Denali Capital Acquisition Corp. Announces Extension of Deadline to Complete Business Combination

Rhea-AI Summary

Denali Capital Acquisition Corp. (NASDAQ: DECA) has announced a one-month extension for completing its business combination, extending the deadline from November 11, 2024, to December 11, 2024. The company has deposited $15,063.74 into its trust account to fund this extension. The deposit was funded through a $180,000 convertible promissory note issued to Scilex Holding Company, with $119,772.04 remaining available for future extensions. The note is interest-free and convertible into DECA's Class A ordinary shares at $10.00 per share upon closing of a business combination.

Positive

• Secured additional time to complete business combination
• Obtained funding through convertible note without immediate cash outlay
• No interest payments required on the convertible note

Negative

• Need for deadline extension suggests potential delays in completing business combination
• Potential future shareholder dilution if note converts to shares
• Additional funding may be needed for future extensions

Insights

Financial Analyst

The $15,063.74 extension funding through a convertible note from Scilex represents a strategic move to buy more time for DECA's business combination efforts. The terms are notably favorable, with zero interest and a $10.00 conversion price, suggesting confidence in the potential deal value. The total note capacity of $180,000 provides runway for up to 12 monthly extensions, indicating careful financial planning. However, repeated extensions often signal difficulties in closing a deal, which could concern investors. The involvement of Scilex as the note provider hints at their potential role in the upcoming business combination, though this remains speculative. SPACs typically have time to complete mergers and extensions can dilute shareholder value through trust account contributions.

NEW YORK, NEW YORK, Nov. 11, 2024 (GLOBE NEWSWIRE) -- Denali Capital Acquisition Corp. (NASDAQ: DECA) (the “Company”) announced today that it has deposited into the Company’s trust account (the “Trust Account”) an aggregate of $15,063.74 to fund the one-month extension from November 11, 2024, to December 11, 2024. This deposit was funded via a convertible promissory note with a principal amount of up to $180,000 issued by the Company to Scilex Holding Company (Nasdaq: SCLX, “Scilex”), which bears no interest and is repayable on the earlier of the effective date of the consummation of the Company’s initial business combination or the date of the liquidation of the Company. Upon the closing of a business combination, the note is convertible, at Scilex’s discretion, into the Company’s Class A ordinary shares at a conversion price of $10.00 per share. Any future drawdowns of the remaining $119,772.04 principal amount available under the convertible promissory note are expected to fund future one-month extensions as necessary to provide additional time for the Company to complete a business combination.

About the Company

Denali Capital Acquisition Corp. is a blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses or entities.

Forward-Looking Statements

This press release includes forward looking statements that involve risks and uncertainties. Forward-looking statements are subject to numerous conditions, risks and changes in circumstances, many of which are beyond the control of the Company, including those set forth in the “Risk Factors” section of the Company’s most recent annual report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

FAQ

What is the new deadline for Denali Capital Acquisition Corp (DECA) to complete its business combination?

The new deadline for DECA to complete its business combination is December 11, 2024, extended from November 11, 2024.

How much did DECA deposit for the November 2024 deadline extension?

DECA deposited $15,063.74 into its trust account for the one-month extension.

What are the terms of DECA's convertible promissory note with Scilex?

The $180,000 convertible promissory note bears no interest, is convertible into Class A ordinary shares at $10.00 per share upon business combination completion, and has $119,772.04 remaining available for future extensions.