Denali Capital Acquisition Corp. Announces Shareholder Approval of Extension of Deadline to Complete Business Combination

Rhea-AI Summary

Denali Capital Acquisition Corp. (NASDAQ:DECA) shareholders have approved an extension to complete their initial business combination, moving the deadline from April 11, 2025, to December 11, 2025. The extension allows for up to eight monthly extensions.

The company deposited $874.78 ($0.02 per public share) into its trust account, funded through a convertible promissory note from Scilex Holding Company (SCLX). The note has a principal amount of up to $180,000, bears no interest, and is convertible into DECA Class A ordinary shares at $10.00 per share upon business combination completion.

Positive

• Shareholders approved extension providing more time to complete business combination
• Secured funding for extension through convertible note without immediate cash outlay
• No interest bearing on the convertible promissory note

Negative

• Need for deadline extension suggests challenges in completing business combination
• Potential dilution for shareholders if promissory note converts to shares
• Additional funding needed for future monthly extensions

Insights

SPAC Analyst

Denali Capital's deadline extension represents a critical juncture for this SPAC. The approved eight-month extension to December 2025 provides essential breathing room in what has been a challenging de-SPAC environment, allowing management additional time to identify and complete a suitable business combination.

The extension mechanism requiring monthly deposits of $0.02 per share is standard practice for SPACs seeking additional time. What's particularly noteworthy is the funding arrangement with Scilex Holding Company via a convertible promissory note of up to $180,000. This relationship goes beyond mere financing - Scilex's willingness to provide capital with potential conversion rights at $10.00 per share suggests they may have strategic interest in Denali's eventual business combination target.

The minimal trust contribution amount of $874.78 is revealing - it indicates only approximately 43,739 public shares remain unredeemed. This high redemption rate typically signals significant shareholder skepticism about the SPAC's prospects of completing a value-creating deal.

For remaining shareholders, this extension prevents immediate liquidation while providing management with flexibility through the monthly extension mechanism. However, it also prolongs the opportunity cost of capital being locked in the trust and creates continued uncertainty around the eventual business combination outcome.

NEW YORK, NEW YORK, April 14, 2025 (GLOBE NEWSWIRE) -- Denali Capital Acquisition Corp. (NASDAQ:DECA) (the "Company") announced today that on April 11, 2025, the Company's shareholders voted in favor of approving amendments to the Company's amended and restated memorandum and articles of association (the "Articles") to extend the date by which the Company must consummate an initial business combination from April 11, 2025 to December 11, 2025 by electing to extend the date to consummate an initial business combination on a monthly basis for up to eight times by an additional one month each time (the "Extension").

The Company also announced today that on April 11, 2025, the Company deposited into the Company's trust account (the “Trust Account”) $874.78, representing the $0.02 per public share issued and outstanding that were not delivered for redemption in connection with the extraordinary general meeting. This deposit was funded via the Company’s existing convertible promissory note with a principal amount of up to $180,000 issued by the Company to Scilex Holding Company (Nasdaq: SCLX, “Scilex”), which bears no interest and is repayable on the earlier of the effective date of the consummation of the Company’s initial business combination or the date of the liquidation of the Company. Upon the closing of a business combination, the note is convertible, at Scilex’s discretion, into the Company’s Class A ordinary shares at a conversion price of $10.00 per share. Any future drawdowns of the remaining $ principal amount available under the convertible promissory note are expected to fund future one-month extensions as necessary to provide additional time for the Company to complete a business combination.

A Current Report on Form 8-K disclosing the full voting results will be filed with the U.S. Securities and Exchange Commission (the “SEC”).

About the Company
Denali Capital Acquisition Corp. is a blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses or entities.

Participants in the Solicitation
The Company, its directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies from the Company's shareholders in respect of the Extension. Information regarding the Company's directors and executive officers is available in its Annual Report on Form 10-K filed with the SEC. Additional information regarding the persons who may, under the rules of the SEC, be deemed participants in the proxy solicitation and a description of their direct and indirect interests are contained in the definitive proxy statement relating to the Shareholder Meeting (the "Definitive Proxy Statement").

No Offer or Solicitation
This communication shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities. This communication shall also not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any states or jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, or an exemption therefrom.

Additional Information and Where to Find it
On March 27, 2025, the company filed the Definitive Proxy Statement with the SEC in connection with its solicitation of proxies for the Shareholder Meeting. INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND OTHER DOCUMENTS THE COMPANY FILES WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders will be able to obtain free copies of the Definitive Proxy Statement (including any amendments or supplements thereto) and other documents filed with the SEC through the web site maintained by the SEC at www.sec.gov or by directing a request to the Company's proxy solicitor, Advantage Proxy, Inc., at P.O. Box 10904 Yakima, WA 98909, Toll-Free (877) 870-8565 or Collect (206) 870-8565, Email: ksmith@advantageproxy.com

Forward-Looking Statements
This press release includes forward looking statements that involve risks and uncertainties. Forward-looking statements are subject to numerous conditions, risks and changes in circumstances, many of which are beyond the control of the Company, including those set forth in the "Risk Factors" section of the Company's most recent annual report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

Contact Info: 646-978-3133

FAQ

What is the new deadline for Denali Capital Acquisition Corp (DECA) to complete its business combination?

The new deadline is December 11, 2025, extended from April 11, 2025, with the possibility of up to eight monthly extensions.

How much did DECA deposit per share for the extension approval?

DECA deposited $0.02 per public share, totaling $874.78 into the trust account.

What are the terms of DECA's convertible promissory note with Scilex?

The note has a $180,000 principal amount, bears no interest, and is convertible to Class A shares at $10.00 per share upon business combination completion.

How will DECA fund future monthly extensions?

Future extensions will be funded through remaining drawdowns from the $180,000 convertible promissory note from Scilex.