Company: CDAQF
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001641172-25-010268
Chunk: 123

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 123
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631,967.

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 March 31, 2025, we had $1,403 in our operating bank account and a working capital deficit of $2,572,223. 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 repaid upon the consummation of our Initial Public Offering on October
19, 2021. No additional borrowing is available under the IPO Promissory Note.

Working
Capital Loans

In
order to finance transaction costs in connection with a Business Combination, holders of our Founder Shares prior to