Company: CDAQF
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021994
Chunk: 32

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 32
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transaction costs attributable to Warrant liabilities.

Sponsor
Employment Agreement

The
Sponsor has entered into employment agreements, which include base salaries and bonuses for employees who may support both the Company
and its affiliated entities. Under the terms of employment agreements, the Sponsor may pay employee compensation through any entity it
controls, including the Company. Management determines that allocating base salary and discretionary bonuses ratably among its affiliated
entities is a fair and standard practice, as employees typically support multiple entities simultaneously. This approach ensures that
compensation costs are proportionally shared based on the benefit each affiliated entity receives, preventing any single entity from
bearing an unfair share of shared expenses. It aligns with common practices in multi-entity investment platforms, while still allowing
management the flexibility to adjust allocations based on specific operational or financial considerations. Consistent with this, certain
portions of payroll have been allocated to the Company. As of the three and nine months ended September 30, 2025, the Company incurred
and paid payroll and bonuses in the amount of $395 and $36,969, respectively. These amounts are included in the Company’s general
and administrative expenses on the accompanying unaudited condensed statements of operations. In connection with the employment agreements,
as of September 30, 2025, the Company paid $114,586 on the behalf of the Sponsor which is reflected as a due from sponsor on the accompanying
condensed balance sheets and will be paid at the consummation of a business combination.

    13

COMPASS
DIGITAL ACQUISITION CORP.

NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

SEPTEMBER
30, 2025

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