Company: AHRO
Filing Date: 2025-04-16
Form Type: 10-K
Source: 0001477932-25-002774
Chunk: 222

Company: Authentic Holdings, Inc.
Filing Date: 2025-04-16
Form: 10-K
Item: Item 13
Chunk 222
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 convertible notes’ payable was $1,137,119 as of December 31, 2024. 

We identified the accounting considerations and related valuations, including the related fair value determinations of the embedded derivative liabilities of such as a critical audit matter. The principal considerations for our determination were: (1) the accounting consideration in determining the nature of the various features (2) the evaluation of the potential derivatives and potential bifurcation in the instruments, and (3) considerations related to the determination of the fair value of the various debt and equity instruments and (4) the conversion features that include valuation models and assumptions utilized by management. 

Our audit procedures related to management’s conclusion on the evaluation and related valuation of embedded derivatives, included the following, among others: (1) evaluating the relevant terms and conditions of the various financings, and (2) assessing the reasonableness of the judgments made by the Company with respect to the accounting for the convertible debt, and (3) the assessment and accounting for potential derivatives and assessment of management’s conclusions.

Intangible Assets

As described in Note 6, Acquisitions, to the consolidated financial statements, the Company entered into separate transactions to acquire a Company and complete license agreement with another company. Both companies in the transactions with Authentic Holdings, Inc. are owned by the same individual. The Company considered both transactions inseparable, therefore effectively one transaction and recorded intangible assets based on value of the preferred stock (if converted) issued as purchase consideration on the transaction date. The value of the intangible assets, net of amortization was $4,284,185 as of December 31, 2024.

We identified the accounting considerations, subjectivity of the related fair value of the intangible assets, and the presence of an impairment event  as a critical audit matter. The principal considerations for our determination were: (1) determining the valuation method (2) subjective and uncertain nature of the valuation models as it relies on assumptions and forecasts, (3) determining the measuring the amount of economic benefit, and (4) the determination of the presence of an impairment event. 

Our audit procedures related to management’s conclusion on the valuation of the intangible assets, included the following, among others: (1) assessing the continued relevance of the valuation model used to estimate carrying value, (2) assessing the reliability of the underlying data included in the assumptions, and (3) assessing the presence of an impairment event and judgments made by the Company.

We have served as the Company’s