Company: CDAQF
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001641172-25-000421
Chunk: 131

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 1
Chunk 131
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, non-redeemable Class A Ordinary Shares 
    $(0.38) 
    $0.19 

    Non-Redeemable Class B Ordinary Shares 

    Numerator: Net (loss) income allocable to non-redeemable Class B Ordinary Shares 

    Net (loss) income allocable to non-redeemable Class B Ordinary Shares 
    $(1,365,443) 
    $976,858 

    Denominator: Weighted Average Non-Redeemable Class B Ordinary Shares 
     3,570,396  
     5,188,478 
  
    Basic and diluted net (loss) income per share, non-redeemable Class B Ordinary Shares 
    $(0.38) 
    $0.19 

Warrant
Liability

The
Company accounts for its Warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s
specific terms and applicable authoritative guidance in ASC 480 and FASB ASC Topic 815, “Derivatives and Hedging” (“ASC
815”). The assessment considers whether the Warrants are freestanding financial instruments pursuant to ASC 480, meet the definition
of a liability pursuant to ASC 480, and whether the Warrants meet all of the requirements for equity classification under ASC 815, including
whether the Warrants are indexed to the Company’s own Ordinary Shares, among other conditions for equity classification. This assessment,
which requires the use of professional judgment, is conducted at the time of Warrant issuance and as of each subsequent quarterly period
end date while the Warrants are outstanding.

    F-14

COMPASS
DIGITAL ACQUISITION CORP.

NOTES
TO FINANCIAL STATEMENTS

For
issued or modified Warrants that meet all of the criteria for equity classification, the Warrants are required to be recorded as a component
of additional paid-in capital at the time of issuance. For issued or modified Warrants that do not meet all the criteria for equity classification,
the Warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter.
Changes in the estimated fair value of the Warrants are recognized as a non-cash gain or loss on the accompanying statements of operations.

Derivative
Financial Instruments

The
Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded
derivatives in accordance