Company: CDAQF
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021994
Chunk: 19

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 19
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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 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.

On
November 3, 2025, the Company received a notice (the “Notice”) from EEW purporting to terminate the Business Combination
Agreement pursuant to Sections 10.1(b) and 10.1(d) thereof. On November 6, 2025, the Company sent a written response to EEW disputing
such termination, asserting, among other things, that the representations, warranties and covenants of the Company set forth in the Business
Combination Agreement purported by EEW in the Notice to have been breached by the Company either were not breached at all or were not
breached at a level giving rise to a termination right, and that, in any event, EEW does not have the right to terminate the Business
Combination Agreement due to EEW’s previous and continuing breaches of certain key coven