Company: VMCWF
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001827
Chunk: 733

Company: Valuence Merger Corp. I
Filing Date: 2025-03-31
Form: 10-K
Item: Item 5
Chunk 733
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718,651  
     5,502,490  
     12,833,415  
     5,502,490 
  
    Basic and diluted net income per ordinary share 
    $0.26  
    $0.26  
    $0.26  
    $0.26 

Concentration
of Credit Risk

Financial
instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution,
which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000. Any loss incurred or a lack
of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and
cash flows.

Fair
Value of Financial Instruments

The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value
Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their
short-term nature.

Convertible
Promissory Notes

The
Company has elected the bifurcation option to account for the proceeds received during 2023 and 2024 from the convertible promissory
notes to the Sponsor and related party. These promissory notes are presented in the balance sheets as Convertible promissory notes - sponsor and convertible
promissory note - related party.

The
Company analyzed convertible promissory notes to assess if the fair value option was appropriate in 2023 and 2024, due to the substantial
premium which results in an offsetting entry to additional paid in capital and under the related party guidance which precludes the fair
value option it was determined the fair value option was not appropriate. As such, the Company accounted for the working capital loans
and convertible notes – related party, analyzing the conversion options embedded in convertible notes in accordance with ASC 815.
ASC 815 generally requires companies to bifurcate conversion options embedded in convertible notes from their host instruments and to
account for them as freestanding derivative financial instruments.

The
Company reviews the terms of convertible notes issued to determine whether there are embedded derivative instruments, including embedded
conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances
where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to
be bifurcated, the bifurcated derivative instruments are accounted