Company: CDAQF
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001641172-25-023544
Chunk: 109

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 8
Chunk 109
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 an additional 20,000 Founder Shares held by the 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.

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.

NOTE
7 – DERIVATIVE WARRANT LIABILITIES

The
Company issued 11,912,228 Warrants in connection with the Initial Public Offering and partial exercise of the Over-Allotment Option (including
6,666,667 Public Warrants and 4,666,667 Private Placement Warrants at the time of Initial Public Offering, and additional 413,496 Public
Warrants and 165,398 Private Placement Warrants at the time of the partial exercise of the Over-Allotment Option) in accordance with
the guidance contained in ASC 815-40. Such guidance provides that because the Warrants do not meet the criteria for equity treatment
thereunder, each Warrant was recorded as a liability. Accordingly, the Company has classified each Warrant as a liability at its fair
value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the Warrant liability will
be adjusted to fair value, with the change in fair value recognized in the Company’s condensed statements of operations.

Public
Warrants may only be exercised for