Company: CDAQF
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001641172-25-010268
Chunk: 99

Company: Compass Digital Acquisition Corp.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 99
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 believes 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