Company: CDAQF
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001641172-25-000421
Chunk: 937

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 5
Chunk 937
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 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 balance sheets.

For
the year ended December 31, 2024 and 2023, the Company recorded accretion on the Class A Ordinary Shares of $1,928,109 and $8,914,159,
respectively, to redemption value related to the interest in the Trust Account. For the year ended December 31, 2024 and 2023, the Class
A Ordinary Shares Subject to Redemption were reduced by $29,638,365 and $169,088,048, respectively, related to redemptions. For the year
ended December 31, 2024 and 2023, the Class A Ordinary Shares Subject to Redemption was increased by $0 and $7,187,357, respectively,
related to the waiver of deferred underwriting fees attributable to the Class A Ordinary Shares Subject to Redemption.

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.

ASC
740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions
taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be
sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits,
if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December
31, 2024 and 2023. The Company is currently not aware of any issues under review that could result in significant payments, accruals
or material deviation from its position.

The
Company is considered to be an exempted Cay