Company: CDAQF
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001641172-25-000421
Chunk: 136

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 1
Chunk 136
---
 Company completes a liquidation, merger,
capital share exchange or similar transaction that results in the Company’s shareholders having the right to exchange their Ordinary
Shares for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Class A Ordinary Shares or
exceeds $12.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20
trading days within any 30-trading day period commencing at least 120 days after the Business Combination, the Founder Shares will be
released from the lock-up.

    F-16

COMPASS
DIGITAL ACQUISITION CORP.

NOTES
TO FINANCIAL STATEMENTS

In
connection with the closing of the Initial Public Offering, the Legacy Sponsor sold equity interest of the Legacy Sponsor equivalent
to 1,547,727 Founder Shares to the Institutional Anchor Investors at the original purchase price of $0.004 per share. The Company estimated
the aggregate fair value of the Founder Shares attributable to the Institutional Anchor Investors to be $6.73 per share. The fair value
of the Founder Shares was valued based on the probability of the Company completing a Business Combination and marketability. The excess
of the fair value of the Founder Shares was determined to be an offering cost in accordance with SEC Staff Accounting Bulletin Topic
5A, “Expensing of Offering” and SEC Staff Accounting Bulletin Topic 5T, “Accounting for Expenses or Liabilities Paid
by Principal Stockholder(s)” (“SAB 5T”). Accordingly, the offering cost was allocated to the separable financial instruments
issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs related
to the Founder Shares amounted to $10,414,655, of which $10,062,469 was charged to shareholders’ deficit upon the completion of
the Initial Public Offering and $352,186 was expensed to the accompanying statements of operations and included in transaction costs
attributable to Warrant liabilities.

In
connection with the Non-Redemption Agreements (as defined in Note 6), the Sponsor agreed to transfer to such investors an aggregate of
749,810 Founder Shares held by the Sponsor promptly following the closing of the Business Combination (but no later than two business
days after the satisfaction of the requisite conditions to such transfer). The Company estimated the aggregate fair value of the 749,810
Class B Ordinary Shares attributable