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Denali Capital Acquisition Corp. *

Denali Capital Acquisition Corp. *

Mar 1, 2022 by Anthony Sozzi

PROPOSED BUSINESS COMBINATION: Semnur Pharmaceuticals, Inc.

ENTERPRISE VALUE: $tbd million
ANTICIPATED SYMBOL: SMNR

Denali Capital Acquisition Corp. proposes to combine with Semnur Pharmaceuticals, Inc.

Semnur Pharmaceuticals, Inc. (“Semnur”) is a clinical-late stage specialty pharmaceutical company focused on the development and commercialization of novel non-opioid pain therapies. Semnur’s lead program, SP-102 (SEMDEXA™), is the first non-opioid novel gel formulation administered epidurally in development for patients with moderate to severe chronic radicular pain/sciatica.

TRANSACTION

  • The transaction implies a pre-transaction equity value of Semnur at $2.5 billion.
  • The closing of the transaction, which is expected to occur by the first quarter of 2025, is subject to the approval of the SPAC’s shareholders, any applicable regulatory approval, and the satisfaction or waiver of certain other closing conditions.
  • Scilex agreed to purchase 500,000 Class B Founder Shares from the Sponsor for:
    • $2,000,000 in Cash
    • 300,000 in Common Stock

SPAC FUNDING

  • There is no additional funding at this time.

LOCK-UP

  • Company
    • Not mentioned.
  • Sponsor
    • From 424B4:
      • One year following the Closing or if the share price equals or exceeds $12.00 for 20/30 trading days at least 150 days after the Closing.

NOTABLE CONDITIONS TO CLOSING

  • A minimum cash closing condition was not mentioned.

NOTABLE CONDITIONS TO TERMINATION

  • By either Denali or Semnur, if the Merger is not consummated by January 31, 2025
  • By Denali if Semnur fails to deliver the audited financial statements for each of its 2022 fiscal year and 2023 fiscal year to Denali on or before September 13, 2024

ADVISORS

  • Company
    • Paul Hastings LLP is serving as legal counsel.
  • SPAC
    • Winston & Strawn LLP is serving as legal counsel.

EXTENSION – 7/10/24 – LINK

  • The extension was approved from July 11, 2024 to April 11, 2025.
    • 3,785,992 shares were redeemed.
    • $0.02/share per month will be deposited into the trust account.

LETTER OF INTENT – 7/2/24 – LINK

  • The SPAC signed a letter of intent with Semnur Pharmaceuticals, Inc.
    • The company has a pre-transaction equity value of Semnur up to $2.0 billion, subject to adjustment based on third-party fairness opinion, with expected gross proceeds of up to $40 million depending on the number of SPAC shares that are redeemed prior to the completion of the business combination.
    • Assuming the SPAC and Semnur enter into the proposed Merger Agreement in the near term, the parties anticipate seeking approval from the SPAC’s shareholders in the second half of 2024.

The below-announced combination was terminated on 6/27/24.  It will remain on the page for reference purposes only. Once a new combination is announced it will be added to the top of the page.

PROPOSED BUSINESS COMBINATION: Longevity Biomedical, Inc. [Terminated]

ENTERPRISE VALUE: $TBD million
ANTICIPATED SYMBOL: LBIO

Denali Capital Acquisition Corp. proposes to combine with Longevity Biomedical, Inc.

Longevity Biomedical is a biopharmaceutical company focused on advancing technologies across therapeutics, health monitoring and digital health solutions to restore tissue form and function in order to increase and improve health span. Longevity’s mission is to become a consolidator and a leading provider of products and services designed to help people live longer, healthier lives. Longevity is acquiring a differentiated therapeutic pipeline of late-stage clinical technologies across ophthalmology, cardiovascular disease and soft tissue reconstruction and repair. Building on this platform, Longevity intends to acquire and/or partner with other health technology companies to become a leading provider of products and services designed to increase and improve health span amongst the rapidly growing aging patient population. Longevity is led by a team of industry experts and scientific advisors with significant experience acquiring, developing and commercializing cutting-edge health technologies. Longevity is headquartered in Bothell, Washington.

