering public interest in software development and gaming hardware to enable technological growth and inspire the next generation of developers, and (iii) developing public space for action sports’ recreation - including mentoring youths and building programs designed to help bridge the gender gap in various action sports categories as well as underserved community members.

Involvement in Certain Legal Proceedings

None of our directors and executive officers have been involved in any of the following events during the past ten years:

Director Independence

Our board of directors has reviewed the composition of our board of directors and the independence of each director. Based upon information requested from and provided by each director concerning his background, employment and affiliations, including family relationships, our board of directors has determined that each of Steven Shum and Sean Fontenot is an “independent director” as defined under Rule 5605(a)(2) of the Nasdaq Marketplace Rules. In making such determinations, our board of directors considered the relationships that each such non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining independence, including the beneficial ownership of our capital stock by each non-employee director.

Board Committees

We do not have a standing Audit Committee. We do not believe that the lack of an Audit Committee has had or will have any adverse effect on our financial statements, based upon current operations; however, our board of directors will consider establishing an Audit Committee of independent directors as the number of directors increases. Until such time, our board of directors will perform the duties of an Audit Committee including delegating an auditor firm and interacting with them.

We do not have a standing Compensation Committee. Presently, the salary and benefits of our executive officers are determined by our entire board of directors. As we continue to develop our data center and commence selling colocation services, we expect to increase the size of our board to include independent directors who will approve the compensation arrangements with our executive officers.

We also do not have a Nominating Committee as we have not adopted any procedures by which security holders may recommend nominees to our board of directors.

Code of Ethics

Effective March 28, 2022, our Board of Directors adopted an amended Code of Business Conduct and Ethics that applies to, among other persons, members of our board of directors, our company’s officers, contractors, consultants and advisors. We will provide a copy of the Code of Business Conduct and Ethics to any person without charge, upon request. Requests can be sent to our company at the address on the cover of this Annual Report.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our executive officers, directors and persons who beneficially own more than 10% of our common stock to file with the SEC reports of their ownership and changes in their ownership of our common stock. To our knowledge, based solely on review of the copies of such reports and amendments to such reports with respect to the year ended December 31, 2024 filed with the SEC, all required Section 16 reports under the Exchange Act for our directors, executive officers and beneficial owners of greater than 10% of our common stock were filed on a timely basis during the year ended December 31, 2024, except for a late Form 4 filing for Michael Campbell. As of the date of the filing of this annual report, such Form 4 filing has been made.

The following table sets forth all compensation awarded to, earned by or paid to the executive officers of our company during the years ended December 31, 2024 and 2023. No compensation was paid to any other executive officer of our company during such periods.

SUMMARY COMPENSATION TABLE

Employment Agreement

On June 19, 2023, we entered into an Employment Agreement dated as of June 19, 2023 (the “Employment Agreement”) with Joel D. Stone, our President and Chief Operating Officer. Pursuant to the terms of the Employment Agreement, Mr. Stone received or will receive (i) an annual base salary of $250,000, which amount may be increased upon our reaching certain benchmarks described in the Employment Agreement, as determined in our sole discretion; (ii) an initial option grant of seven-year options to purchase 2,500,000 shares of our common stock for a purchase price of $0.50 per share, of which the right to purchase up to 1,250,000 shares will vest in equal installments over a period of three years and the right to purchase up to 1,250,000 shares will vest upon our completing certain milestones that are set out in the Employment Agreement; and (iii) the right to participate in all benefit plans offered to our senior executive officers.

The Employment Agreement also provides for certain severance benefits upon a termination by us without “cause” or by Mr. Stone for “good reason.” In the event of a termination by us without “cause” or by Mr. Stone for “good reason” after the first full year of employment, Mr. Stone will be entitled to (i) continued payment of his base salary for the lesser of six (6) months or the remaining term of the Employment Agreement, subject to Mr. Stone signing a timely and effective separation agreement containing a release of all claims against us and other customary terms; provided, however, that if such termination is between the 91^st day and the end of the first year of employment, Mr. Stone will be entitled to a pro rata portion of such payment.

The Employment Agreement contains customary confidentiality restrictions and work-product provisions with respect to Mr. Stone, as well as customary non-competition covenants and non-solicitation covenants with respect to our employees, consultants and customers.

