Company: CDAQF
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001641172-25-000421
Chunk: 20

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 1
Chunk 20
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,
in the event we do not consummate the EEW Business Combination and we seek to complete an initial Business Combination with a target
that is affiliated with our Sponsors, Prior Directors and Officers, or members of our Management Team, we, or a committee of independent
directors, would obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal
firm, that such an initial Business Combination is fair to our Company from a financial point of view. We are not required to obtain
such an opinion in any other context.

Evaluation
of a Target Business and Structuring of Our Initial Business Combination

In
evaluating a prospective target business, such as EEW, we conduct a due diligence review that encompasses, among other things, meetings
with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as applicable,
as well as a review of financial, operational, legal and other information that is made available to us. If we determine to move forward
with a particular target, we will proceed to structure and negotiate the terms of the Business Combination transaction.

Any
costs incurred with respect to the identification and evaluation of, and negotiation with, a prospective target business with which our
initial Business Combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to
complete another Business Combination. We will not pay any consulting fees to members of our Management Team, or any of their respective
affiliates, for services rendered to or in connection with our initial Business Combination.

Lack
of Business Diversification

For
an indefinite period of time after the completion of our initial Business Combination, the prospects for our success may depend entirely
on the future performance of a single business. Unlike other entities that have the resources to complete Business Combinations with
multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate
the risks of being in a single line of business. By completing our initial Business Combination with only a single entity, our lack of
diversification may:

    ●
    subject us to negative
    economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry
    in which we operate after our initial Business Combination; and 

    ●
    cause us to depend on the
    marketing and sale of a single product or limited number of products or services. 

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