Company: TPET
Filing Date: 2025-06-10
Form Type: 10-Q
Source: 0001641172-25-014516
Chunk: 86

Company: Trio Petroleum Corp.
Filing Date: 2025-06-10
Form: 10-Q
Item: Part I, Item 8
Chunk 86
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2025 and October 31, 2024, Trio LLC owned less than 1% and 1%, respectively, of the outstanding shares of the Company.

Income
Taxes

Deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit
carry forwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date.

The
Company utilizes ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. The Company
accounts for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities
and the related financial amounts, using currently enacted tax rates. A valuation allowance is recorded when it is “more likely
than not” that a deferred tax asset will not be realized. At April 30, 2025 and October 31, 2024, the Company’s net deferred
tax asset has been fully reserved.

For
uncertain tax positions that meet a “more likely than not” threshold, the Company recognizes the benefit of uncertain tax
positions in the condensed consolidated financial statements. The Company’s practice is to recognize interest and penalties, if
any, related to uncertain tax positions in income tax expense in the statements of operations when a determination is made that such
expense is likely. The Company is subject to income tax examinations by major taxing authorities since inception.

The
Company’s wholly owned Canadian subsidiary is subject to taxation under Canadian federal and provincial tax laws. The subsidiary’s
income tax provision is calculated based on applicable Canadian tax rates, and any differences between U.S. and Canadian tax treatments
are considered in the condensed consolidated financial statements. The Company also considers the impact of the U.S.-Canada Tax Treaty
in determining its tax obligations, including withholding taxes on intercompany transactions.

Fair
Value Measurements

The
carrying values of financial instruments comprising cash and cash equivalents, payables, and notes payable-related party approximate
fair values due to the short-term maturities of these instruments. The notes payable- related party is considered a level