Nasdaq moves to delist Denali Capital (now Semnur Pharmaceuticals), the Semnur SPAC

Denali Capital Acquisition Corp., a Cayman Islands blank-check company, reported in a Form 8-K dated April 2, 2025 that Nasdaq staff had determined to delist its securities. The determination followed a notice Denali received on October 2, 2024. Denali's Class A ordinary shares, units and warrants are listed on The Nasdaq Global Market under the symbols DECA, DECAU and DECAW. The company is pursuing a business combination with Semnur Pharmaceuticals, Inc., a wholly owned subsidiary of Scilex Holding Company.

The rules it failed

Nasdaq's market value of listed securities rule, Listing Rule 5450(b)(2)(A), requires at least $50.0 million of market value of listed securities. The total assets rule, Listing Rule 5450(b)(3)(A), requires total assets and total revenue of at least $50.0 million each. The 8-K says that on April 2, 2025 staff found the company had not regained compliance with either. Staff also found it out of compliance with the public float rule, Listing Rule 5450(b)(2)(B), which requires at least 1,100,000 publicly held shares.

The deadline and what happens next

The company had until April 9, 2025 to request an appeal. If it did not, trading in its shares, warrants and units would be suspended at the opening of business on April 11, 2025. A Form 25-NSE would then be filed with the SEC to remove the securities from Nasdaq. The company expects its securities to trade on the over-the-counter market shortly after delisting. The company plans to keep filing reports with the SEC as a reporting entity.

The 8-K says the delisting is not expected to have an immediate impact on the proposed business combination with Semnur, and that the parties will keep working toward completing it. The 8-K carries a caution that there is no assurance the securities will trade on the OTC market as expected or that the delisting will leave the deal unaffected. It is also marked as a written communication under Rule 425.

The trust and the shrinking public float

The company's annual report, filed April 2, 2025, says it completed its initial public offering on April 11, 2022 of 8,250,000 units at $10.00 per unit, including 750,000 units from the partial exercise of the underwriters' over-allotment option, for gross proceeds of $82,500,000. A total of $84,150,000 of the net proceeds and the private placement went into a trust account with Wilmington Trust, National Association.

At the October 11, 2023 extension meeting, shareholders holding 3,712,171 public shares redeemed them, removing about $40.5 million from the trust, or about $10.92 per share. After that, 4,537,829 public shares remained outstanding. The annual report says the company extended its deadline on a monthly basis, up to nine times.

The earlier deal and the new one

The company signed a merger agreement with Longevity Biomedical, Inc. in January 2023. Shareholders approved that business combination on January 9, 2024, but the parties terminated the agreement on June 26, 2024. The company withdrew its Form S-4 registration on August 9, 2024.

On July 2, 2024, the company announced a letter of intent with Semnur, a wholly owned subsidiary of Scilex Holding Company. On July 10, 2024, shareholders approved a second extension, to April 11, 2025, again on a monthly basis. The annual report says the company must complete a business combination by that extended date or cease operations, except for winding up, and redeem 100% of the public shares. Each one-month extension requires the sponsor or its affiliates to deposit into the trust the lesser of $50,000 or $0.03 per public share outstanding.

What the 8-K leaves open

The 8-K does not say whether the company will appeal. It also does not give the terms of the Semnur transaction. The annual report describes the company as a shell company with no operations and nominal assets, consisting almost entirely of cash.

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