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FAIR VALUE MEASUREMENTS
 12 Months Ended
Dec. 31, 2025
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS

NOTE 10 - FAIR VALUE MEASUREMENTS

 

The following table presents information about the Company’s assets and liabilities that are measured at fair value at December 31, 2025 and 2024, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

 

Description  Level  December 31, 2025   Level  December 31, 2024 
Liabilities:                
Private Placement Warrants (1)  Level 2  $96,641   Level 2  $48,321 
Public Warrants (1)  Level 2  $141,603   Level 2  $70,802 
Non-redemption Liability (1)  Level 3  $6,025,173   Level 3  $4,028,008 
Polar Capital Investment Payable  Level 3  $261,520   Level 3  $227,273 

 

(1) Measured at fair value on a recurring basis.

 

Warrants

 

The Warrants are accounted for as liabilities pursuant to ASC 815-40 and are measured at fair value as of each reporting date. Changes in the fair value of the Warrants are recorded in the accompanying statements of operations at the end of each period. Transfers to/from Levels 1, 2 and 3 are recognized at the beginning of the reporting period in which a change in valuation technique or methodology occurs. The Warrants are accounted for as liabilities in accordance with ASC 815-40, and are presented within warrant liabilities on the accompanying consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the accompanying statements of operations.

 

Upon consummation of the Initial Public Offering on October 19, 2021, the Warrants were classified as Level 3 due to unobservable inputs used in the initial valuation. On December 9, 2021, the Public Warrants surpassed the 52-day threshold waiting period to be publicly traded in accordance with the IPO Registration Statement. Once publicly traded, the observable input qualifies the liability for treatment as a Level 1 liability. The estimated fair value of the Public Warrants was transferred from a Level 1 measurement to a Level 2 measurement due to lack of trading activity as of December 31, 2025 and 2024. As the transfer of Private Placement Warrants to anyone outside of a small group of individuals who are permitted transferees would result in the Private Placement Warrants having substantially the same terms as the Public Warrants, the Company determined that the fair value of each Private Placement Warrant is equivalent to that of each Public Warrant, with an insignificant adjustment for short-term marketability restrictions. As such, the Private Placement Warrants were classified as Level 2 as it references the price of Public Warrants.

 

The following table presents the changes in the fair value of warrant liabilities:

 

   Private
Placement		   Public   Warrant
Liabilities		 
             
Fair value as of December 31, 2024  $48,321   $70,802   $119,123 
Change in fair value (1)   48,320    70,801    119,121 
Fair value as of December 31, 2025  $96,641   $141,603   $238,244 

 

   Private
Placement		   Public   Warrant
Liabilities		 
             
Fair value as of December 31, 2023  $238,704   $349,760   $588,464 
Change in fair value (1)   (190,383)   (278,958)   (469,341)
Fair value as of December 31, 2024  $48,321   $70,802   $119,123 

 

(1) Changes in fair value are recognized in change in fair value of derivative warrant liabilities in the accompanying consolidated statements of operations.

 

 

COMPASS DIGITAL ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025