Company: CDAQF
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001641172-25-023544
Chunk: 18

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 1
Chunk 18
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 per share (the “Pubco Ordinary Shares”), with each share valued
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.

    8

COMPASS
DIGITAL ACQUISITION CORP.

NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

JUNE
30, 2025

Liquidity
and Going Concern

As
of June 30, 2025, the Company had $1,521 in its operating bank accounts and a working capital deficit of $2,699,343.

To
date, the Company’s liquidity needs have been satisfied through (i) a payment of $25,000 from the Legacy Sponsor to cover certain
expenses on behalf of the Company in exchange for the issuance of the Founder Shares, (ii) a loan of approximately $195,000 from the
Legacy Sponsor pursuant to a promissory note for up to $