Company: CDAQF
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001641172-25-010268
Chunk: 21

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 1
Chunk 21
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 in Trust Account

At March 31, 2025 and December 31,
2024, the Company had $27,879,831 and
$27,637,300, respectively, in cash held in
the Trust Account. At March 31, 2025 and December 31, 2024, all of the assets held in the Trust Account were held in demand deposit accounts.

Class A Ordinary Shares Subject to Redemption

The Company accounts for its Ordinary Shares subject
to possible redemption in accordance with the guidance in ASC 480. Ordinary Shares subject to mandatory redemption (if any) are classified
as a liability instrument and are measured at fair value. Conditionally redeemable Ordinary Shares (including Ordinary Shares that feature
redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not
solely within the Company’s control) are classified as temporary equity. At all other times, Ordinary Shares are classified as shareholders’
deficit. The Ordinary Shares feature certain redemption rights that are considered to be outside of the Company’s control and subject
to the occurrence of uncertain future events. Accordingly, Ordinary Shares subject to possible redemption are presented at redemption
value as temporary equity, outside of the shareholders’ deficit section of the accompanying condensed balance sheets.
For the three months ended March 31, 2025 and 2024, the Company recorded accretion on the Class A Ordinary Shares of $242,531 and $631,967,
respectively, to redemption value related to the interest in the Trust Account.

Income Taxes

The Company complies with the accounting and reporting
requirements of FASB ASC Topic 740, “Income Taxes” (“ASC 740”), which requires an asset and liability approach
to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between
the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted
tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

    10

COMPASS DIGITAL ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2025

ASC 740 prescribes a recognition threshold and a measurement
attribute for the financial statement recognition and measurement of tax positions taken or