Company: SMNR
Filing Date: 2025-04-02
Form Type: 10-K
Source: 0001213900-25-027319
Chunk: 438

Company: Semnur Pharmaceuticals, Inc.
Filing Date: 2025-04-02
Form: 10-K
Item: Item 1C
Chunk 438
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1,932,500 founder
shares.

The
founder shares are identical to the Class A ordinary shares included in the units sold in the IPO, except that the founder shares will
automatically convert into Class A ordinary shares at the time of the Company’s initial Business Combination (see Note 7). Also,
the Sponsor and each member of the Company’s management team have entered into an agreement with the Company, pursuant
to which they have agreed to waive their redemption rights with respect to any founder shares and Public Shares held by them.

The
Sponsor and the Company’s directors and executive officers have agreed not to transfer, assign or sell any of their founder shares
until the earlier of (A) one year after the completion of an initial Business Combination and (B) subsequent to the Company’s
initial Business Combination, (x) if the closing price of Class A ordinary shares equals or exceeds $12.00 per share (as 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 December 31, 2024,