Consulting Agreements

On October 20, 2018, we entered into a consulting agreement with DSS Consulting Corporation, a corporation controlled by Dean Skupen, our Chief Financial Officer (“DSS Consulting”), pursuant to which DSS Consulting agreed to continue to provide consulting services to our company and to cause Mr. Skupen to serve as our Chief Financial Officer. The agreement with DSS Consulting will continue until terminated by either party. Pursuant to such agreement, DSS Consulting was issued 250,000 shares of common stock in March 2019 and DSS Consulting will be paid a monthly consulting fee in the amount of $5,000. The consulting agreement contains customary confidentiality restrictions and work-product provisions, as well as customary non-competition covenants and non-solicitation covenants with respect to our employees, consultants and customers.

Equity Compensation Plan Information

The following table provides information as of December 31, 2024, regarding our compensation plans under which equity securities are authorized for issuance:

2021 Equity Incentive Plan

On October 4, 2021, we adopted our 2021 Equity Incentive Plan (the “Equity Plan”) to provide an additional means to attract, motivate, retain and reward selected employees and other eligible persons. Our stockholders also approved the Equity Plan on October 4, 2021. On November 28 2023, our board of directors approved an increase in the number shares of common stock reserved for issuance under the Equity Plan to 10,000,000 shares, subject to stockholder approval, which has not yet been obtained. Employees, officers, directors and consultants who provide services to us or one of our subsidiaries were eligible to receive awards under the Equity Plan. Awards under the Equity Plan are issuable in the form of incentive or nonqualified stock options, stock appreciation rights, stock bonuses, restricted stock, stock units and other forms of awards including cash awards.

As of December 31, 2024, options to purchase an aggregate of 8,204,000 shares of common stock had been granted under the Equity Plan, and 1,796,000 shares authorized under the Equity Plan remained available for award purposes.

Purpose. The purpose of the Equity Plan is to further and promote the interests of our company and its stockholders by enabling us to attract, retain and motivate employees, directors and consultants, or those who will become employees, directors or consultants, and to align the interests of those individuals with the interests of our stockholders.

Administration. The Equity Plan will be administered by an independent compensation committee appointed by the Board (the “Compensation Committee”), which will have general administrative authority for the Equity Plan. In the event that the Board has not appointed the Compensation Committee, then the Board shall have all the powers of the Compensation Committee under the Equity Plan. The Compensation Committee may delegate certain limited authority to one or more of our senior executive officers to grant awards to employees who are not subject to Section 16 of the Exchange Act. Additionally, the Compensation Committee may designate persons other than members of the Compensation Committee to carry out the day-to-day ministerial administration of the Equity Plan (other than with regard to the selection for participation in the Equity Plan and/or the granting of any awards to participants) under such conditions and limitations as prescribed by the Compensation Committee (the appropriate acting body, be it the Compensation Committee, the Board, or an executive officer within his or her delegated authority, is referred to herein as the “Administrator”). The Administrator’s determinations under the Equity Plan need not be uniform and may be made selectively among the Equity Plan’s participants, whether or not such participants are similarly situated.

The Administrator has broad authority under the Equity Plan with respect to award grants including, without limitation, the authority to:

Eligibility. Persons eligible to receive awards under the Equity Plan include employees, directors and consultants, or those who will become employees, directors or consultants, of our company and/or its subsidiaries. Notwithstanding the above, incentive stock options may only be granted under the Equity Plan to our employees.

Authorized Shares. The maximum number of shares of common stock that may be initially issued or transferred pursuant to awards under the Equity Plan shall not exceed 10,000,000 shares, all of which may be issued as any type of award permitted under the Equity Plan, including, but not limited to, incentive stock options.

Types of Awards. The Equity Plan authorizes awards of stock options and restricted shares of common stock.

A stock option is the right to purchase shares of common stock at a future date at a specified price per share. The per share exercise price of an option generally may not be less than the fair market value of a share of common stock on the date of grant. The maximum term of an option is ten years from the date of grant. An option may either be an incentive stock option or a nonqualified stock option. Incentive stock option benefits are taxed differently from nonqualified stock options, as described under “Federal Income Tax Consequences of Awards Under the Plan” below. Incentive stock options are also subject to more restrictive terms and are limited in amount by the U.S. Internal Revenue Code (the “Code”) and the Equity Plan. Incentive stock options may only be granted to employees of our company or a subsidiary.