SUBSEQUENT EVENT – 11/20/23 – LINK

  • From the subscription agreement entered on August 28, 2023, the number of shares to be purchased by FutureTech Capital LLC was decreased from 1,800,000 to 1,300,000.
    • All other parts of the subscription agreement are unchanged.
  • Denali agreed with Holdco, EF Hutton, US Tiger, and Craig-Hallum Capital Group to receive 86,625 shares of Holdco common stock and $2,021,250 in cash as part of a Deferred Discount Agreement, contingent on closing the Business Combination with Longevity.
  • All minimum cash conditions have been waived.

EXTENSION – 10/11/23 – LINK

  • The extension was approved from October 11, 2023 (the “Termination Date”) to July 11, 2024.
    • 3,712,171 shares were redeemed for $10.92/Share
    • $50K per month will be deposited into the trust account.

SUBSEQUENT EVENT – 8/30/23 – LINK

  • The minimum cash condition of $30M was waived.

SUBSEQUENT EVENT – 8/28/23 – LINK

  • The SPAC has entered into a Subscription Agreement with FutureTech Capital LLC.
  • The agreement entails the purchase of 1,800,000 shares of Series A Convertible Preferred Stock at $10.00 per share.
  • The conversion price will be either $8.00 or a calculation based on the average price of the common stock over a 20-day period, multiplied by 80%.
    • The Conversion Price will not go below $5.00.

EXTENSION – 4/6/23 – LINK

  • The SPAC approved it auto extension from April 11, 2023 to July 11, 2023
    • $825,000 was deposited into the trust account

TRANSACTION

  • The transaction represents a pro forma equity valuation of approximately $236.2 million of the Combined Company, assuming no redemptions of Denali public shares by Denali’s public shareholders.
  • The estimated cash proceeds available to the Combined Company from the transaction consists of Denali’s $85.4 million of cash held in trust.
  • The Combined Company may seek a $30 million pre-transaction PIPE that is expected to close concurrently with the closing of the transaction.
  • The board of directors of each of Denali and Longevity unanimously approved the transaction, which is expected to occur in Q2 2023.

DECA presentation

SPAC FUNDING

  • The Combined Company may seek a $30 million pre-transaction PIPE that is expected to close concurrently with the closing of the transaction.

SPONSOR SUPPORT AGREEMENT

  • Sponsor and FutureTech Capital LLC, controlled by Yuquan Wang, the Chairman of the Board of Company, entered into a Sponsor Membership Interest Purchase Agreement dated November 8, 2022 (the “MIPA”).
    • Investor currently holds notes payable from Company in the aggregate principal amount of $2.45 million that are convertible into approximately 1.6 million of Company Common Stock, and is also an affiliate of a significant group of stockholders of Cerevast Medical, Inc.
    • Pursuant to the MIPA, Investor agreed to purchase 625,000 Class B Units of membership interests in Sponsor for a total purchase price of $5 million, $2 million of which has been paid in exchange for 250,000 Sponsor Membership Units as of the date of the Merger Agreement.
    • Pursuant to the MIPA, Investor has agreed to pay the $3 million balance of the purchase price for the remaining 375,000 Sponsor Membership Units no later than two business days prior to the closing of the Business Combination.
    • Each Sponsor Membership Unit entitles Investor to receive one Class B Share held by Sponsor, each of which will convert into one share of New PubCo Common Stock at the closing of the Business Combination.    Investor also agreed pursuant to the MIPA to pay any extension fees required to extend the time to close the Business Combination and to reimburse Sponsor’s incurred expenses related to the Business Combination if the Business Combination does not close.

LOCK-UP

  • Merger details do not mention a lock-up

NOTABLE CONDITIONS TO CLOSING

  • Additionally, the obligations of (i) Company to consummate the Transactions are also conditioned upon, among others, aggregate unrestricted cash proceeds available, after giving effect to the payment of Denali’s and Company’s expenses, to fund the balance sheet of New PubCo, will be at least $30,000,000
    • The minimum cash condition of $30M was waived. – LINK
    • All minimum cash conditions have been waived. – LINK

NOTABLE CONDITIONS TO TERMINATION

  • By written notice by Company or Denali if any of the conditions to the Closing have not been satisfied or waived by the nine-month anniversary of the date of the Merger Agreement (the “Outside Date”) 10/26/23.

