Company: SMNR
Filing Date: 2025-07-23
Form Type: S-4/A
Source: 0001193125-25-163401
Chunk: 588

Company: Semnur Pharmaceuticals, Inc.
Filing Date: 2025-07-23
Form: S-4/A
Chunk 588
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 were deemed to be incremental and directly related to the Business Combination and are reflected as equity issuance costs, reducing New Semnur’s additional paid-in capital balances. |

357

| (2) | Represents compensation expense associated with certain options to purchase Semnur Common Stock which were granted on August 30, 2024 and will be exchanged into options to purchase New Semnur Common Stock pursuant to the terms of the Merger Agreement (if the Option Exchange Proposal is approved by Denali’s shareholders). The awards vest monthly over a 4-year term. The exercisability of the options is contingent on the approval of the Option Exchange Proposal and the unaudited pro forma condensed combined statement of operations reflects the expense to be recognized subsequent to such approval. As a result of the options containing an “other” exercisability condition, the expense for the options is recognized on a tranche-by-tranche basis with the expense attributable to each tranche recognized over the time-based vesting period of such tranche in these pro forma financial statements. The exercisability of the options is also contingent on Scilex’s repayment of certain indebtedness owed by Scilex. Because such exercise contingency is not a service, a performance or a market condition, the options are initially expected to be liability-classified awards and subject to be remeasured at fair value in subsequent periods pursuant to guidance in ASC Topic 718. Once the exercise condition relating to repayment of certain Scilex indebtedness owed by Scilex is met, the options are expected to be classified from liability-classified awards to equity-classified awards as the exercisability of the options is no longer contingent on achievement of this condition. The expense reflected in the unaudited pro forma condensed combined statement of operations is based on the assumed fair value of the options as if the Business Combination had occurred on January 1, 2024 and the awards were measured at fair value on such date. The fair value of the options was measured using the Black-Scholes option pricing model. The fair value measurement assumes that the per share fair value of New Semnur Common Stock is $10.00 and incorporates certain other assumptions, such as the volatility of the underlying shares and the expected term of the options. The expense to be recognized by New Semnur will depend on various factors, including the fair value of the New Semnur Common Stock and volatility thereof. Additionally, the timing of when the exercise contingency relating to payment of certain Scilex indebtedness is met may