Company: SMNR
Filing Date: 2025-08-13
Form Type: 424B3
Source: 0001193125-25-179226
Chunk: 775

Company: Semnur Pharmaceuticals, Inc.
Filing Date: 2025-08-13
Form: 424B3
Chunk 775
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 difference between the previous carrying amount of the hybrid instrument and the fair value of the derivative; therefore, there is no gain or
loss from the initial recognition and measurement of an embedded derivative that is accounted for separately from its host contract.

The ASU 2020-06 “Debt with conversion and other option”, changes the accounting for convertible instruments by reducing the number of accounting models. It requires convertible debt instruments to be accounted
for under

F-51

one of the following three models: embedded derivative, substantial premium, or no proceeds allocated (traditional debt) models. It eliminates the cash conversion and beneficial conversion
feature models, which will likely result in more convertible debt instruments being accounted for as a single unit. The Company has adopted this ASU in January 1, 2024, as a result of these changes, companies are no longer required to
separately account for embedded conversion features solely due to a beneficial conversion or cash settlement provision, unless the feature meets the definition of a derivative under ASC 815 and does not qualify for the equity scope exception.

The conversion feature in convertible promissory notes issued by the Company in for the three month ended March 31, 2025 and for the year ended
December 31, 2024 does not qualify for the derivative treatment. These convertible promissory notes are presented as traditional debt as of March 31, 2025 and December 31, 2024, in the consolidated balance sheets.

Class A Ordinary Shares Subject to Possible Redemption

The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with ASC 480. Class A ordinary shares subject
to mandatory redemption (if any) are classified as a liability instrument and measured at fair value. Conditionally redeemable ordinary shares (including shares that feature redemption rights that are either within the control of the holder or
subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The
Company’s ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and are subject to the occurrence of uncertain future events. Accordingly, as of March 31, 2025 and
December 31, 2024, 751,837 Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, respectively, outside of the shareholders’ deficit section of the Company’s
consolidated balance sheets.

On August