Company: TPET
Filing Date: 2025-09-12
Form Type: 10-Q
Source: 0001493152-25-013189
Chunk: 134

Company: Trio Petroleum Corp.
Filing Date: 2025-09-12
Form: 10-Q
Item: Part I, Item 8
Chunk 134
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 cash equivalents as of July 31, 2025 and October 31, 2024.

Prepaid
Expenses

Prepaid
expenses consist primarily of payments made in advance for goods or services to be received in future periods. These include prepaid
insurance, software subscriptions, and lease-related costs. Prepaid expenses are recorded as current assets and amortized on a straight-line
basis over the period of benefit.

During
the quarter ended July 31, 2025, the Company entered into a short-term surface lease agreement for access to land in Saskatchewan, Canada,
related to oil and gas development activities, including a well site and access road. In accordance with ASC 842 - Leases and
the Company’s lease accounting policy, the full lease payment of $15,535 CAD was made on May 1, 2025 and recorded as a Prepaid
Lease Expense. The lease term is 12 months, and the expense is recognized ratably over the lease period. As of July 31, 2025, $3,884
CAD has been recognized in Operating Expenses, with the remaining $11,651.26 CAD classified as a current asset.

As
of July 31, 2025 and October 31, 2024, the balances of the prepaids account were $196,400 and $279,274, respectively.

Loan
Receivables

Loan
receivables are recorded at their outstanding principal balance, net of any allowance for credit losses. The Company evaluates the collectability
of loan receivables based on historical experience, current economic conditions, and the creditworthiness of borrowers. The Company maintains
an allowance for credit losses to cover estimated losses; the allowance is determined based on historical loss experience, current economic
conditions and specific borrower risk assessments. Adjustments to the allowance are recorded through provision for credit losses in the
statement of operations. Interest income on loan receivables is recognized using the effective interest method. Loans are placed on nonaccrual
status when collection of principal or interest is uncertain. Loan receivables are reviewed periodically for impairment. If a loan is
deemed uncollectible, the Company records a charge-off against the allowance for credit losses.

Debt
Issuance Costs

Costs
incurred in connection with the issuance of the Company’s debt have been recorded as a direct reduction against the debt and amortized
over the life of the associated debt as a component of interest expense. As