Company: NOEMW
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001213900-25-110040
Chunk: 15

Company: CO2 Energy Transition Corp.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 15
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000. Any loss incurred or a lack of access to such funds could
have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows. 

Offering Costs

The Company complies with
the requirements of the ASC 340-10-S99 and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering”. Offering costs
consist principally of professional and registration fees that are related to the Initial Public Offering. Financial Accounting Standards
Board (“FASB”) ASC 470-20, “Debt with Conversion and Other Options”, addresses the allocation of proceeds
from the issuance of convertible debt into its equity and debt components. The Company applies this guidance to allocate Initial Public
Offering proceeds from the Units between common stock, warrants, and rights, using the residual method by allocating Initial Public
Offering proceeds first to the assigned value of the warrants and rights and then to the common stock. Offering costs allocated to Public
Shares were charged to temporary equity, and offering costs allocated to Public Rights, Public Warrants and Private Units were charged
to stockholders’ deficit, as Public and Private Rights and Warrants, after management’s evaluation, were accounted for under
equity treatment.

Fair Value of Financial Instruments

The fair value of the Company’s
assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,”
approximates the carrying amounts represented in the condensed balance sheets, primarily due to its short-term nature.

Income Taxes

The Company follows the
asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities
are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts
of existing assets and liabilities and their respective tax bases. Deferred tax assets 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 included the enactment
date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

11

CO2 ENERGY TRANSITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2025

(Unaudited) 

The Company accounts for
income taxes under ASC 740, “Income Taxes