In a recent development, Compass Digital Acquisition Corp. (NASDAQ:CDAQ), a special purpose acquisition company, has entered into non-redemption agreements with certain investors. These agreements are designed to prevent the redemption of 500,000 Class A ordinary shares ahead of a crucial shareholder meeting.
On Monday, Compass Digital Acquisition Corp. and HCG Opportunity, LLC, the sponsor, struck deals with third-party investors. The agreements were forged in anticipation of a shareholder meeting where an Extension Amendment Proposal will be considered.
This proposal seeks to extend the deadline for the company to finalize an initial business combination from July 19, 2024, to December 19, 2024, with the possibility of further monthly extensions up to April 19, 2025.
As part of the agreement, the sponsor will transfer a significant number of Class B ordinary shares to the investors if they do not redeem their shares and the Extension Amendment Proposal is approved. Specifically, the sponsor will transfer 83,332 Class B shares for the first five months of the extension and an additional 16,666 shares for each subsequent month needed, post the closing of the company's initial business combination.
This strategic move aims to maintain a higher level of funds in the company's trust account following the shareholder meeting. While these agreements do not guarantee the approval of the Extension Amendment Proposal, they are expected to contribute to the financial stability of the trust account.
The information for this article is based on a press release statement, and the company may seek similar agreements with other investors in connection with the upcoming meeting.
Shareholders are advised to review the Proxy Statement and other documents filed with the SEC for detailed information about the company, the Extension, and related matters. The documents are available on the SEC's website or by request from Compass Digital Acquisition Corp. directly.
This report includes forward-looking statements and should be considered in the context of various risk factors as detailed in company filings with the SEC. Compass Digital Acquisition Corp. does not undertake any obligation to update these statements following the publication of this article.
In other recent news, Compass Digital Acquisition Corp. has announced an extraordinary general meeting for its shareholders, replacing the company's 2023 Annual General Meeting. The meeting will be held at the offices of Ellenoff Grossman & Schole LLP in New York City, with the specific date and time to be detailed in an upcoming definitive proxy statement.
Shareholders have until June 21, 2024, to propose business for the meeting, which must align with Cayman Islands laws, U.S. Securities and Exchange Commission (SEC) regulations, and the company's own memorandum and articles of association.
The company, classified as a "blank check" company, has not disclosed any additional details regarding the nature of the business to be discussed at the meeting. Shareholders are advised to adhere to the set procedure for submitting proposals and ensure compliance with relevant legal frameworks.
The agenda will be strictly confined to matters stated in the definitive proxy statement, which will be accessible once filed with the SEC. These are among the recent developments for Compass Digital Acquisition Corp.
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