Company: CDAQF
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001641172-25-010268
Chunk: 28

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 1
Chunk 28
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5 and December 31, 2024, the Company had 2,110,122
Class B Ordinary Shares issued and outstanding.

Pursuant to the Letter Agreement, the Sponsors have
agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (i) one year after the completion of
a Business Combination or (ii) the date on which the Company completes a liquidation, merger, capital share exchange or similar transaction
that results in the Company’s shareholders having the right to exchange their Ordinary Shares for cash, securities or other property.
Notwithstanding the foregoing, if the last sale price of the Class A Ordinary Shares or exceeds $12.00 per share (as adjusted for share
splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing
at least 120 days after the Business Combination, the Founder Shares will be released from the lock-up.

    13

COMPASS DIGITAL ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2025

In connection with the closing of the Initial Public
Offering, the Legacy Sponsor sold equity interest of the Legacy Sponsor equivalent to 1,547,727 Founder Shares to the Institutional Anchor
Investors at the original purchase price of $0.004 per share. The Company estimated the aggregate fair value of the Founder Shares attributable
to the Institutional Anchor Investors to be $6.73 per share. The fair value of the Founder Shares was valued based on the probability
of the Company completing a Business Combination and marketability. The excess of the fair value of the 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