Company: CDAQF
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001641172-25-000421
Chunk: 248

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 1A
Chunk 248
---
 IPO Promissory
Note (see Note 5).

As
of December 31, 2024, the Company had drawn $1,250,000 from the Polar Capital Investment that was fair valued at $227,273, $125,000 outstanding
from the 2021 Working Capital Loans and $1,115,000 outstanding from the 2024 Working Capital Loan (see Note 5).

Based
on the foregoing, Management believes that the Company may not have sufficient working capital to meet its anticipated obligations through
the earlier of the consummation of an initial Business Combination or one year from the date of the accompanying financial statements.
Over this period, the Company will be using these funds for paying existing accounts payable, operating costs, identifying and evaluating
prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures,
selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.

In
connection with the Company’s assessment of going concern considerations in accordance with FASB ASC Subtopic 205-40 “Presentation
of Financial Statements – Going Concern,” the Company has until April 19, 2025 if all remaining monthly extensions pursuant
to the 2024 Extension Amendment Proposal are used, to consummate a Business Combination. It is uncertain that the Company will be able
to consummate a Business Combination by this time and the Company lacks the financial resources it needs to sustain operations for a
reasonable period of time, which is considered to be one year from the date of the accompanying financial statements. If a Business Combination
is not consummated with the Combination Period, there will be a mandatory liquidation and subsequent dissolution of the Company. The
Company cannot provide any assurance that (i) new financing will be available to it on commercially acceptable terms, if at all, or (ii)
that its plans to consummate an initial Business Combination will be successful. Management has determined that the liquidity condition
and mandatory liquidation should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about
the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that
might result from the Company’s inability to continue as a going concern.

    F-11

COMPASS
DIGITAL ACQUISITION CORP.

NOTES
TO FINANCIAL STATEMENTS

NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis
of Presentation