ADVISORS

  • US Tiger Securities, Inc. is acting as business combination advisor to Denali.
  • Sidley Austin LLP is acting as legal advisor to Denali.
  • Nelson Mullins Riley & Scarborough LLP is acting as legal advisor to Longevity.

MANAGEMENT & BOARD

Executive Officers

Lei Huang, 51
Chief Executive Officer and Director

Mr. Huang currently serves as the Chief Executive Officer of US Tiger and is a member of the board of directors of its parent company, UP Fintech Holding Limited (Nasdaq: TIGR) and is Co-Chief Executive Officer of TradeUP Global Corporation (Nasdaq: TUGC), a special purpose acquisition company incorporated in January 2021 and TradeUP 88 Corp. (Nasdaq: TUFU), a special purpose acquisition company incorporated in April 2021 which is currently seeking Nasdaq listing. Mr. Huang also serves as the Chief Executive Officer and is a member of the board of directors of Fortune Rise Acquisition Corporation (Nasdaq: FRLA), a special purpose acquisition company incorporated in January 2021 and TradeUP Securities, a broker/dealer company incorporated in December 2021. Mr. Huang also serves as a member of the board of directors of MDLand International Corporation. Prior to joining US Tiger, Mr. Huang was the Chief Executive Officer of Haitong Securities USA LLC, and also served as Chief Compliance Officer and Operation Manager of CICC US Securities, Inc. from 2010 through 2018. Prior to that, Mr. Huang served as a Compliance Officer at Morgan Stanley, Lehman Brothers and Barclays. Mr. Huang also formerly served as a Regulatory Supervisor at the National Association of Securities Dealers.

You (“Patrick”) Sun, 35
Chief Financial Officer

Mr. Sun is an experienced banking and asset management professional. Since August 2020, Mr. Sun has served as the Chief Financial Officer of Lake Crystal Energy LLC, an oil and gas company. As the Chief Financial Officer, Mr. Sun evaluates and sources potential investments in oil and gas assets. He also oversees all financial functions of the company. Prior to this role, from August 2014 to December 2019, Mr. Sun served as a Vice President and an E&P Analyst of Seaport Global Securities LLC, a full-service investment bank, capital markets advisory and research platform based in New York. From July 2008 to May 2012, Mr. Sun served as Vice President of the Pacific Securities Co., Ltd., a Chinese investment bank and brokerage firm.

Board of Directors

Jim Mao, 54
Independent Director

Mr. Mao is a founding and managing partner of Citta Capital (“Citta”), a firm focused on investing in early growth stage technology startups in Enterprise/SaaS, Blockchain, ESG, AI applications, cloud computing and healthcare technology. As of December 31, 2021, Citta has a diverse portfolio of companies that includes Kintsugi (a leading AI based mental health diagnostics company), Openprise, Inc. (automation solutions), Sequoia Games, Inc. (combining the latest technology with professional sports), SetPoint (clinical stage neuro treatment), Zeit Medical (early heart stroke detection with FDA breakthrough destination), and Ryu Games (Web3.0 Gamify). Prior to that, Mr. Mao was a Partner at WestSummit Capital (“WSC”), a leading global technology growth capital venture firm. At WSC, Mr. Mao led deal sourcing and investment activities in the areas of Enterprise, Cloud, Big Data, AI, robotics, and digital media. WSC was a lead investor of a number of unicorns including Unity, Cloudwise, Twitch, Mirantis, Couchbase, GigaDevice, VeriSilicon and Movidius. Previously, Mr. Mao worked in Internet, mobile/wireless, digital media, telecom, semiconductor and enterprise software industries. He has also co-authored five U.S. patents. He has over 20 years of working experience in private equity and technology sectors, including enterprise software, Internet, mobile applications, digital media, intelligent hardware, advanced manufacturing/materials, medical devices and clean tech. Prior to WSC, Mr. Mao was Managing Director of Cagan McAfee Capital Partners, a leading technology-focused private equity firm based in Silicon Valley, during which Mr. Mao was instrumental in helping portfolio companies raise growth capital, formalize effective business strategy and close large M&A transactions. Previously, Mr. Mao was General Manager of Asia Pacific Development (“APAC”) for Advanced Fibre Communications (acquired by Tellabs), member of the original founding team and General Manager of APAC for Turin Networks (acquired by Dell), and Vice President and General Manager of APAC for Cortina Systems, Inc. (acquired by Inphi Corporation). Mr. Mao has led and participated in numerous successful corporate investments and cross border M&A transactions which have resulted in billions of dollars of value for investors. Mr. Mao is currently also a director of US Digital Mining Corp.

