Company: TPET
Filing Date: 2025-01-17
Form Type: 10-K
Source: 0001493152-25-002760
Chunk: 1184

Company: Trio Petroleum Corp.
Filing Date: 2025-01-17
Form: 10-K
Item: Item 5
Chunk 1184
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 shares
equal to 5% of the number of common shares initially issuable upon conversion of each note tranche; warrants to purchase 4,167 and 2,750
common shares with exercise prices of $26.40 and $11.00 for the first and second tranches, respectively, were issued to Spartan as of
January 31, 2024. Such warrants may be exercised beginning 6 months after issuance until four- and one-half years thereafter.

41

Critical
Accounting Policies and Estimates

Basis
of Presentation

We
prepare our financial statements in conformity with GAAP, which requires management to make certain estimates and assumptions and apply
judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to
be important at the time the condensed financial statements are prepared, and actual results could differ from our estimates and such
differences could be material. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially
different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical
accounting policies and how they are applied in the preparation of our condensed financial statements, as well as the sufficiency of
the disclosures pertaining to our accounting policies in the footnotes accompanying our financial statements. Described below are the
most significant policies we apply in preparing our condensed financial statements, some of which are subject to alternative treatments
under GAAP. We also describe the most significant estimates and assumptions we make in applying these policies. See “Note 2 - Summary
of Significant Accounting Policies” to our financial statements.

Oil
and Gas Assets and Exploration Costs – Successful Efforts

Our
projects are in exploration and/or early production stages and we began generating revenue from its operations during the quarterly period
ended April 30, 2024. We apply the successful efforts method of accounting for crude oil and natural gas properties. Under this method,
exploration costs such as exploratory, geological, and geophysical costs, delay rentals and exploratory overhead are expensed as incurred.
If an exploratory property provides evidence to justify potential development of reserves, drilling costs associated with the property
are initially capitalized, or suspended, pending a determination as to whether a commercially sufficient quantity of proved reserves
can be attributed to the area as a result of drilling. At the end of each quarter, management reviews the status of all suspended exploratory
property costs considering ongoing exploration activities; in particular, whether