Company: SMNR
Filing Date: 2025-08-12
Form Type: S-4/A
Source: 0001193125-25-178821
Chunk: 46

Company: Semnur Pharmaceuticals, Inc.
Filing Date: 2025-08-12
Form: S-4/A
Chunk 46
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 shares of New Semnur Series A Preferred Stock and New Semnur Common Stock to be issued to Scilex as the holder of Semnur Preferred Stock being collectively referred to herein as the “Preferred Consideration”. See the section titled “ Certain Relationships and Related Party Transactions — Certain Transactions of Semnur — Debt Exchange Agreement and Related Matters” for a discussion of the terms of the Debt Exchange Agreement.

| Q: | Why is Scilex conducting the Business Combination and related transactions? |

| A: | Scilex believes that if Semnur is established as a stand-alone public company, Semnur will be able to raise capital to support its ongoing cash requirements to carry out necessary clinical trials and execute its business plans. |

Scilex’s management believes that Scilex’s current market capitalization, as of July 18, 2025, of approximately $61.6 million does not reflect the intrinsic value of Semnur. As discussed elsewhere in this proxy statement/prospectus, CB Capital, Denali’s financial advisor, has estimated the value of Semnur’s assets to be between $2.001 billion and $2.554 billion. Scilex’s low market capitalization, together with the volatility of its stock price and existing levels of debt, make it difficult for Scilex to attract investors and obtain the financing necessary to develop and commercialize SP-102. Scilex believes that establishing Semnur as a stand-alone company through the Business Combination will highlight its underlying fundamentals and future growth potential. Specifically, Scilex believes SP-102 could potentially benefit from a first-to-market advantage if it can be demonstrated to reduce or delay the need for expensive and potentially risky interventions, such as spinal surgery, while also decreasing the use of opioids. Based on Semnur management’s internal analysis of the results of a study commissioned by Semnur with Syneos Health in 2021 (with respect to the SP-102 market), the U.S. ESI Market for SP-102 is expected to have an average annual market growth rate of 3.6% between 2023 and 2027, with SP-102 potentially experiencing significant utilization after its expected launch in 2027. As a result, Scilex believes that Semnur will be better able to directly attract investors and obtain the financing necessary to develop and commercialize SP-102, without the overhang from Scilex’s debt, stock volatility and low market capitalization. Semnur