Denali Capital Acquisition Corp. Reports $167K Net Loss and Pursues Merger with Semnur Pharmaceuticals

Denali Capital Acquisition Corp. reported a net loss of $167,306 for the fiscal year ending December 31, 2024, a significant decline from a net income of $632,536 in the previous year. The company's total revenue remained non-operational as it has not yet completed a business combination, which is its primary objective. Formation and operating costs decreased to $1,649,106 from $3,173,826 in 2023, reflecting a reduction in expenses associated with its ongoing organizational activities. The company also reported an increase in interest expense, which rose to $96,242 from $36,909 in the prior year.

In terms of operational metrics, Denali's weighted average redeemable ordinary shares outstanding decreased to 2,722,627 from 7,416,033, while the basic and diluted net income per redeemable ordinary share increased to $0.32 from $0.26. The company’s accumulated deficit grew to $(10,417,973) as of December 31, 2024, compared to $(8,282,297) at the end of 2023. The reduction in shares outstanding is attributed to shareholder redemptions, with approximately $43.4 million removed from the Trust Account during the year.

Strategically, Denali is in the process of pursuing a merger with Semnur Pharmaceuticals, Inc., which is expected to significantly impact its future operations. The merger agreement, signed on August 30, 2024, outlines a total consideration of $2.5 billion, payable in shares of the new entity post-merger. This agreement follows the termination of a previous merger agreement with Longevity Biomedical, Inc. in June 2024. The company has also extended the deadline for completing its business combination to July 11, 2024, with provisions for further extensions.

As of December 31, 2024, Denali had $9,021,005 held in its Trust Account, all in cash, reflecting a shift from previous investments in U.S. government securities. The company’s cash balance outside the Trust Account was $16,868, indicating limited liquidity. Denali's management has expressed concerns regarding its ability to meet working capital needs and has indicated that it may require additional financing to support its operations and complete the business combination. The company is actively monitoring its compliance with Nasdaq listing requirements, having previously received notifications regarding deficiencies in its market value and total assets.

Looking ahead, Denali's management remains focused on finalizing the merger with Semnur and is exploring options to enhance its financial position. The company has acknowledged the uncertainty surrounding its ability to continue as a going concern if it fails to complete the business combination by the extended deadline. The ongoing geopolitical tensions and economic conditions may also pose risks to its operational and financial performance.