Company: CDAQF
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021994
Chunk: 37

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 37
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 Business Combination or (ii)
if no such registration statement is filed in connection with the closing of a Business Combination, promptly register such shares pursuant
to the first registration statement filed by the Company or the surviving entity following a Business Combination, which shall be filed
no later than 30 days after the closing of a Business Combination and declared effective no later than 90 days after the closing of a
Business Combination. In consideration of the Polar Capital Investment, the Company has agreed to issue, or cause the surviving entity
in the Business Combination to issue, 0.9 of a Class A ordinary share of the surviving entity for each dollar of the Polar Capital Investment
funded as of or prior to the closing of the Business Combination. Upon certain events of default under the Polar Subscription Agreement,
the Company (or the surviving entity, as applicable) must issue to Polar an additional 0.1 of a Class A ordinary share for each dollar
of the Capital Investment funded as of the date of such default, and for each month thereafter until such default of failure is cured,
subject to certain limitations provided for therein. In the event the Company liquidates without consummating a Business Combination,
any amounts remaining in the Company’s cash accounts (excluding the Trust Account) will be paid to Polar by the Company within
five (5) calendar days of the liquidation, and such amounts will be the sole recourse for Polar. As of September 30, 2025 and December
31, 2024, the Company had drawn $1,250,000 on the Polar Capital Investment.

The
Company determined that the conversion option embedded in Polar Capital Investment should be bifurcated and accounted for as a derivative
in accordance with ASC 815. The Company selected the fair value method in the allocation of proceeds to the debt and equity instruments
issued in connection with the Polar Capital Investment. As of September 30, 2025 and December 31, 2024, an aggregate of $1,022,727 had
been allocated as debt discount to reduce the fair value of the Polar Capital Investment to $227,273 as liabilities on the accompanying
balance sheets. Further, as of September 30, 2025 and 2024, $0 and $204,549, respectively, is allocated to non-redeemable Class A Ordinary
Shares and presented as additional paid-in capital on the accompanying unaudited condensed statements of changes in shareholders’
deficit.

Administrative
Services Agreement

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on