Company: TGNT
Filing Date: 2025-04-09
Form Type: 10-K/A
Source: 0001477932-25-002538
Chunk: 58

Company: Totaligent, Inc.
Filing Date: 2025-04-09
Form: 10-K/A
Chunk 58
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     |                   |      — |
| 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:                     |     |                |                |   |     |