Company: CDAQF
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001641172-25-023544
Chunk: 33

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 1
Chunk 33
---
 Legacy Sponsor, its affiliates or the former officer and directors, the “2021 Working Capital Loan,”
and such loan from the Sponsor, its affiliates or the current directors or offices, the “2024 Working Capital Loan,” and
together, the “Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes would
either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000
of notes may be converted upon consummation of a Business Combination into warrants at a price of $1.50 per warrant. These warrants would
be identical to the Private Placement Warrants. In the event that a Business Combination does not close, the Company may use a portion
of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used
to repay the Working Capital Loans.

2021
Promissory Note Payable – Legacy Sponsor

On
December 30, 2021, there was a written agreement in place for the 2021 Working Capital Loan. The Company issued an unsecured promissory
note (the “2021 Promissory Note”) in the principal amount of up to $1,000,000 to YAS International, LLC (d/b/a Gupta Capital
Group), an affiliate of the Legacy Sponsor (“GCG”). The 2021 Promissory Note bears no interest and is repayable in full upon
consummation of the initial Business Combination. GCG has the option to convert any unpaid balance of the 2021 Promissory Note into warrants
to purchase one share of Class A Ordinary Shares equal to the principal amount of the 2021 Promissory Note so converted divided by $1.50
(the “2021 Note Warrants”). The terms of any such 2021 Note Warrants will be identical to the terms of the Private Placement
Warrants. As of June 30, 2025 and December 31, 2024, there was $125,000 outstanding on the 2021 Working Capital Loan. The Company determined
that the conversion option embedded in its Legacy Working Capital Loan should be bifurcated and accounted for as a derivative in accordance
with ASC 815. However, the exercise price of the underlying 2021 Note Warrants was greater than the closing price of the Private Placement
Warrants as of June 30,