Company: SMNR
Filing Date: 2025-05-16
Form Type: 10-Q
Source: 0001213900-25-044889
Chunk: 28

Company: Semnur Pharmaceuticals, Inc.
Filing Date: 2025-05-16
Form: 10-Q
Item: Part I, Item 1
Chunk 28
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Since June 4, 2024, all of the assets held in
the Trust Account have been held solely in cash in an interest-bearing demand deposit account at a bank. Interest on bank deposit accounts
is variable and such accounts currently yield interest of approximately 3.5% per annum.

15

Denali Capital Acquisition Corp.

Notes to Unaudited Consolidated Financial Statements

Fair
Value of Financial Instruments

The fair value of the Company’s assets and
liabilities, which qualify as financial instruments under the FASB ASC 825, “Financial Instruments,” approximates the carrying
amounts represented in the consolidated balance sheet, primarily due to its short-term nature.

Warrants

The Company accounts for warrants as either equity-classified
or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance
in FASB ASC 480 and FASB ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether
the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and meet
all of the requirements for equity classification under FASB ASC 815, including whether the warrants are indexed to the Company’s
own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside
of the Company’s control, among other conditions for equity classification. This assessment is conducted at the time of warrant
issuance and as of each subsequent quarterly period end date while the warrants are outstanding. 

For issued or modified warrants that meet all
of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the
time of issuance. For issued or modified warrants that do not meet all of the criteria for equity classification, the warrants are required
to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. The Company accounts for the 8,250,000 Public
Warrants (as defined in Note 3) and 510,000 Private Placement Warrants (as defined in Note 4) as equity-classified instruments.

Convertible
Debt

The Company issues debt that may have conversion
features.

Convertible debt – derivative treatment –
When the Company issues debt with a conversion feature, the Company must first assess whether the embedded equity-linked component is
clearly and closely related to its host instruments