Company: TGNT
Filing Date: 2025-04-07
Form Type: 10-K
Source: 0001477932-25-002496
Chunk: 335

Company: Totaligent, Inc.
Filing Date: 2025-04-07
Form: 10-K
Item: Item 3
Chunk 335
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 of Contents

The following table summarizes the effects on the Company’s gain (loss) associated with changes in the fair values of the derivative financial instruments by type of financing for the years ended December 31, 2024 and 2023:   For the Years Ended   December 31, 2024  December 31, 2023 Embedded derivatives $(8,873) $38,759 Loss on issuance of derivative  —   — Total gain (loss) $(8,873) $38,759  Current accounting principles that are provided in ASC 815 require derivative financial instruments to be classified in liabilities and carried at fair value with changes recorded in income. The Company has selected the Monte Carlo Simulation Model, which approximates the Monte Carlo Simulations, valuation technique to fair value the embedded derivative because it believes that this technique is reflective of all significant assumption types, and ranges of assumption inputs, that market participants would likely consider in transactions involving embedded derivatives. Such assumptions include, among other inputs, interest risk assumptions, credit risk assumptions and redemption behaviors in addition to traditional inputs for option models such as market trading volatility and risk-free rates. The Binomial Lattice Model technique is a level three valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators. For instruments in which the time to expiration has expired, the Company has utilized the intrinsic value as the fair value. The intrinsic value is the difference between the quoted market price on the valuation date and the applicable conversion price. Significant inputs and results arising from the Monte Carlo Simulation process are as follows for the embedded derivatives that have been bifurcated from the convertible notes and classified in liabilities:   Inception Date  December 31, 2023  December 31, 2024 Quoted market price on valuation date $0.034  $0.012  $0.015 Effective contractual conversion rates $0.026  $0.009  $0.012 Contractual term to maturity 0.5 Years  0.25 Years  0.25 Years Market volatility:            Volatility 200.36%-332.78%  200.36%-332.78% 200.36%-332.78% Risk-adjusted interest rate  10%  10%  10% The following table reflects the issuances of embedded derivatives