Company: TGNT
Filing Date: 2025-04-07
Form Type: 10-K
Source: 0001477932-25-002496
Chunk: 379

Company: Totaligent, Inc.
Filing Date: 2025-04-07
Form: 10-K
Item: Item 4
Chunk 379
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 F-14Table of Contents

Accounting considerations for notes with variable conversion prices  The Company evaluated the notes under ASC 815 Derivatives and Hedging (“ASC 815”). ASC 815 generally requires the analysis of embedded terms and features that have characteristics of derivatives to be evaluated for bifurcation and separate accounting in instances where their economic risks and characteristics are not clearly and closely related to the risks of the host contract. The material embedded derivative features consisted of the embedded conversion option. The conversion option bears risk of equity which were not clearly and closely related to the host debt agreement and required bifurcation. Current accounting principles that are also provided in ASC 815 do not permit an issuer to account separately for individual derivative terms and features that require bifurcation and liability classification.  Rather, such terms and features must be and were bundled together and fair valued as a single, compound embedded derivative. Accounting considerations for notes with fixed conversion prices  The Company evaluated the notes under ASC 815. ASC 815 generally requires the analysis of embedded terms and features that have characteristics of derivatives to be evaluated for bifurcation and separate accounting in instances where their economic risks and characteristics are not clearly and closely related to the risks of the host contract. There were no embedded instruments which required bifurcation.

6. Derivative liabilities     Embedded derivatives The Company’s convertible promissory notes gave rise to derivative financial instruments. The notes embodied certain terms and conditions that were not clearly and closely related to the host debt agreement in terms of economic risks and characteristics. These terms and features consist of the embedded conversion option. The following tables summarize the components of the Company’s derivative liabilities and linked common shares as of December 31, 2024 and 2023 and the amounts that were reflected in income related to derivatives for the period ended:   December 31, 2024 The financings giving rise to derivative financial instruments Indexed Shares  Fair Values Embedded derivatives  35,592,281  $158,055 Total  35,592,281  $158,055    December 31, 2023 The financings giving rise to derivative financial instruments Indexed Shares  Fair Values Embedded derivatives  45,221,645  $149,182 Total  45,221,645  $149,182 

 F-15Table of Contents

The following table summarizes the effects on the Company’s