Restricted shares are shares of common stock granted to Equity Plan participants, subject to such restrictions, terms and conditions, if any, as the Administrator deems appropriate, including, without limitation, (a) restrictions on the sale, assignment, transfer, hypothecation or other disposition of such shares, (b) the requirement that the participant deposit such shares with our company while such shares are subject to such restrictions, and (c) the requirement that such shares be forfeited upon termination of employment or service with our company for any reason or for specified reasons within a specified period of time or for other reasons (including, without limitation, the failure to achieve designated performance goals). Upon satisfaction or lapse of the applicable restrictions, terms, and conditions, subject to applicable securities laws, the participant will receive shares of common stock in exchange for such restricted shares.

Dividend Equivalents; Deferrals. The Administrator may provide for the deferred payment of awards and may determine the other terms applicable to deferrals. The Administrator may provide that awards under the Equity Plan earn dividends or dividend equivalents based on the amount of dividends paid on outstanding shares of common stock.

Assumption and Termination of Awards. Generally, and subject to limited exceptions set forth in the Equity Plan, if we dissolve or undergo certain corporate transactions such as a merger, business combination, or other reorganization, or a sale of substantially all of its assets, all awards then-outstanding under the Equity Plan will become fully vested or paid, as applicable, and will terminate or be terminated in such circumstances, unless the Administrator provides for the assumption, substitution or other continuation of the award. The Administrator also has the discretion to establish other change in control provisions with respect to awards granted under the Equity Plan. For example, the Administrator could provide for the acceleration of vesting or payment of an award in connection with a corporate event that is not described above and provide that any such acceleration shall be automatic upon the occurrence of any such event.

Clawback. We may cancel any award under the Equity Plan, require reimbursement from a participant, and effect any other right of recoupment of equity or other compensation provided under the Equity Plan in accordance with any clawback policies adopted by us.

Transfer Restrictions. Subject to certain exceptions contained in the Equity Plan, awards under the Equity Plan generally are not transferable by the recipient other than by will or the laws of descent and distribution and are generally exercisable, during the recipient’s lifetime, only by the recipient. Any amounts payable or shares issuable pursuant to an award generally will be paid only to the recipient or the recipient’s beneficiary or representative. The Administrator has discretion, however, to establish written conditions and procedures for the transfer of awards to other persons or entities, provided that such transfers comply with applicable federal and state securities laws.

Adjustments. As is customary in incentive plans of this nature, each share limit and the number and kind of shares available under the Equity Plan and any outstanding awards, as well as the exercise or purchase prices of awards, and performance targets under certain types of performance-based awards, are subject to adjustment in the event of certain reorganizations, mergers, combinations, recapitalizations, stock splits, stock dividends, or other similar events that change the number or kind of shares outstanding, and extraordinary dividends or distributions of property to the stockholders.

No Limit on Other Authority. The Equity Plan does not limit the authority of the Board or any committee to grant awards or authorize any other compensation, with or without reference to our common stock, under any other plan or authority.

Termination of or Changes to the Equity Plan. The Board may amend or terminate the Equity Plan at any time and in any manner. Stockholder approval for an amendment will be required only to the extent then required by applicable law or any applicable listing agency or required under Sections 422 or 424 of the Code to preserve the intended tax consequences of the plan. For example, stockholder approval will be required for any amendment that proposes to increase the maximum number of shares that may be delivered with respect to awards granted under the Equity Plan (adjustments as a result of stock splits or similar events will not, however, be considered an amendment requiring stockholder approval). Unless terminated earlier by the Board, the authority to grant new awards under the Equity Plan will terminate on October 4, 2031. Outstanding awards, as well as the Administrator’s authority with respect thereto, generally will continue following the expiration or termination of the Equity Plan. Generally speaking, outstanding awards may be amended by the Administrator (except for a repricing), but the consent of the award holder is required if the amendment (or any Equity Plan amendment) materially and adversely affects the holder.

Federal Income Tax Consequences of Awards under the Plan.

The U.S. federal income tax consequences of the Equity Plan under current federal law, which is subject to change, are summarized in the following discussion of the general tax principles applicable to the Equity Plan. This summary is not intended to be exhaustive and, among other considerations, does not describe the deferred compensation provisions of Section 409A of the Code to the extent an award is subject to and does not satisfy those rules, nor does it describe certain elections under the Code (such as an election under Code Section 83(b)), alternative minimum tax, or state, local, or international tax consequences.

