Denali Capital Acquisition Corp. Reports $194,603 Net Loss and Pursues Merger with Semnur Pharmaceuticals

Denali Capital Acquisition Corp. reported a net loss of $194,603 for the three months ended March 31, 2025, a significant decline from a net income of $264,330 during the same period in 2024. The company's total operating costs for the quarter were $246,600, down from $368,252 in the previous year, primarily due to reduced formation and operating expenses. Interest expenses increased slightly to $26,974 from $21,303 year-over-year. The company generated income of $78,971 from its trust account investments, a decrease from $653,885 in the prior year, reflecting lower interest rates and market conditions.

As of March 31, 2025, Denali's total assets amounted to $9,147,903, a modest increase from $9,037,873 at the end of 2024. The trust account held $9,145,167, primarily in cash, while cash on hand decreased to $2,736 from $16,868. The company’s liabilities rose to $10,739,217, up from $10,434,584, driven by increases in accounts payable and accrued expenses. The shareholders' deficit widened to $10,736,481 from $10,417,716, largely due to the net loss incurred during the quarter.

Denali is currently pursuing a business combination with Semnur Pharmaceuticals, Inc., which is expected to be valued at approximately $2.5 billion. The merger agreement includes provisions for the issuance of shares to Semnur's equity holders and is contingent upon various conditions, including regulatory approvals. The company has extended its deadline to complete the business combination to December 11, 2025, following shareholder approvals and amendments to its articles of association.

Operationally, Denali has faced challenges, including a significant reduction in public shares outstanding due to shareholder redemptions. Following a recent extraordinary general meeting, approximately $8.6 million was removed from the trust account to pay redeeming shareholders, leaving only 43,739 public shares outstanding. The company has also been navigating compliance issues with Nasdaq, resulting in its securities being delisted and subsequently traded on the OTC markets.

Looking ahead, Denali's management has expressed concerns regarding liquidity and the ability to meet operational needs without additional financing. The company has indicated that it may need to curtail operations or seek further capital to support its business combination efforts. The ongoing geopolitical tensions and market conditions may also impact the company's strategic decisions and overall financial health.