Company: TGNT
Filing Date: 2025-04-07
Form Type: 10-K
Source: 0001477932-25-002496
Chunk: 403

Company: Totaligent, Inc.
Filing Date: 2025-04-07
Form: 10-K
Item: Item 5
Chunk 403
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 sharply (approximately 83%), reflecting the lower revenue base and fixed or semi-fixed costs associated with maintaining infrastructure and personnel.

This drop in gross margin percentage (from ~34% in 2023 to ~10% in 2024) also reflects the upfront investment nature of product development, where expenses continue but revenue generation lags until launch and adoption.

The cost of goods sold for the years ended December 31, 2024 and 2023 were $401,461 and $481,335, respectively. 

The Company’s cost of goods sold primarily consists of outsourced service fees tied to the execution of managed marketing campaigns on behalf of clients, including contractor costs, digital ad spend, and third-party software tools.

In 2024, as the Company scaled back these client-facing services to prioritize its internal platform development:

 ·There was a natural decrease in outsourced execution activities, leading to a 17% reduction in COGS. ·The decrease in COGS was proportionate to the drop in campaign volume, indicating that these costs are variable in nature and scale with service delivery.

Operating expenses increased from $604,302 in 2023 to $927,749 in 2024, largely due to higher professional fees associated with compliance reporting requirements, which were necessitated by the Company's expanded operations from managed campaigns. Other income (expenses) also saw a shift, increasing from ($48,212) in 2023 to ($62,555) in 2024. This change was primarily due to an increase in interest expense in relation to added debt.

As a result of decreased sales and increased operating expenses, we had a net loss of ($947,236) for the year ended December 31, 2024 compared to a net loss of ($402,170) for the year ended December 31, 2023. 

Liquidity and Capital Resources

Going Concern

We have had negative working capital and have sustained operating losses since inception.  These factors, and the need for additional financing in order for the Company to meet its business plan raises substantial doubt about the Company’s ability to continue as a going concern. 

We anticipate that operating losses will continue in the near term. We intend to meet near-term obligations with private placement offerings. We currently have limited revenue, which is not sufficient to cover operational expenses.

Failure to raise adequate capital and generate adequate revenues could result in the Company having to curtail or cease operations. The Company’s ability to raise additional capital through the future issuances of the