Financial Performance - The company reported a net loss of $152,594,000 for the three months ended September 30, 2025, compared to a net loss of $1,298,000 for the same period in 2024[24]. - The company incurred a net loss of $152.594 million for the three months ended September 30, 2025, compared to a net loss of $1.298 million for the same period in 2024[154]. - The Company will require additional financing through equity offerings, debt financings, or collaborations to support ongoing activities[50]. - The company anticipates continuing to incur net losses into the foreseeable future, raising substantial doubt about its ability to continue as a going concern[200]. - The Company is dependent on Scilex for services and funding until external financing is secured, and anticipates significant expenses and operating losses as it seeks regulatory approval for SP-102[49][50]. Assets and Liabilities - As of September 30, 2025, total assets decreased to $774,000 from $6,684,000 as of December 31, 2024[22]. - Total current liabilities rose significantly to $10,032,000 as of September 30, 2025, compared to $35,000 as of December 31, 2024[22]. - The company had cash and cash equivalents of $0.1 million and an accumulated deficit of $269.6 million as of September 30, 2025[190]. - As of September 30, 2025, the company has promissory notes totaling $4.5 million due within a year and a long-term related party loan of $5.3 million due to Scilex[201]. - As of September 30, 2025, the Company reported cash and cash equivalents of $0.1 million and an accumulated deficit of $269.6 million, with operating losses of $154.3 million for the nine months ended[49]. Research and Development - Research and development expenses increased to $1,143,000 for the three months ended September 30, 2025, up from $233,000 in the same period of 2024[24]. - The Company completed a pivotal Phase 3 study for its lead product candidate SP-102 and initiated a second Phase 3 study in September 2025[32]. - The Company completed a pivotal Phase 3 study for SP-102, which demonstrated significant pain reduction in sciatica patients, with results published in June 2024[161]. - The Company initiated a second Phase 3 study for SP-102 in September 2025, aiming to further validate its efficacy[161]. - Planned operating expenses for the next twelve months are estimated at approximately $21.0 million, including $10.0 million for clinical work[192]. Stock and Financing - The company issued 5,423,606 shares of preferred stock as part of a Debt Exchange Agreement, valued at $54,236,000[27]. - The Company entered into a PIPE SPA on August 20, 2025, for the purchase of 1,250,000 shares of Common Stock at $16.00 per share, totaling $20.0 million, which has not yet closed as of September 30, 2025[42]. - A Semnur/Biconomy SPA was signed on September 23, 2025, for the sale of 6,250,000 shares of Common Stock at $16.00 per share, totaling $100.0 million, payable in Bitcoin, which has also not closed as of September 30, 2025[45]. - The Company expects to receive financing of $20.0 million and $100.0 million from PIPE SPA and Semnur/Biconomy SPA, respectively, if transactions close by December 31, 2025[194]. - The total loans from Scilex Holding Company amounted to $10.314 million for the nine months ended September 30, 2025, compared to $7.582 million in the same period of 2024[150]. Corporate Structure and Governance - The Company completed a business combination with Legacy Semnur on September 22, 2025, resulting in the issuance of 200,000,000 shares of Common Stock at an exchange ratio of 1.25 shares per Legacy Semnur common stock[34][36][37]. - The Business Combination was treated as a reverse recapitalization, with Denali being considered the "acquired" company for financial reporting purposes[40]. - The Sponsor Support Agreement requires the Sponsor and directors to vote in favor of the Merger Agreement and against any actions that would impede the business combination[139]. - Scilex has the right to designate directors to the Board of Directors and to approve certain actions, including amendments to the Certificate of Designations[142]. - Legacy Semnur identified material weaknesses in internal control over financial reporting for the years ended December 31, 2023 and 2022[219]. Legal and Compliance - The Company has no material legal proceedings as of September 30, 2025, indicating a stable legal environment[102]. - The company has identified a material weakness in its disclosure controls and procedures, which were not effective at the reasonable assurance level as of September 30, 2025[218]. - The material weaknesses were related to ineffective control activities in the preparation of carve-out financial statements and stock-based compensation expense[220]. - Remediation measures include a comprehensive assessment of the control environment and the implementation of additional preventive and detective review controls[220]. - External accounting experts will be utilized as appropriate to address the identified weaknesses[220]. Stock-Based Compensation - Stock-based compensation for the nine months ended September 30, 2025, was $140,403,000, compared to $523,000 for the same period in 2024[27]. - Total stock-based compensation recognized includes allocations for shared employees and expenses for grants made to consulting firms[144]. - Total stock-based compensation expense for the three months ended September 30, 2025, was $140.192 million, a decrease from $152 million in the same period of 2024[145]. - The Company accounts for stock-based compensation based on the fair value of the award determined using the Black-Scholes option pricing model[87]. - The holders of Series A Preferred Stock are entitled to a liquidation preference of at least $10.00 per share plus accrued dividends in the event of liquidation[122].
Denali Capital Acquisition Corp.(DECAU) - 2025 Q3 - Quarterly Report