Company: CDAQF
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001641172-25-010268
Chunk: 100

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 100
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 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 March 31, 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 March 31, 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 March 31, 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

Commencing on October 14, 2021, and until completion
of the Company’s initial Business Combination or liquidation, the Company may reimburse the Sponsors up to an aggregate amount of
$10,000 per month for office space and secretarial and administrative support pursuant to the Administrative Services Agreement. Per the
Administrative Services Agreement, it is at the Company’s option as to whether or not to pay this administrative fee. The Legacy
Sponsor assigned the Administrative Services Agreement to the Sponsor on August 31, 2023, in connection with the Sponsor Handover. For
the three months ended March 31, 2025 and 2024, the total administrative expenses were $30,000. As of March 31, 2025 and December 31,
2024, there was $190,000 and $160,000, respectively, accrued, but not paid.

NOTE 6 - COMMITMENTS AND CONTINGENCIES

Registration Rights

The holders of the Founder Shares, Private Placement
Warrants