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Denali Capital Acquisition Corp.(DECAU) - 2023 Q3 - Quarterly Report
DECAUDenali Capital Acquisition Corp.(DECAU)2023-11-09 21:58

Financial Performance - Net income for the three months ended September 30, 2023, was 630,586,comparedto630,586, compared to 307,468 for the same period in 2022, reflecting an increase of approximately 105%[10] - Basic and diluted net income per share for redeemable ordinary shares was 0.12forthethreemonthsendedSeptember30,2023,comparedto0.12 for the three months ended September 30, 2023, compared to 0.04 for the same period in 2022, indicating a 200% increase[10] - The company reported a net loss of (1,009,102)fortheninemonthsendedSeptember30,2023,comparedtoanetincomeof(1,009,102) for the nine months ended September 30, 2023, compared to a net income of 265,278 for the same period in 2022[10] - As of September 30, 2023, the company reported a net income of 79,193,comparedtoanetincomeof79,193, compared to a net income of 265,278 for the period from January 5, 2022, through September 30, 2022[16] - For the three months ended September 30, 2023, the company reported a net income of 630,586,primarilyfrominterestincomeof630,586, primarily from interest income of 1,151,229[148] - For the nine months ended September 30, 2023, the net income was 79,193,withtotalinterestincomeof79,193, with total interest income of 3,089,734[149] Assets and Liabilities - Total assets as of September 30, 2023, increased to 90,146,984from90,146,984 from 86,279,436 as of December 31, 2022, representing a growth of approximately 3.2%[9] - Current liabilities rose significantly to 5,079,996asofSeptember30,2023,comparedto5,079,996 as of September 30, 2023, compared to 1,291,641 as of December 31, 2022, marking an increase of approximately 293%[9] - The total liabilities as of September 30, 2023, were 7,967,496,upfrom7,967,496, up from 4,179,141 as of December 31, 2022, reflecting an increase of approximately 91%[9] - The accumulated deficit increased to (7,932,103)asofSeptember30,2023,from(7,932,103) as of September 30, 2023, from (3,271,562) as of December 31, 2022, representing a deterioration of approximately 142%[11] - Total current assets as of September 30, 2023, were 35,650,comparedto35,650, compared to 907,836 as of December 31, 2022, indicating a decrease of approximately 96%[9] - The company had cash at the end of the period amounting to 13,460,downfrom13,460, down from 985,578 at the end of the previous period[16] - The Company had a working capital deficit of 5,044,346asofSeptember30,2023,indicatingliquiditychallenges[48]IPOandFinancing−Thecompanygeneratedgrossproceedsof5,044,346 as of September 30, 2023, indicating liquidity challenges[48] IPO and Financing - The company generated gross proceeds of 82,500,000 from the IPO of 8,250,000 units, sold at a price of 10.00perunit[20]−TotaltransactioncostsfortheIPOamountedto10.00 per unit[20] - Total transaction costs for the IPO amounted to 5,105,315, which included 1,650,000inunderwritingfeesand1,650,000 in underwriting fees and 2,887,500 in deferred underwriters' fees[20] - The Company deposited a total of 84,150,000intotheTrustAccountfollowingtheIPOonApril11,2022,andsubsequentlyextendedthedeadlineforabusinesscombinationtoJuly11,2024,throughmultipleextensions[21][22]−TheCompanyincurred84,150,000 into the Trust Account following the IPO on April 11, 2022, and subsequently extended the deadline for a business combination to July 11, 2024, through multiple extensions[21][22] - The Company incurred 5,105,315 in transaction costs related to the IPO, including 1,650,000inunderwritingfees[44]−ThegrossproceedsfromtheIPOamountedto1,650,000 in underwriting fees[44] - The gross proceeds from the IPO amounted to 82,500,000, after deducting offering costs and allocations, the net proceeds were significantly lower[76] - The company also raised 5,100,000fromaprivateplacementof510,000PrivatePlacementUnitsatthesamepriceof5,100,000 from a private placement of 510,000 Private Placement Units at the same price of 10.00 per unit[93] Business Combination Plans - The company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination[17] - The Merger Agreement with Longevity Biomedical, Inc. includes the acquisition of Cerevast Medical, Aegeria Soft Tissue, and Novokera, with the Company merging into Denali Merger Sub[27][28] - The proposed Longevity Business Combination is subject to shareholder approval and other conditions, with no assurance of successful completion[29] - The Company plans to complete a Business Combination with a target that has a fair market value of at least 80% of the Trust Account assets, which must not fall below 10.20perPublicShare[22][24]−TheMinimumCashConditionforthebusinesscombinationwaswaivedbyLongevity,allowingthetransactiontoproceedwithouttherequirementof10.20 per Public Share[22][24] - The Minimum Cash Condition for the business combination was waived by Longevity, allowing the transaction to proceed without the requirement of 30 million in unrestricted cash proceeds[141] - The company intends to focus on technology, consumer, and hospitality sectors for its initial business combination, avoiding targets headquartered or primarily operating in China[128] Shareholder Actions and Extensions - On October 11, 2023, shareholders redeemed approximately 40.5million(about40.5 million (about 10.92 per share) from the Trust Account, leaving 4,537,829 public shares outstanding[21] - On October 11, 2023, shareholders approved an extension for the company to complete its initial business combination from October 11, 2023, to July 11, 2024, with the option to extend monthly for up to nine times[123] - The Company will not redeem Public Shares if it would cause net tangible assets to fall below 5,000,001,althoughthislimitationwaseliminatedinarecentshareholdermeeting[24][25]−TheSponsorwilldeposit5,000,001, although this limitation was eliminated in a recent shareholder meeting[24][25] - The Sponsor will deposit 50,000 for each one-month extension of the business combination deadline, with a maximum of nine extensions available[21] Debt and Interest Expenses - The Company issued a Convertible Promissory Note totaling 825,000totheSponsor,withaninitialprincipalbalanceof825,000 to the Sponsor, with an initial principal balance of 412,500, and the remaining amount drawable at the Company's request[37] - The Company recognized accrued interest expenses of 10,290relatedtotheSponsor′sloansand10,290 related to the Sponsor's loans and 8,897 related to FutureTech as of September 30, 2023[48][50] - The Company has a total outstanding amount of 642,500undertheSponsorConvertiblePromissoryNoteasofOctober12,2023[146][161]−Thecompanyissuedaconvertiblepromissorynotetotalingupto642,500 under the Sponsor Convertible Promissory Note as of October 12, 2023[146][161] - The company issued a convertible promissory note totaling up to 450,000 to FutureTech, with an initial principal balance of $50,000, to fund the extension of the business combination deadline[124] Regulatory and Compliance - The Company has filed a Form S-4 with the SEC to register shares related to the business combination, with multiple amendments filed throughout 2023[34] - The Company has not recognized any stock-based compensation expense related to founder shares as a Business Combination is not considered probable as of September 30, 2023[98] - The company is assessing the impact of ASU 2020-06, effective January 1, 2024, on its financial position and results of operations[88] - The company has not disclosed any material changes to risk factors since the last annual report[186] - The company’s disclosure controls and procedures were evaluated as effective by the CEO and CFO as of September 30, 2023[183] Miscellaneous - The company has not commenced any operations as of September 30, 2023, and does not expect to generate operating revenues until after completing a business combination[18] - The Cayman Islands is the company's only major tax jurisdiction, with no income tax imposed for the nine months ended September 30, 2023[87] - No legal proceedings are currently pending against the company[184] - The Company has recognized changes in redemption value of Class A ordinary shares immediately, adjusting the carrying value to equal the redemption value at the end of each reporting period[75]