Company: VMCWF
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001827
Chunk: 177

Company: Valuence Merger Corp. I
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1
Chunk 177
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 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 for as a single, compound derivative instrument.

Bifurcated
embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value
reported as non-operating income or expense. When the equity or convertible debt instruments contain embedded derivative instruments that
are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated
derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those
instruments being recorded at a discount from their face value. The discount from the face value of the convertible debt, together with
the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense.

The
Company has determined that the conversion feature included in convertible promissory notes - sponsor and convertible note - related
party had no value and these notes were recorded at par value.

    F-15

Recent
Accounting Standards

In
August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and
Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and
Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible
instruments by removing major separation models required under current U.S. GAAP. ASU 2020-06 removes certain settlement conditions
that are required for equity contracts to qualify for the derivative scope exception, and it also simplifies the diluted earnings
per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including
interim periods within those fiscal years, with early adoption permitted. The Company is currently assessing the impact, if any,
that ASU 2020-06 would have on its financial position, results of operations or cash flows. The Company has not adopted this
guidance as of December 31, 2024.

In
November 2023, the FASB issued ASU