Company: CDAQF
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001641172-25-023544
Chunk: 137

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 8
Chunk 137
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 Sponsor. As of May 8, 2025, the Company estimated the aggregate fair value of these 40,000 Founder
Shares at $223,000, or approximately $5.56 per share on a weighted-average basis. As of June 30, 2025, pursuant to the various non-redemption
agreements, the Sponsor has agreed to transfer 782,490 Class B Ordinary Shares to certain investors on or promptly after the consummation
of the Business Combination.

26

As
of June 30, 2025 and December 31, 2024, the Company estimated the aggregate fair value of these 782,490 and 742,490 Founder Shares, respectively,
at $4,155,022 and $4,028,008, or approximately $5.31 and $5.43 per share, respectively, on a weighted-average basis. The Company considered
the estimated probability of the consummation of a Business Combination, estimated concessions and estimated cost of carrying charges
to eliminate the investor’s exposure to changes in the price of those Class B Ordinary Shares. The fair value of the Class B Ordinary
Shares was determined to be an expense in accordance with SAB 5T and classified as a liability due to the variability in the number of
Founder Shares to be transferred, depending on the timing of the Business Combination.

Critical
Accounting Estimates

This
section is based on our unaudited condensed financial statements and notes thereto contained elsewhere in this Report, which have been
prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect
the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial
statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments
and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe
to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions
or conditions.

Emerging
Growth Company

We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and we may
take advantage of certain exemptions from various reporting requirements that are applicable to other public companies