Compass Digital Acquisition Corp. reported significant financial changes in its 10-Q filing for the period ending September 30, 2024. The company, classified as a shell entity and smaller reporting company, has not yet commenced operations since its IPO on October 19, 2021, which raised $200 million.

As of September 30, 2024, Compass Digital's current assets decreased to $57,177 from $79,681 at the end of 2023, with cash holdings dropping to $33,544 from $44,046. The Trust Account, which previously held $55.3 million, now contains $27.4 million, reflecting substantial withdrawals due to shareholder redemptions. Total liabilities surged to $6.3 million from $1.4 million, primarily due to increased current liabilities, which rose from $860,274 to $5.5 million. The accumulated deficit expanded significantly to $(6.2 million) from $(1.4 million) at the end of 2023.

Operating expenses for the third quarter of 2024 were $837,885, up from $564,934 in the same period of 2023. The company reported a loss from operations of $(4.9 million) for the quarter, compared to a loss of $(594,934) in the prior year. For the nine months ended September 30, 2024, the net loss was $(4.2 million), a stark contrast to a net income of $5.4 million for the same period in 2023, which included a one-time gain from the settlement of deferred underwriting fees.

The company has faced challenges in maintaining liquidity, reporting a working capital deficit of $5.5 million. It has relied on various funding sources, including a $1.25 million draw from a Polar Capital Investment and loans from its sponsors. The company has until December 19, 2024, or April 19, 2025, if extensions are utilized, to complete a business combination, or it will face mandatory liquidation.

Strategically, Compass Digital entered into a Business Combination Agreement with EEW Renewables Ltd. on September 5, 2024, which will result in the merger of the two entities. The base consideration for the transaction is $300 million, payable in newly issued shares of the publicly traded company post-closing. The agreement includes performance-based earnout shares contingent on specific financial metrics.

As of September 30, 2024, the company’s securities were suspended from trading on Nasdaq due to its failure to complete the initial business combination by the deadline, leading to potential adverse effects on liquidity and market classification.