Company: TPET
Filing Date: 2025-06-10
Form Type: 10-Q
Source: 0001641172-25-014516
Chunk: 34

Company: Trio Petroleum Corp.
Filing Date: 2025-06-10
Form: 10-Q
Item: Part I, Item 1
Chunk 34
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 Subsidiary Note accrues interest at a rate of 12% per annum.

Under
the terms of the Loan Agreement, $585,000 of the Loan Amount is required to be used to pay the remaining cash amount payable to Novacor
in connection with the Novacor Acquisition; the remainder of the Loan Amount is to be used for ongoing operating costs of Trio Canada.
As of April 30, 2025, $334,081 has been used for consideration in the Novacor acquisition, and
the remaining, unused portion of the subsidiary loan is $796,919.

    15

NOTE
7 – COMMITMENTS AND CONTINGENCIES

From
time to time, the Company is subject to various claims that arise in the ordinary course of business. Management believes that any liability
of the Company that may arise out of or with respect to these matters will not materially adversely affect the financial position, results
of operations, or cash flows of the Company.

Unproved
Property Leases

The
Company holds various leases related to the unproved properties of the South Salinas Project; two of the leases are held with the same
lessor. The first lease, which covers 8,417 acres, was amended on May 27, 2022 to provide for an extension of then-current force majeure
status for an additional, uncontested twelve months, during which we would be released from having to evidence to the lessor the existence
of force majeure conditions. As consideration for the granting of the lease extension, the Company paid the lessor a one-time, non-refundable
payment of $252,512; this amount was capitalized and reflected in the balance of the oil and gas property as of October 31, 2022. The
extension period commenced on June 19, 2022 and currently, the “force majeure” status has been extinguished by the drilling
of the HV-1 well. The ongoing operation and oil production at the HV-3A well maintain the validity of the lease.

The
second lease covers 160 acres of the South Salinas Project; it is currently held by delay rental and is renewed every three years. Until
drilling commences, the Company is required to make delay rental payments of $30/acre per year. The Company is currently in compliance
with this requirement and have paid in advance the delay rental payment for the period from October 2024 through October 2025.

During