With respect to nonqualified stock options, we are generally entitled to deduct, and the participant recognizes taxable income in an amount equal to the difference between the option exercise price and the fair market value of the shares at the time of exercise. With respect to incentive stock options, we are generally not entitled to a deduction nor does the participant recognize income at the time of exercise, although the participant may be subject to the U.S. federal alternative minimum tax. Upon a disposition of shares acquired by exercise of an incentive stock option before the end of the applicable incentive stock option holding periods, the participant generally must recognize ordinary income equal to the lesser of (i) the fair market value of the shares at the date of exercise minus the exercise price or (ii) the amount realized upon the disposition of the incentive stock option shares minus the exercise price. Otherwise, a participant’s disposition of shares acquired upon the exercise of an option (including an incentive stock option for which the incentive stock option holding periods are met) generally will result in only capital gain or loss.

With respect to restricted shares, we are generally entitled to deduct and the participant recognizes taxable income in an amount equal to the excess of the fair market value over the price paid (if any) only at the time the restrictions lapse (unless the recipient elects to accelerate recognition as of the date of grant).

If an award is accelerated under the Equity Plan in connection with a “change in control” (as this term is used under the Code), we may not be permitted to deduct the portion of the compensation attributable to the acceleration (“parachute payments”) if it exceeds certain threshold limits under the Code (and certain related excise taxes may be triggered).

We have the authority and the right to deduct or withhold, or require a participant to remit to us, an amount sufficient to satisfy any income, payroll, and other taxes (including, without limitation, pursuant to the Federal Insurance Contributions Act and the Federal Unemployment Tax Act) to the extent required by law to be withheld with respect to any taxable event concerning a participant arising as a result of an award under the Equity Plan.

Incentive Plan Awards

No equity awards or grants were made to our named executive officers during the fiscal year ended December 31, 2024.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth outstanding equity awards to our named executive officers as of December 31, 2024.

Aggregated Option Exercises

There were no options exercised by any officer or director of our company during the year ended December 31, 2024.

Director Compensation

General. The following discussion describes the significant elements of the expected compensation program for members of our board of directors and its committees. The compensation of our directors is designed to attract and retain committed and qualified directors and to align their compensation with the long-term interests of our shareholders. Directors who are also executive officers (each, an “Excluded Director”) will not be entitled to receive any compensation for his or her service as a director, committee member or Chair of our board of directors or of any committee of our board of directors.

Director Compensation Arrangements. Our non-employee director compensation program is designed to attract and retain qualified individuals to serve on our board of directors. Our board of directors, on the recommendation of our compensation committee, will be responsible for reviewing and approving any changes to the directors’ compensation arrangements. In consideration for serving on our board of directors, each director (other than Excluded Directors) will be paid an annual retainer. All directors will be reimbursed for their reasonable out-of-pocket expenses incurred while serving as directors.

Cash Compensation. We did not pay any cash compensation to our directors during the year ended December 31, 2024. However, we intend to implement a cash compensation program for our board members in the future.

Equity Awards. We did not grant any compensatory equity awards to our directors during the year ended December 31, 2024. However, we intend to implement a program for the grant of equity awards to our board members in the future.

Pension and Retirement Plans

Currently, we do not offer any annuity, pension or retirement benefits to be paid to any of our officers, directors or employees, in the event of retirement.

The following table sets forth, as of March 15, 2025, the names, addresses and number of shares of common stock beneficially owned by (i) all persons known to our management to be beneficial owners of more than 5% of the outstanding shares of our common stock, (ii) each director of our company, (iii) each named Executive Officer and (iv) all executive officers and directors of our company as a group (except as indicated, each beneficial owner listed exercises sole voting power and sole dispositive power over the shares beneficially owned):

A “related party transaction” is any actual or proposed transaction, arrangement or relationship or series of similar transactions, arrangements or relationships, including those involving indebtedness not in the ordinary course of business, to which we or our subsidiaries were or are a party, or in which we or our subsidiaries were or are a participant, in which the amount involved exceeded or exceeds the lesser of (i) $120,000 or (ii) one percent of the average of our total assets at year-end for the last two completed fiscal years and in which any related party had or will have a direct or indirect material interest. A “related party” includes:

Other than compensation arrangements for our named executive officers and directors, which we describe herein, the only related party transactions to which we were a party during the years ended December 31, 2024 and 2023, since December 31, 2024, or any currently proposed related party transaction, are as follows.

