Company: CDAQF
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001641172-25-023544
Chunk: 35

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 1
Chunk 35
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 that the likelihood of the Sponsor’s exercise
of the option to convert to 2024 Note Warrants is de minimis. As a result, the Company recorded zero liability related to the conversion
option on the 2024 Promissory Note.

Polar
Capital Investment Payable – related party

On
September 6, 2023, the Company entered into a subscription agreement (the “Polar Subscription Agreement”) with the Sponsor
and Polar Multi-Strategy Master Fund (“Polar”), pursuant to which Polar agreed to fund up to $1,500,000 to Company, subject
to certain funding milestones. Once the Company has reached a defined milestone, upon on at least five (5) calendar days’ prior
written notice, the Sponsor may require a drawdown against the capital commitment in order to meet the Sponsor’s commitment to
the Company under a drawdown request (such funded amounts, the “Polar Capital Investment”). The Polar Capital Investment
will be repaid to Polar by the Company upon the closing of an initial Business Combination. Polar may elect to receive such repayment
(i) in cash or (ii) in Class A Ordinary Shares at a rate of one Class A Ordinary Share for each ten dollars of the Polar Capital Investment.
The Company must (i) to the extent feasible and in compliance with all applicable laws and regulations, register the shares issued to
Polar as part of any registration statement issuing shares before or in connection with the closing of a Business Combination or (ii)
if no such registration statement is filed in connection with the closing of a Business Combination, promptly register such shares pursuant
to the first registration statement filed by the Company or the surviving entity following a Business Combination, which shall be filed
no later than 30 days after the closing of a Business Combination and declared effective no later than 90 days after the closing of a
Business Combination. In consideration of the Polar Capital Investment, the Company has agreed to issue, or cause the surviving entity
in the Business Combination to issue, 0.9 of a Class A ordinary share of the surviving entity for each dollar of the Polar Capital Investment
funded as of or prior to the closing of the Business Combination. Upon certain events of default under the Polar Subscription Agreement,
the Company (or the surviving entity, as applicable) must issue to Polar an additional 0.1 of a Class A ordinary share for each dollar
of the Capital Investment funded as of the date of such default, and for each month thereafter until such default of