Company: CDAQF
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001641172-25-010268
Chunk: 16

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 1
Chunk 16
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 the Share Exchange and the other transactions contemplated by the Business
Combination Agreement and the ancillary documents, together, the “Transactions”), and any outstanding convertible securities
of EEW will be terminated; and (c) as a result of such Transactions, the Company and EEW each will become a wholly-owned subsidiary of
Pubco, and Pubco will become a publicly traded company upon the Closing.

Share Exchange and Consideration

The base consideration to be paid to the Sellers is
$300,000,000 (subject to increase to the extent that the Company’s unpaid transaction expenses and cash liabilities as of the Closing
that the Sponsor does not pay in cash exceeds $5,000,000, and subject to decrease to the extent that the amount of EEW’s unpaid
transaction expenses is more than $5,000,000), and will be paid entirely in the form of newly issued ordinary shares of Pubco, par value
$0.0001 per share (the “Pubco Ordinary Shares”), with each share valued at $10.00 (such shares, the “Exchange Shares”).

In addition to the base consideration as set forth
above, the Sellers will be entitled to receive up to an additional 4,200,000 Pubco Ordinary Shares, subject to equitable adjustment for
share splits, share dividends, combinations, recapitalizations and the like after the Closing, including to account for any equity securities
into which such shares are exchanged or converted (the “Earnout Shares”), as additional consideration from Pubco in the event
that:

(i) If during the 3-year period after the Closing
(the “Earnout Period”), the volume-weighted average price for Pubco Ordinary Shares for 20 out of 30 consecutive trading days
is at least: (i) $11.00 per share, the Sellers will receive 50% of the Earnout Shares and (ii) $12.00 per share, the Sellers will receive
the remaining 50% of the Earnout Shares; or

(ii) If Pubco’s consolidated earnings before
interest, taxes, depreciation, and amortization for the fiscal year ended April 30, 2025 equals or exceeds $41.9 million, subject to certain
adjustments, the Sellers will receive all of the Earnout Shares.

If there is a change-in-control
transaction during the Earnout Period, to the extent that the express or implied price per Pubco Ordinary Share in such transaction is
equal to or greater than the applicable