Company: TPET
Filing Date: 2025-01-17
Form Type: 10-K
Source: 0001493152-25-002760
Chunk: 40

Company: Trio Petroleum Corp.
Filing Date: 2025-01-17
Form: 10-K
Item: Item 13
Chunk 40
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 LLC and the issuance of 245,000 shares of common stock. As of the
date of the acquisition, Trio LLC owned 45% of the outstanding shares of the Company and was considered a related party. As of October
31, 2024 and 2023, Trio LLC owned less than 1% and 1%, respectively, of the outstanding shares of the Company.

Income
Taxes

Deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit
carry forwards, 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 includes the enactment date.

The
Company utilizes ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial statements or tax returns. The Company accounts for income
taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related
financial amounts, using currently enacted tax rates. A valuation allowance is recorded when it is “more likely than not”
that a deferred tax asset will not be realized. At October 31, 2024 and 2023, the Company’s net deferred tax asset has been fully
reserved.

For
uncertain tax positions that meet a “more likely than not” threshold, the Company recognizes the benefit of uncertain tax
positions in the financial statements. The Company’s practice is to recognize interest and penalties, if any, related to uncertain
tax positions in income tax expense in the statements of operations when a determination is made that such expense is likely. The Company
is subject to income tax examinations by major taxing authorities since inception.

Fair
Value Measurements

The
carrying values of financial instruments comprising cash and cash equivalents, payables, and notes payable-related party approximate
fair values due to the short-term maturities of these instruments. The notes payable- related party is considered a level 3 measurement.
As defined in ASC 820, Fair Value Measurements and Disclosures, fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market participants at the measurement date