Company: NOEMW
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001213900-25-110040
Chunk: 16

Company: CO2 Energy Transition Corp.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 16
---
” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets
and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and
for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation
allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. As of September
30, 2025 and December 31, 2024, the Company had a full valuation allowance against the deferred tax assets.

ASC 740 also clarifies the
accounting for uncertainty in income taxes recognized in a company’s unaudited condensed financial statements and prescribes a recognition
threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken
in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by
taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period,
disclosure and transition.

The Company’s effective
tax rate was 25.46% and 25.94%, 0.00% and 0.00% for the three and nine months ended September 30, 2025, and 2024, respectively.
The effective tax rate differs from the statutory tax rate of 21% due to the valuation allowance on the deferred tax assets.

The Company recognizes accrued
interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts
accrued for interest and penalties as of September 30, 2025 and December 31, 2024. The Company is currently not aware of any issues under
review that could result in significant payments, accruals or material deviation from its position.

The Company has identified
the United States as its only “major” tax jurisdiction. The Company may be subject to potential examination by federal and
state taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions,
the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does
not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

Net Income (Loss) per Common Stock Share

The Company complies with
accounting and disclosure requirements of FAS