CalEthos, Inc., a data center infrastructure developer, reported no revenue for the fiscal year ending December 31, 2024, consistent with the previous year. The company’s operating expenses decreased significantly to $1.4 million from $3.5 million in 2023, primarily due to a substantial reduction in equity-based compensation, which fell from $3 million to $369,000. The company also recorded a notable increase in payroll expenses, reflecting the hiring of additional staff, which contributed to a total payroll-related cost of approximately $1.1 million, of which $889,000 was capitalized as data center development costs.
In a strategic shift, CalEthos canceled an option to purchase an 80-acre site in July 2024 and instead optioned a larger 315-acre site for its geothermal-powered data center campus in Imperial County, California. This new site is expected to support the development of a vertically-integrated campus that will include onsite geothermal power production. The company is also in the process of contracting an additional 320 adjacent acres for future geothermal energy production, bringing the total planned area to 635 acres. The new site is strategically located to provide better access to power and connectivity, which the company believes will enhance its competitive advantage.
Operationally, CalEthos is in discussions with several large enterprise IT companies regarding leasing agreements for its data center facilities, with expectations to finalize agreements by the end of 2025 or early 2026. The company currently has three full-time employees, reflecting a significant increase in headcount from the previous year, as it ramps up its development efforts. The company is also working on completing its land-use plan and obtaining necessary regulatory approvals, which are expected to be finalized by early 2026.
The company’s financial position showed improvement, with a reduction in its working capital deficit from $704,000 in 2023 to $218,000 in 2024. This was attributed to a decrease in current liabilities, despite a slight decline in cash and cash equivalents. CalEthos reported cash flows from financing activities of approximately $2.3 million, primarily from the issuance of promissory notes and convertible debentures, which will be crucial for funding its ongoing development plans.
Looking ahead, CalEthos anticipates incurring significant expenses as it implements its business plan and develops its geothermal-powered data center campus. The company acknowledges the need for substantial financing to support its operations and growth, and it is actively seeking additional funding sources. However, management cautions that the ability to secure necessary capital on favorable terms remains uncertain, which could impact the timeline and scope of its development initiatives.
About CalEthos, Inc.
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