Company: NOEMW
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001013762-25-004368
Chunk: 1130

Company: CO2 Energy Transition Corp.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 7A
Chunk 1130
---
 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 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.

As of December 31, 2024 and
2023, the Company had $0 and $4,600, respectively, of U.S. federal net operating loss carryovers available to offset future taxable income.
Net operating loss carryovers are indefinite lived for future offsets. In assessing the realization of the deferred tax assets, management
considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization
of 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 deferred tax assets and therefore established a full
valuation allowance of $137,671 and $90,211 as of December 31, 2024 and 2023,