Company: NOEMW
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001013762-25-004368
Chunk: 1067

Company: CO2 Energy Transition Corp.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 7
Chunk 1067
---
 deferred tax assets is dependent upon the generation of future taxable income during
the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled
reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration
of all of the information available, management believes that significant uncertainty exists with respect to future realization of the
deferred tax assets and has therefore established a full valuation allowance. For the years ended December 31, 2024 and 2023, the
change in the valuation allowance was $45,489 and $47,825 respectively.

A reconciliation of the
federal income tax rate to the Company’s effective tax rate is as follows:

    December 31,  
    December 31, 

    2024  
    2023 
  
    Statutory federal income tax rate 
     21.0% 
     21.0%
  
    State taxes, net of federal tax benefit 
     0.0% 
     0.0%
  
    Change in fair value of warrants 
     0.0% 
     0.0%
  
    Change in valuation allowance 
     74.9% 
     (21.0)%
  
    Income tax provision 
     95.9% 
     0.0%

The Company’s effective
tax rates for the periods presented differ from the expected (statutory) rates due to changes in fair value in warrants, transaction
costs associated with warrants and the recording of full valuation allowances on deferred tax assets.

The Company files income
tax returns in the U.S. federal jurisdiction in various state and local jurisdictions and is subject to examination by the various taxing
authorities.

NOTE 10. FAIR VALUE MEASUREMENTS

ASC 820, “Fair
Value Measurement,” defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants. Fair value measurements are classified on a three-tier hierarchy as follows:

    ●
    Level 1 — defined as observable inputs such as quoted prices (unadjusted)
    for identical instruments in active markets;

    ●
    Level 2 — defined as inputs other than quoted prices in active markets
    that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices
    for identical or similar instruments in markets that are not active; and