Company: CDAQF
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001641172-25-000421
Chunk: 533

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 2
Chunk 533
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2024 EGM. In exchange for these commitments not to redeem the 2024 Non-Redeemed Shares,
the Sponsor agreed to transfer to such investors an aggregate of (i) 412,498 Founder Shares held by the Sponsor for the first five (5)
months of the extension of the Combination Period from July 19, 2024 to December 19, 2024 pursuant to the 2024 Extension Amendment Proposal
and (ii) 82,498 Founder Shares held by the Sponsor per month, for each additional month of the extension of the Combination Period from
December 19, 2024 until April 19, 2025, as needed pursuant to the 2024 Extension Amendment Proposal, in connection with the closing of
the Business Combination, provided that (i) the investors did not exercise their redemption rights with respect to the 2024 Non-Redeemed
Shares in connection with the 2024 EGM and (ii) the 2024 Extension Amendment Proposal was approved.

In
connection with our entry into the 2024 Non-Redemption Agreements, we also agreed that, in the event of the liquidation of the Trust
Account, we will only utilize up to $50,000 of funds from the accrued interest of the Trust Account to pay any dissolution expenses if
we do not effect a Business Combination prior to the end of the Combination Period.

We
estimated the aggregate fair value of these 742,490 Founder Shares pursuant to the 2024 Non-Redemption Agreements at $4,028,0080, or
approximately $5.492543 per share on a weighted-average basis as of December 31, 2024. This estimate considers factors such as the probability
of consummation of the Business Combination, estimated concessions, and the cost of carrying charges to mitigate the investors’
exposure to fluctuations in the price of the Founder Shares. The fair value of these Founder Shares was determined to be an expense in
accordance with SAB 5T and classified as a liability due to the variability in the number of Founder Shares to be transferred, depending
on the timing of the Business Combination.

Critical
Accounting Estimates

This
Item of the Report is based on our financial statements and notes thereto contained elsewhere in this Report, which have been prepared
in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and