Company: CDAQF
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001641172-25-000421
Chunk: 488

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 1C
Chunk 488
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 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 to such investors to be $3,444,008 or on a weighted average of $4.59 per share as of October 19,
2023, which is estimated by taking into considerations 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 their Class
B Ordinary Shares. The fair value of the Class B Ordinary Shares was determined to be an expense in accordance with SAB 5T.

In
connection with the 2024 Non-Redemption Agreements (as defined in Note 6), the Sponsor agreed to transfer a total of 412,498 Founder
Shares (representing the transfer for the first five months of the extension period) to the investors, promptly following the closing
of the Business Combination. Additionally, the Sponsor will transfer an additional 82,498 shares for each month of extension from December
2024 through April 2025. In total, up to 742,490 Founder Shares may be transferred to the investors. The Company estimated the aggregate
fair value of these 742,490 Founder Shares at $4,076,270, or approximately $