Company: SMNR
Filing Date: 2025-04-02
Form Type: 10-K
Source: 0001213900-25-027319
Chunk: 215

Company: Semnur Pharmaceuticals, Inc.
Filing Date: 2025-04-02
Form: 10-K
Item: Item 1A
Chunk 215
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merger, share exchange or other similar transaction that results in all Public Shareholders having the right to exchange their Public
Shares for cash, securities or other property. Any permitted transferees would be subject to the same restrictions and other agreements
of the Sponsor and the Company’s directors and executive officers with respect to any founder shares.

The
sale of the founder shares to the Company’s Chief Financial Officer and to certain members of the Company’s board of directors
is in the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based
compensation associated with equity-classified awards is measured at fair value upon the grant date. The fair value of the 130,000 shares
granted to the Company’s directors and executive officers was $1,005,964 or $7.74 per share. The founder shares were
granted subject to a performance condition (i.e., the occurrence of a Business Combination). Compensation expense related to the founder
shares is recognized only when the performance condition is of probable occurrence under the applicable accounting literature in this
circumstance. As of December 31, 2024, the Company determined that a Business Combination is not considered probable until it occurs
and, therefore, no stock-based compensation expense has been recognized. Stock-based compensation would be recognized at the date
a Business Combination is considered probable (i.e., upon consummation of a Business Combination) in an amount equal to the number of
founder shares times the fair value per share at the grant date (unless subsequently modified) less the amount initially received for
the purchase of the founder shares.

In
connection with the execution and delivery of the Merger Agreement, the Sponsor and Scilex entered into a Sponsor Interest Purchase Agreement
(the “SIPA”) dated August 30, 2024 (the “Signing Date”). Pursuant to the SIPA, Scilex agreed to purchase 500,000
Class B ordinary shares, par value $0.0001 per share (the “Purchased Interests”), of the Company that are currently held
by the Sponsor. The aggregate consideration for the purchase and sale of the Purchased Interests is as follows: (i) $2,000,000 (the “Cash
Consideration”) and (ii) 300,000 shares of common stock, par value $0.0001 per share, of Scilex (the “