Company: CDAQF
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001641172-25-000421
Chunk: 141

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 1
Chunk 141
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 the sole recourse for Polar. As of December 31, 2024 and 2023, the
Company had drawn $1,250,000 and $500,000, respectively, on the Polar Capital Investment.

The
Company determined that the conversion option embedded in Polar Capital Investment should be bifurcated and accounted for as a derivative
in accordance with ASC 815. The Company selected the fair value method in the allocation of proceeds to the debt and equity instruments
issued in connection with the Polar Capital Investment. As of December 31, 2024, an aggregate of $1,022,727 had been allocated as debt
discount to reduce the fair value of the Polar Capital Investment to $227,273 as liabilities on the accompanying balance sheets. As of
December 31, 2023, $409,091 had been allocated as debt discount to reduce the fair value of the Polar Capital Investment to $90,909 as
liabilities on the accompanying balance sheets. Further, as of December 31, 2024 and 2023, $613,640 and $409,091, respectively, is allocated
to non-redeemable Class A Ordinary Shares and presented as additional paid in capital on the accompanying statements of changes in shareholders’
deficit.

Administrative
Services Agreement

Commencing
on October 14, 2021, and until completion of the Company’s initial Business Combination or liquidation, the Company may reimburse
the Sponsors up to an aggregate amount of $10,000 per month for office space and secretarial and administrative support pursuant to the
Administrative Services Agreement. Per the Administrative Services Agreement, it is at the Company’s option as to whether or not
to pay this administrative fee. The Legacy Sponsor assigned the Administrative Services Agreement to the Sponsor on August 31, 2023,
in connection with the Sponsor Handover. For the years ended December 31, 2024 and 2023, the total administrative expenses were $120,000.
As of December 31, 2024 and 2023, there was $160,000 and $40,000 accrued, but not paid.

    F-18

COMPASS
DIGITAL ACQUISITION CORP.

NOTES
TO FINANCIAL STATEMENTS

NOTE
6 - COMMITMENTS AND CONTINGENCIES

Registration
Rights

The
holders of the Founder Shares, Private Placement Warrants and any 2021 Note Warrants or 2024 Note Warrants (