Between December 11, 2023 and February 20, 2024, we entered into a series of exchange subscription agreements (each, an “Exchange Agreement”) with 14 holders (each, a “Holder”) of our outstanding promissory notes and, in certain cases, related outstanding stock purchase warrants, pursuant to which we and the Holders agreed to exchange their promissory notes, and, if applicable, related stock purchase warrants, for shares of our common stock. Pursuant to the Exchange Agreements, an aggregate of $5,417,459.50 of principal and accrued interest under the outstanding promissory notes and, if applicable, related stock purchase warrants was exchanged for an aggregate of 10,834,919 shares of common stock (the “Exchange Shares”). Nanosha Investments LLC, a limited liability company controlled by Sean Fontenot, a director of our company (“Nanosha”), entered into an Exchange Agreement with us pursuant to which it exchanged (i) a promissory note with outstanding principal and accrued interest in the aggregate amount of $4,287,193, and (ii) a warrant for the purchase of 1,540,000 shares of common stock, for 8,574,386 of the Exchange Shares.

On February 12, 2024, Nanosha made a loan to us in the amount of $1,000,000 in consideration for which we issued to Nanosha a promissory note in the principal amount of $1,000,000 that bore interest at the rate of 10% per annum and originally matured on May 30, 2024 and a five-year warrant to purchase up to 200,000 shares of common stock with an initial exercise price of $0.50 per share. On May 30, 2024, we issued to Nanosha a five-year warrant to acquire 300,000 shares of common stock with an exercise price of $3.50 per share in consideration for the agreement of Nanosha to extend the maturity date of our promissory note from May 30, 2024 to August 31, 2024 and on August 31, 2024, we issued to Nanosha a five-year warrant to acquire 300,000 shares of common stock with an exercise price of $3.80 per share in consideration for the agreement of Nanosha to extend the maturity date of our promissory note from August 31, 2024 to December 31, 2024.

On December 15, 2024, we entered into an exchange subscription agreement with Nanosha pursuant to which Nanosha exchanged (i) the promissory note we issued to Nanosha on February 12, 2024 in the principal amount of $1,000,000, and (ii) the warrants we issued to Nanosha on May 30, 2024 and August 31, 2024 for the purchase of an aggregate of 600,000 shares of common stock, for (a) 500,000 shares of common stock and (b) a five-year warrant to purchase an aggregate of 2,258,877 shares of common stock for a purchase price of $2.00 per share. In connection with such exchange, we paid accrued interest on the exchanged promissory note in the amount of $105,918 in cash.

Audit Fees

The aggregate fees billed for professional services rendered by RBSM LLP, our principal accountants for the years ended December 31, 2024 and 2023, for the audit of financial statements, quarterly reviews of our interim financial statements and services normally provided by the independent accountant in connection with statutory and regulatory filings or engagements for these periods were as follows:

In the above table, “audit fees” are fees billed by our company’s external auditor for services provided in auditing our company’s financial statements for the periods indicated above. “Audit-related fees” are fees not included in audit fees that are billed by the auditor for assurance and related services, including quarterly reviews, that are reasonably related to the performance of the audit of our company’s financial statements. “Tax fees” are fees billed by the auditor for professional services rendered for tax compliance, tax advice and tax planning. “All other fees” are fees billed by the auditor for products and services not included in the foregoing categories.

Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by our board of directors either before or after the respective services were rendered.

PART IV

SIGNATURES

Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 1st day of April 2025.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a) The following documents are filed as part of this Report:

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

CalEthos, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of CalEthos Inc., (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes and schedules (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the consolidated results of its operations and its cash flows for each of the two years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America.

The Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the accompanying consolidated financial statements, although the Company has net income it is primarily attributable to non-cash reversal of compensation for restricted stock units, has generated negative cash flows from operating activities, has an accumulated deficit and has stated that substantial doubt exists about Company’s ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. RBSM determined there were no CAM’s for the audit of the year ended December 31, 2024.

/s/ RBSM LLP

We have served as the Company’s auditor since 2018.

New York, NY

April 1, 2025

PCAOB ID No. 587

CalEthos, Inc.

Consolidated Balance Sheets

As of December 31,

The accompanying notes are an integral part of these consolidated financial statements.

CalEthos, Inc.

Consolidated Statements of Operations and Comprehensive Loss

For the Years Ended December 31.