Denali Capital Acquisition (DECA) - 2024 Q4 - Annual Report

IPO and Business Combination - The company completed its IPO on April 11, 2022, raising gross proceeds of $82.5 million from the sale of 8,250,000 units at$10.00 per unit[23]. - The company has established criteria for evaluating potential business combinations, which Semnur is believed to meet[43]. - The company entered into a merger agreement with Semnur on August 30, 2024, with plans for Denali to be renamed Semnur Pharmaceuticals, Inc. upon completion[37]. - A preliminary prospectus/proxy statement was filed on November 6, 2024, regarding the proposed business combination with Semnur[38]. - The company plans to extend the deadline for business combination completion to December 11, 2025, with monthly extensions available[39]. - The Business Combination must meet the Nasdaq requirement of having a fair market value of at least 80% of the Trust Account assets[55]. - The deadline for completing an initial business combination was extended to April 11, 2025, with the possibility of further monthly extensions[56]. - If no initial business combination is completed by the Extended Date, the company will redeem public shares and liquidate[66]. - The company has not engaged in any operations or generated operating revenues to date, with activities focused on preparing for the IPO and identifying a target company for a business combination[120]. Shareholder Actions and Redemptions - Shareholders redeemed 3,712,171 public shares for approximately $40.5 million (about$10.92 per share) during the Extension Meeting, leaving 4,537,829 public shares outstanding[26]. - Shareholders holding 3,785,992 public shares redeemed their shares for a pro rata portion of the Trust Account, resulting in approximately $43.4 million removed, equating to about$11.47 per share[48]. - Following redemptions, 751,837 public shares remained outstanding[48]. - Public shareholders will have the opportunity to redeem shares at a price of $12.00 per share upon completion of the initial business combination[60]. - Redemption rights are limited to 15$167,306 for the year ended December 31, 2024, primarily due to formation and operating expenses of $1,649,106 and interest expense of$96,242, partially offset by income earned on investments held in the Trust Account of $1,578,042[122]. - For the year ended December 31, 2023, the Company reported a net income of$632,536, mainly from income earned on investments held in the Trust Account amounting to $3,843,271, offset by formation and operating expenses of$3,173,826 and interest expense of $36,909[123]. - The total amount placed in the Trust Account following the IPO was$84,150,000, with $1,515,795 of cash held outside the Trust Account for working capital purposes[132]. - The Company incurred$5,105,315 in transaction costs related to the IPO, including $1,650,000 in underwriting fees and$2,887,500 in deferred underwriting fees[132]. - For the year ended December 31, 2024, net cash used in operating activities was $753,296, primarily due to a net loss of$167,306 and changes in current assets and liabilities of $585,990[124]. - For the year ended December 31, 2024, net cash used in investing activities was$43,425,328, primarily due to cash withdrawn from the Trust Account in connection with the redemption of 3,785,992 shares of ordinary shares by public shareholders[126]. - For the year ended December 31, 2024, net cash provided by financing activities was $42,859,628, mainly from proceeds of$565,700 from the issuance of a promissory note to a related party[128]. Corporate Governance and Compliance - The board of directors consists of three members, with directors serving a two-year term[172]. - The audit committee is composed of independent directors, including Huifeng Chang, Jim Mao, and Kevin Vassily, with Kevin Vassily serving as the Chair[175]. - The audit committee is responsible for overseeing audits, monitoring the independence of the accounting firm, and ensuring compliance with applicable laws[176]. - The company has adopted a Code of Ethics applicable to directors, officers, and employees, which is available upon request[178]. - The company has an insider trading policy governing transactions of its securities by directors, officers, and employees[179]. - The audit committee will review all payments made to the sponsor, executive officers, and directors on a quarterly basis[197]. - The independent directors of the company will hold regularly scheduled meetings to discuss matters without the presence of non-independent directors[203]. Risks and Challenges - The company faces intense competition from other entities with similar business objectives, which may limit its ability to acquire larger target businesses[73]. - The company is subject to potential economic downturns and recent volatility in capital markets, which may affect its ability to complete a business combination[84]. - The company has evaluated conditions raising substantial doubt about its ability to continue as a going concern through April 11, 2025, if a business combination is not consummated[139]. - The company has no approved plan to extend the business combination deadline beyond April 11, 2025, raising substantial doubt about its ability to continue as a going concern[221]. Notes on Securities and Loans - The Company issued a convertible promissory note totaling up to $180,000 to the sponsor, with an initial principal balance of$15,037[110]. - The Company issued a Convertible Promissory Note totaling $825,000 to FutureTech, fully utilized to extend the business combination period, with an outstanding balance of$1,275,000 as of December 31, 2024[137]. - The Company has drawn down a total of $208,200 from an additional aggregate amount available under the Convertible Promissory Note, exceeding the permitted principal amount[134]. - The Company has a total principal amount of$2,000,000 under the amended Convertible Promissory Note as of January 24, 2025[134]. - The Company may repay loaned amounts from the proceeds held in the Trust Account if the initial business combination is completed[198].