Company: CDAQF
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001641172-25-000421
Chunk: 27

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 1
Chunk 27
---
 paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii)
the retention of cash to satisfy other conditions. In the event the aggregate cash consideration we would be required to pay for all
Public Shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of
the proposed initial Business Combination exceed the aggregate amount of cash available to us, we will not complete the initial Business
Combination or redeem any Public Shares, and all Public Shares submitted for redemption will be returned to the holders thereof. We may,
however, raise funds through the issuance of equity-linked securities or through loans, advances or other indebtedness in connection
with our initial Business Combination, including pursuant to any forward purchase agreements or backstop arrangements we may enter into
following closing of the Initial Public Offering, in order to, among other reasons, satisfy such net tangible assets or minimum cash
requirements.

See
the 2025 Proxy Statement for additional information regarding removal of the Redemption Limitation from our Amended and Restated
Charter.

Limitation
on Redemption Upon Completion of Our Initial Business Combination If We Seek Shareholder Approval

If
we seek shareholder approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business
Combination pursuant to the tender offer rules, our Amended and Restated Charter provides that a Public Shareholder, together with any
affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined
under Section 13 of the Exchange Act), will be restricted from redeeming its Public Shares with respect to more than an aggregate of
15% of the Public Shares sold in the Initial Public Offering (“Excess Shares”), without our prior consent. We believe this
restriction will discourage Public Shareholders from accumulating large blocks of Public Shares, and subsequent attempts by such holders
to use their ability to exercise their redemption rights against a proposed Business Combination as a means to force us or our Management
to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision,
a Public Shareholder holding Excess Shares could threaten to exercise its redemption rights if such holder’s Excess Shares are
not purchased by us, our Sponsor or our Management at a premium to the then-current market price or on other undesirable terms. By limiting
our shareholders’ ability to redeem no more than 15% of the Public Shares sold