Company: CDAQF
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021994
Chunk: 101

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 101
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 Founder Shares was determined to be an offering cost in accordance with SEC Staff Accounting Bulletin Topic
5A, “Expensing of Offering” and SEC Staff Accounting Bulletin Topic 5T, “Accounting for Expenses or Liabilities Paid
by Principal Stockholder(s)” (“SAB 5T”). Accordingly, the offering cost was allocated to the separable financial instruments
issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs related
to the Founder Shares amounted to $10,414,655, of which $10,062,469 was charged to shareholders’ deficit upon the completion of
the Initial Public Offering and $352,186 was expensed to the accompanying unaudited condensed statements of operations and included in
transaction costs attributable to Warrant liabilities.

Sponsor
Employment Agreement

The
Sponsor has entered into employment agreements, which include base salaries and bonuses for employees who may support both the Company
and its affiliated entities. Under the terms of employment agreements, the Sponsor may pay employee compensation through any entity it
controls, including the Company. Management determines that allocating base salary and discretionary bonuses ratably among its affiliated
entities is a fair and standard practice, as employees typically support multiple entities simultaneously. This approach ensures that
compensation costs are proportionally shared based on the benefit each affiliated entity receives, preventing any single entity from
bearing an unfair share of shared expenses. It aligns with common practices in multi-entity investment platforms, while still allowing
management the flexibility to adjust allocations based on specific operational or financial considerations. Consistent with this, certain
portions of payroll have been allocated to the Company. As of the three and nine months ended September 30, 2025, the Company incurred
and paid payroll and bonuses in the amount of $395 and $36,969, respectively. These amounts are included in the Company’s general
and administrative expenses on the accompanying unaudited condensed statements of operations. In connection with the employment agreements,
as of September 30, 2025, the Company paid $114,586 on the behalf of the Sponsor which is reflected as a due from sponsor on the accompanying
condensed balance sheets and will be paid at the consummation of a business combination.

    13

COMPASS
DIGITAL ACQUISITION CORP.

NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

SEPTEMBER
30, 2025

In
connection with the Non