Company: SMNR
Filing Date: 2025-08-15
Form Type: 10-Q
Source: 0001213900-25-077047
Chunk: 41

Company: Semnur Pharmaceuticals, Inc.
Filing Date: 2025-08-15
Form: 10-Q
Item: Part I, Item 1
Chunk 41
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 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 “Scilex Shares”). Pursuant to the SIPA, Scilex has paid
the Cash Consideration on the Signing Date and has agreed to issue the Scilex Shares to the Sponsor contingent upon and following the
occurrence of the Effective Time. The Purchased Interests will convert automatically, on a one-for-one basis, into one New Semnur Common
Share at the effective time of the Domestication pursuant to the terms of the Merger Agreement.

On August 30, 2024, Scilex paid the Cash Consideration
under the SIPA, and on September 3, 2024, the Sponsor transferred 500,000 Class B Ordinary Shares to Scilex. The Company accounted for
the SIPA in accordance with Staff Accounting Bulletin Topic 5T (“SAB Topic 5T”). The Company determined the SIPA represents
a transfer of economic value that benefit to the Company as the SIPA is executed on the closing of the Merger that was contemplates by
the Merger Agreement. According to SAB Topic 5T, if the Sponsor is settling an obligation or expense on behalf of the Company through
a transfer of shares or other consideration, the fair value of the shares transferred less the consideration received would be recognized
as an expense by the Company.

The Company estimated the fair value of the Company’s
500,000 Class B ordinary shares on September 3, 2024 transferred to Scilex by the Sponsor, which was less than the $2,000,000 Cash Consideration
plus the fair value of 300,000 Scilex Shares. The Company determined that the 500,000 Class B ordinary shares were sold at premium and
no expense should be recorded.

Working
Capital Loans

In order to finance transaction costs in connection
with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors, may,
but are not obligated to, provide the Company Working Capital Loans. If the Company completes a Business Combination, it would repay
the Working Capital Loans out of the proceeds of the Trust Account released to the Company.