Huifeng Chang, 56
Independent Director

Since May 2016, Dr. Chang has served as Senior Vice President and Chief Financial Officer and, in September 2020, became a member of the board of directors of Canadian Solar Inc. (Nasdaq: CSIQ), a company that manufactures solar PV modules and develops large scale solar projects. He has 24 years of experience in capital markets, financial investment and risk management. From 2010 to 2015, Dr. Chang was the co-head of Sales & Trading at CICC U.S. Securities Inc. Prior to this role, from 2008 to 2010, he was the Chief Executive Officer of China Southern Oriental Patron Asset Management based in Hong Kong, investing funds from China in the international markets. From 2000 to 2008, Dr. Chang was an Equity Proprietary Trader at Citigroup Global Capital Markets Inc. in New York. Before going to New York, Dr. Chang worked at Kamakura Corporation in Hawaii as a derivative and risk modeler. Mr. Chang has also been an independent director of Scienjoy Holding Corporation since May 2020, on the advisory board of Aquamarine Investment Partners Ltd. since 2015 and a partner at Artis Consulting LLC since 2017. Dr. Chang earned a Ph.D. in Soil Physics and an MBA from the University of Hawaii at Manoa. He also earned an M.S. degree from Academia Sinica and a B.S. degree from Nanjing Agricultural University.

Kevin Vassily, 56
Independent Director

Mr. Vassily has extensive working experience as a senior management team member serving private and public companies. In January 2021, he was appointed Chief Financial Officer, and in March 2021, became a member of the board of directors of iPower Inc. (Nasdaq: IPW), a leading online hydroponic equipment retailer and supplier. Mr. Vassily is also a member of the board of directors of Fortune Joy International Acquisition Corporation (Nasdaq: XYGJ), a special purpose acquisition company incorporated in August 2021 which is currently seeking Nasdaq listing. Prior to this role, from 2019 to January 2021, Mr. Vassily served as Vice President of Market Development for Facteus, a financial analytics company focused on the asset management industry. From March 2019 through 2020, he served as an advisor at Woodseer, a financial technology firm providing global dividend forecasts. From 2018 through its acquisition in 2020, Mr. Vassily served as an advisor at Go Capture, where he was responsible for providing strategic, business development, and product development advisory services for the company’s emerging “Data as a Service” platform. Since November 2019, Mr. Vassily has served as a director of Zhongchao Inc., a provider of healthcare information, education and training services to healthcare professionals and the public in China. Since July 2018, Mr. Vassily has also served as an advisor at Prometheus Fund, a Shanghai-based merchant bank & private equity firm focused on the “green” economy. From 2015 through 2018, Mr. Vassily served as an Associate Director of Research at Keybanc Capital Markets, and helped to co-manage the technology research vertical. From 2010 to 2014, he served as the Director of Research at Pacific Epoch, where he was responsible for a complete product overhaul and a complete business model restart post-acquisition, re-focusing the firm around a “data-first” research offering. From 2007 to 2010, he served as the Asia Technology Business Development Representative and as a Senior Analyst at Pacific Crest Securities. In this role, he was responsible for establishing the firm’s presence and relevance covering Asia Technology. From 2003 to 2006, he served as a Senior Research Analyst in the semiconductor technology group at Susquehanna International Group, where he was responsible for research in semiconductor and related technologies. From 2001 to 2003, Mr. Vassily served as a Vice President and Senior Research Analyst for semiconductor capital equipment at Thomas Weisel Partners, where he was responsible for publishing research and maintaining financial models on each of the companies under coverage. Mr. Vassily began his career on Wall Street in 1998 as a Research Associate covering the semiconductor industry at Lehman Brothers.

ByAnthony Sozzi