Company: TGNT
Filing Date: 2025-05-19
Form Type: 10-Q/A
Source: 0001477932-25-003978
Chunk: 16

Company: Totaligent, Inc.
Filing Date: 2025-05-19
Form: 10-Q/A
Chunk 16
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 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 March 31, 2025 and December 31, 2024 and the amounts that were reflected in income related to derivatives for the period ended:

|                                                                |     | March 31, 2025 |            |     |             |         |
|:---------------------------------------------------------------|:----|:---------------|-----------:|:----|:------------|--------:|
| The financings giving rise to derivative financial instruments |     | Indexed Shares |            |     | Fair Values |         |
| Embedded derivatives                                           |     |                | 21,516,785 |     | $           | 213,391 |
| Total                                                          |     |                | 21,516,785 |     | $           | 213,391 |

|                                                                |     | 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 |

| F-14 |

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 three months ended