Company: CDAQF
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021994
Chunk: 24

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 24
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 within the Company’s control) are classified as temporary equity. At all other
times, Ordinary Shares are classified as shareholders’ deficit. The Ordinary 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 condensed balance sheets. For the three and nine months ended September 30, 2025 and 2024, the Company recorded
accretion on the Class A Ordinary Shares of $11,298 and $334,873, and $389,048 and $1,660,199, respectively, to redemption value related
to the interest in the Trust Account.

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 September
30, 2025 and December 31, 2024. The Company is currently not aware of any issues under review that could result in significant payments,
accruals or material deviation from its position.

    10

COMPASS
DIGITAL ACQUISITION CORP.

NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

SEPTEMBER
30, 2025

The
Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently
not subject to income taxes or income