Company: SMNR
Filing Date: 2025-08-15
Form Type: 10-Q
Source: 0001213900-25-077047
Chunk: 40

Company: Semnur Pharmaceuticals, Inc.
Filing Date: 2025-08-15
Form: 10-Q
Item: Part I, Item 1
Chunk 40
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 adjusted for share subdivisions, share capitalizations,
reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days
after an initial Business Combination, or (y) the date on which the Company completes a liquidation, 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 June 30, 2025, 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.

21

Denali Capital Acquisition Corp.

Notes to Unaudited Consolidated Financial Statements

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