Company: CDAQF
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001641172-25-000421
Chunk: 164

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 1A
Chunk 164
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    ●
    changes in laws or regulations,
    or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete
    our initial Business Combination, and results of operations;

    ●
    if we are deemed to be
    an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our
    activities may be restricted, which may make it difficult for us to complete our initial Business Combination;

    ●
    to mitigate the risk that
    we might be deemed to be an investment company for purposes of the Investment Company Act, on October 19. 2023, we instructed the
    trustee to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in an interest-bearing
    demand deposit account at a bank until the earlier of the consummation of our initial Business Combination or our liquidation. As
    a result, we may receive less interest on the funds held in the Trust Account than the interest we would have received pursuant to
    our original Trust Account investments, which could reduce the dollar amount our Public Shareholders would receive upon any redemption
    or our liquidation;

    ●
    we may seek to further
    extend the Combination Period, which could have a material adverse effect on the amount held in our Trust Account and other adverse
    effects on our Company; and

    ●
    there is substantial doubt
    about our ability to continue as a “going concern”.

Our
Public Shareholders’ exercise of redemption rights with respect to a large number of Public Shares in the Extension Redemptions
may affect our ability to complete an initial Business Combination in the most desirable manner that will optimize the capital structure
of the combined company, or at all.

Over
the past two years, the redemption rate of shares held by public shareholders of SPACs at the time of a shareholders meeting that approves
an amendment to the charter of the SPAC or the initial Business Combination of the SPAC has been very high, thereby increasing the likelihood
that we, too, may be subject to significant redemptions that may affect our ability to complete an initial Business Combination.

In
the Extension Redemptions, 18,759,003 Public Shares were redeemed, thereby reducing the (x) number of outstanding Public Shares to 2,481,485
and (y) total amount held in the Trust Account to approximately $27,637,