Company: CDAQF
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001641172-25-000421
Chunk: 953

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 5
Chunk 953
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2024 Non-Redemption Agreements, the Company agreed that,
in the event of the liquidation of the Trust Account, it will only utilize up to $50,000 of funds from the accrued interest of the Trust
Account to pay any dissolution expenses if it does not effect a Business Combination prior to the end of the Combination Period. As of
July 15, 2024, the Company estimated the aggregate fair value of these 742,490 Founder Shares at $4,076,270, or approximately $5.49 per
share on a weighted-average basis. As of December 31, 2024, the Company estimated the aggregate fair value of these 742,490 Founder Shares
at $4,028,008, or approximately $5.43 per share 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 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 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 statements of operations.

Public
Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants.
The Public Warrants