Denali Capital Acquisition Corp.(DECAU) - 2024 Q4 - Annual Report

IPO and Financial Proceeds - 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]. - A total of $84,150,000 of the net proceeds from the IPO and Private Placement Units was deposited in the Trust Account, with transaction costs amounting to$5,105,315[94]. - The company completed a Private Placement of 510,000 Private Placement Units at a purchase price of $10.00 per unit, generating gross proceeds of$5.1 million[91]. - The underwriters received a cash underwriting discount of $1,650,000 and a deferred fee of$2,887,500, contingent upon the completion of a business combination[145]. - 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]. Business Combination and Extensions - The company extended the deadline to consummate an initial business combination from October 11, 2023, to July 11, 2024, with the option for up to nine one-month extensions[25]. - The deadline for completing an initial business combination has been extended to April 11, 2025, with the possibility of further monthly extensions[56]. - The company entered into a letter of intent with Semnur for a potential business combination on July 2, 2024[29]. - The Longevity Merger Agreement was terminated on June 26, 2024, leading to the withdrawal of the registration statement initially filed with the SEC[28]. - The Business Combination must meet the Nasdaq requirement of having a total aggregate fair market value of at least 80$40.5 million (approximately $10.92 per share) being removed from the Trust Account[26]. - On July 10, 2024, shareholders redeemed 3,785,992 public shares, leading to approximately$43.4 million (approximately $11.47 per share) being withdrawn from the Trust Account[30]. - Approximately$43.4 million was removed from the Trust Account due to shareholder redemptions, leaving 751,837 public shares outstanding[109]. - Following redemptions, there are 751,837 public shares outstanding[48]. Financial Performance - The Company had a net loss of $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, primarily 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]. - For the year ended December 31, 2024, net cash used in operating activities was $753,296, primarily due to a net loss and changes in current assets and liabilities[124]. - For the year ended December 31, 2024, net cash provided by financing activities was$42,859,628, primarily due to proceeds from the issuance of a promissory note to a related party[128]. Corporate Structure and Governance - The board of directors consists of three members, with directors serving a two-year term[172]. - The audit committee is comprised of independent directors, including Huifeng Chang, Jim Mao, and Kevin Vassily, with Kevin Vassily serving as the Chair[175]. - Lei Huang serves as the Chief Executive Officer and has been with the company since its inception[166]. - You ("Patrick") Sun has served as the Chief Financial Officer since the company's inception and has extensive experience in banking and asset management[168]. - The audit committee is responsible for monitoring the independence of the independent registered public accounting firm and pre-approving all audit services[176]. Risks and Challenges - The company has encountered intense competition from other entities seeking similar business combinations, which may limit its ability to acquire larger target businesses[73]. - The company has no operating history and no revenues, which presents a challenge in evaluating its ability to achieve its business objectives[76]. - Management expressed substantial doubt about the Company's ability to continue as a going concern through April 11, 2025, if a business combination is not consummated[139]. - The company is subject to a potential delisting from Nasdaq if it fails to complete a business combination by April 7, 2025[77]. Compliance and Regulatory Matters - The Company is required to maintain a Minimum Value of Listed Securities (MVLS) of $50 million for continued listing on Nasdaq, with a compliance deadline of August 20, 2024[100]. - The Company has 180 days to regain compliance with Nasdaq Listing Rules, with MVLS needing to close at or above$50 million for ten consecutive business days[102]. - The company is classified as an "emerging growth company" and will maintain this status until it achieves total annual gross revenue of at least $1.235 billion or the market value of its ordinary shares exceeds$700 million[70]. - The company has no approved plan to extend the business combination deadline beyond April 11, 2025[221]. Internal Controls and Audit - Management assessed the effectiveness of internal control over financial reporting as of December 31, 2024, and determined it was effective[158]. - There were no changes in internal control over financial reporting during the quarter ended December 31, 2024, that materially affected its effectiveness[160]. - The audit committee is responsible for the pre-approval of audit and permitted non-audit services performed by the independent auditor[209]. Miscellaneous - The company has not declared or paid any dividends on its ordinary shares and does not anticipate doing so in the foreseeable future[88]. - The company has not encountered any cybersecurity incidents since its IPO and does not consider itself to face significant cybersecurity risk[80]. - The company has no material litigation or governmental proceedings currently pending against it[82]. - The company has no off-balance sheet arrangements as of December 31, 2024, and does not participate in transactions that create variable interest entities[142].