Compass Digital Acquisition Corp. Reports $414K Net Loss and Significant Asset Decline in Latest 10-Q

Compass Digital Acquisition Corp. reported significant financial changes in its latest 10-Q filing for the quarter ending June 30, 2025. The company recorded a net loss of $414,318 for the three months ended June 30, 2025, compared to a net income of $475,460 for the same period in 2024. For the first half of 2025, the net loss totaled $897,389, a stark contrast to the net income of $362,270 reported in the first half of 2024. The decline in profitability was attributed to increased general and administrative expenses, which amounted to $97,120 for the quarter, down from $516,106 in the previous year, and a significant change in the fair value of derivative warrant liabilities.

The company’s total assets decreased dramatically from $27.7 million at the end of 2024 to approximately $1.4 million by June 30, 2025. This decline was primarily due to a substantial reduction in cash held in the Trust Account, which fell from $27.6 million to $1.3 million. The company also reported a working capital deficit of $2.7 million as of June 30, 2025, compared to a working capital deficit of $6.2 million at the end of the previous fiscal year. The decrease in cash reserves was largely influenced by the redemption of Class A Ordinary Shares, with approximately $26.7 million redeemed in connection with shareholder votes on various proposals.

Strategically, Compass Digital Acquisition Corp. has undergone significant organizational changes, including a sponsor handover that occurred on August 31, 2023. The Legacy Sponsor transferred its interests to HCG Opportunity, LLC, which now oversees the company’s operations. Additionally, the company has been actively pursuing a business combination, entering into a Business Combination Agreement with EEW Renewables Corp. on September 5, 2024. This agreement outlines a merger that would see Compass become a wholly-owned subsidiary of EEW, with the transaction expected to close by April 20, 2026.

Operationally, the company has faced challenges in maintaining liquidity, with only $1,521 in cash available as of June 30, 2025. The company has drawn $1.25 million from a Polar Capital Investment, which is subject to repayment upon the closing of the business combination. The company’s management has expressed concerns regarding its ability to meet financial obligations and complete the business combination within the designated timeframe, raising doubts about its ability to continue as a going concern.

Looking ahead, Compass Digital Acquisition Corp. is focused on finalizing its business combination with EEW Renewables and addressing its liquidity challenges. The company has extended its combination period to April 20, 2026, allowing additional time to secure a merger. However, the management has acknowledged the uncertainty surrounding the completion of the business combination and the potential for mandatory liquidation if the merger does not occur by the deadline.