Company: SMNR
Filing Date: 2025-05-16
Form Type: 10-Q
Source: 0001213900-25-044889
Chunk: 30

Company: Semnur Pharmaceuticals, Inc.
Filing Date: 2025-05-16
Form: 10-Q
Item: Part I, Item 1
Chunk 30
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 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.

16

Denali Capital Acquisition Corp.

Notes to Unaudited Consolidated Financial Statements

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 16, 2022, the Inflation Reduction Act
of 2022 (the “IR Act”) was signed into U.S. federal law. Among other provisions, the IR Act imposes a new 1% U.S. federal
excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly
traded foreign corporations, effective for transactions occurring on or after January 1, 2023. Since the Company is incorporated in the
Cayman Islands and is neither a U.S. domestic corporation nor a U.S. domestic subsidiary of a publicly traded foreign corporation, it
is exempt from the 1% U.S. federal excise tax on stock repurchases.

The Company recognizes changes in redemption value
immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each
reporting period. Increases or decreases in the carrying amount of