Company: CDAQF
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001641172-25-000421
Chunk: 32

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 1
Chunk 32
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 the date of the liquidation of the Trust Account, if less
than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply
to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust
Account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the Initial
Public Offering against certain liabilities, including liabilities under the Securities Act.

17

However,
we have not asked our Sponsors to reserve for such indemnification obligations, nor have we independently verified whether our Sponsors
have sufficient funds to satisfy their indemnity obligations and we believe that our Sponsors’ only assets are our securities.
Therefore, we cannot assure you that our Sponsors would be able to satisfy those obligations. As a result, if any such claims were successfully
made against the Trust Account, the funds available for our initial Business Combination and redemptions could be reduced to less than
$10.00 per Public Share. In such event, we may not be able to complete our initial Business Combination, and a Public Shareholder would
receive such lesser amount per Public Share in connection with any redemption of its Public Shares. None of our Prior Directors and Officers
and officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective
target businesses.

In
the event that the funds in the Trust Account are reduced below the lesser of (i) $10.00 per Public Share and (ii) the actual amount
per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per share due to
reductions in the value of the Trust Account assets, in each case less taxes payable, and our Sponsors assert that they are unable to
satisfy their indemnification obligations or that they have no indemnification obligations related to a particular claim, our independent
directors would determine whether to take legal action against our Sponsors to enforce their indemnification obligations. While we currently
expect that our independent directors would take legal action on our behalf against our Sponsors to enforce their indemnification obligations
to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular
instance if, for example, the cost of such legal action is deemed