Company: CDAQF
Filing Date: 2025-03-25
Form Type: DEF 14A
Source: 0001641172-25-000430
Chunk: 51

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-03-25
Form: DEF 14A
Chunk 51
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. To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, on October 19, 2023, we instructed Continental to liquidate the investments held in the Trust Account, and instead to hold the funds in the Trust Account in an interest bearing demand deposit account at a bank until the earlier of the consummation of our initial Business Combination or our liquidation. As a result, following the liquidation of investments in the Trust Account, we may receive less interest on the funds held in the Trust Account than the interest we would have received pursuant to our original Trust Account investments; however, interest previously earned on the funds held in the Trust Account still may be released to us to pay our taxes, if any, and certain other expenses as permitted. Consequently, the transfer of the funds in the Trust Account to an interest-bearing demand deposit account at a bank could reduce the dollar amount our Public Shareholders would receive upon any redemption or our liquidation.

In order to finance transaction costs in connection with an intended initial Business Combination, GCG, an affiliate of the Prior Sponsor committed, in the form of the 2021 Promissory Note, up to $1,000,000 to us to fund our expenses relating to investigating and selecting a target business, consummating a Business Combination, and other working capital requirements prior to our initial Business Combination. As of December 31, 2024, we had borrowed $125,000 and had $0 available to us under the 2021 Promissory Note.

Additionally, on September 6, 2023, we entered into a Subscription Agreement with the Sponsor and Polar Multi-Strategy Master Fund (“ Polar” and such agreement, the “ Polar Subscription Agreement”), pursuant to which Polar agreed to fund up to $1,500,000 to us, subject to certain funding milestones. Once we have reached a defined milestone, upon at least five (5) calendar days’ prior written notice, the Sponsor may require a drawdown against Polar’s capital commitment (the “ Polar Capital Investment”), in order to meet the Sponsor’s commitment to us under a drawdown request. As of December 31, 2024, we had drawn $1,250,000 on the Polar Capital Investment that was fair valued at $227,273. The Polar Capital Investment will be repaid to Polar by us upon the closing of an initial Business Combination. Polar may elect to receive such repayment (i) in cash or (ii) in Class A Ordinary