Company: CDAQF
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001641172-25-000421
Chunk: 412

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 1C
Chunk 412
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in fair value of derivative warrant liabilities of $364,515, interest earned on cash held in the Trust Account of $8,914,159, gain on
settlement of professional legal fees of $351,409 and gain on settlement of deferred underwriting fees of $246,814.

Factors
That May Adversely Affect our Results of Operations

Our
results of operations and our ability to complete an initial Business Combination may be adversely affected by various factors that
could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our results of
operations and our ability to consummate a Business Combination could be impacted by, among other things, downturns in the financial
markets or in economic conditions, increases in oil prices, inflation, fluctuations in interest rates, increases in tariffs, supply chain disruptions,
declines in consumer confidence and spending, public health considerations, and geopolitical instability, such as the military
conflicts in Ukraine and the Middle East. We cannot at this time predict the likelihood of one or more of the above events, their
duration or magnitude or the extent to which they may negatively impact our business and our ability to complete an initial Business
Combination.

Liquidity,
Capital Resources and Going Concern

As
of December 31, 2024, we had $27,720 in our operating bank account and working capital deficit of $2,081,881. To date, our liquidity
needs have been satisfied through (i) a payment of $25,000 from the Legacy Sponsor to cover certain expenses on our behalf in exchange
for the issuance of the Founder Shares, (ii) a loan of approximately $195,000 pursuant to the IPO Promissory Note issued to an affiliate
of the Legacy Sponsor, (iii) the net proceeds from the consummation of the Private Placement not held in the Trust Account, (iv) borrowings
under the 2021 Promissory Note, (v) the Polar Capital Investment and (vi) borrowings under the 2024 Promissory Note.

IPO
Promissory Note

Prior
to the closing of our Initial Public Offering, an affiliate of the Legacy Sponsor loaned us an aggregate of up to $250,000 under the
IPO Promissory Note. Such loans and advances were non-interest bearing and payable on the earlier of December 31, 2021 or the completion
of our Initial Public Offering. The loans of $195,000 were fully rep