Company: CDAQF
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001641172-25-000421
Chunk: 5

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 1
Chunk 5
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 of EEW’s unpaid transaction expenses is more than $5,000,000), and will be paid entirely in the form of Pubco Ordinary
Shares), with each share valued at $10.00 (such shares, the “Exchange Shares”).

3

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: (x) $11.00 per share, the Sellers will receive 50% of the Earnout Shares and (y)
    $12.00 per share, the Sellers will receive the remaining 50% of the Earnout Shares; or

    (ii)
    if Pubco’s consolidated
    EBITDA 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 share price targets as set forth above, the vesting of such Earnout
Shares will accelerate and the Earnout Shares will be issuable upon the closing of such transaction.

Representations
and Warranties

The
EEW Business Combination Agreement contains a number of representations and warranties made by the parties as of the date of the EEW
Business Combination Agreement or other specific dates solely for the benefit of certain of the parties to the EEW Business Combination
Agreement, which in certain cases are subject to specified exceptions and materiality, Material Adverse Effect (as defined below), knowledge
and other qualifications contained in the Business Combination Agreement or in information provided pursuant to certain disclosure schedules
to the Business Combination Agreement. “Material Adverse Effect” as used in the EEW Business Combination Agreement means
with respect to any specified person or