Company: NKLR
Filing Date: 2025-11-10
Form Type: S-1
Source: 0001213900-25-108246
Chunk: 263

Company: Terra Innovatum Global N.V.
Filing Date: 2025-11-10
Form: S-1
Chunk 263
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 The Company will, from time to time, when appropriate in management’s estimation, record adequate
reserves in the Company’s financial statements for pending litigation. Currently there are no pending or threatened litigation matters
that management believes require accrual or disclosure. Refer to Note 5 for commitments or contractual obligations.

Income Taxes

The Company is domiciled in Italy and is subject
to taxation under Italian tax laws. It is not domiciled in the United States and, as such, is not subject to U.S. federal or
state income taxes.

The Company accounts for income taxes under the
asset and liability method in accordance with ASC 740, Income Taxes. Under this method, deferred tax assets and liabilities are recognized
for the estimated future tax consequences attributable to differences between financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted rates in effect for the
year in which these temporary differences are expected to be recovered or settled. Valuation allowances are provided if based on the weight of available evidence, it is more likely
than not that some or all of the deferred tax assets will not be realized. Management believes that it is more likely than not that all
deferred tax assets will not be realized.

<div align='center'>F-44

Terra Innovatum, Srl.
Notes to the Financial Statements</div>

Note 3. Summary of Significant Accounting Policies(cont.)

The Company recognizes liabilities for potential
tax payments to various tax authorities related to uncertain tax positions. The liabilities are based on a determination of whether and
how much of a tax benefit taken by the Company in its tax filing is more likely than not to be realized following resolution of any potential
contingencies present related to the tax benefit. Potential interest and penalties associated with such uncertain tax positions, if any,
are recorded as components of income tax expense.

The Company assesses its income tax positions and
records tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances and
information available as of the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained,
the Company records the largest amount of tax benefit with a greater than 50 percent likelihood of being realized upon ultimate settlement
with a taxing authority having full knowledge of all relevant information. For those income tax positions where it is not more likely
than not that a tax benefit will be sustained, the Company does not recognize a tax benefit in the financial statements.