8-K: Denali Capital Acquisition Corp. Faces Nasdaq Delisting Due to Non-Compliance with Listing Rules

Denali Capital Acquisition Corp. receives notice of delisting from Nasdaq due to failure to meet minimum Market Value of Listed Securities, Total Assets, and Public Float requirements.

Summary

• Denali Capital Acquisition Corp. received a delisting notice from Nasdaq on April 2, 2025, because it failed to meet several listing requirements.
• The company did not maintain a minimum Market Value of Listed Securities (MVLS) of $50.0 million.
• It also failed to maintain total assets and total revenue of at least $50.0 million each for the most recently completed fiscal year or two of the three most recently completed fiscal years.
• Additionally, the company did not maintain a minimum of 1,100,000 publicly held shares.
• Unless the company appeals by April 9, 2025, trading of its securities will be suspended on April 11, 2025.
• Following delisting from Nasdaq, the company's securities are expected to commence trading on the OTC market.
• The company anticipates that the delisting will not immediately impact its proposed business combination with Semnur Pharmaceuticals, Inc.
• Denali Capital Acquisition Corp. plans to remain a reporting entity under the Securities Exchange Act of 1934 and continue filing reports with the SEC.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the delisting notice and failure to meet listing requirements, although the company expresses hope for its business combination.

Positives

• The company anticipates that the delisting will not immediately impact its proposed business combination with Semnur Pharmaceuticals, Inc.
• Denali Capital Acquisition Corp. plans to remain a reporting entity under the Securities Exchange Act of 1934 and continue filing reports with the SEC.

Negatives

• Denali Capital Acquisition Corp. received a delisting notice from Nasdaq on April 2, 2025.
• The company failed to meet the minimum Market Value of Listed Securities (MVLS) of $50.0 million.
• The company failed to maintain total assets and total revenue of at least $50.0 million each.
• The company failed to maintain a minimum of 1,100,000 publicly held shares.
• Trading of the company's securities will be suspended on April 11, 2025, if no appeal is made by April 9, 2025.

Risks

• The company faces the risk of delisting from The Nasdaq Global Market.
• There is no assurance that the company will achieve its expectations regarding trading on the OTC market.
• There is no assurance that the delisting will not impact the proposed business combination with Semnur Pharmaceuticals, Inc.

Future Outlook

The company expects its securities to trade on the OTC market after delisting from Nasdaq and anticipates that the delisting will not immediately impact its proposed business combination with Semnur Pharmaceuticals, Inc. The company plans to remain a reporting entity under the Securities Exchange Act of 1934.

Management Comments

• The delisting from Nasdaq and the commencement of trading on the OTC market is not expected to immediately impact the Company's previously announced business combination with Semnur Pharmaceuticals, Inc., a Delaware corporation (Semnur) and a wholly owned subsidiary of Scilex Holding Company, and the Company anticipates that the parties will continue to work towards effectuating completion of that business combination.

Industry Context

Many SPACs (Special Purpose Acquisition Companies) have faced challenges in maintaining listing compliance due to market volatility and difficulty in completing business combinations. This delisting reflects broader pressures on SPACs to demonstrate financial viability and meet listing requirements.

Comparison to Industry Standards

• Other SPACs, such as DiamondPeak Holdings Corp and Mudrick Capital Acquisition Corporation, have faced similar delisting warnings due to MVLS non-compliance.
• The $50 million MVLS requirement is a standard benchmark for Nasdaq-listed companies, and failure to meet this threshold places Denali Capital Acquisition Corp. in the bottom tier of listed entities.

Stakeholder Impact

• Shareholders may experience a decline in the value of their investments due to the delisting.
• The company's reputation may be negatively impacted.
• The company's ability to raise capital in the future may be affected.

Next Steps

• The company must decide whether to appeal the delisting determination by April 9, 2025.
• If no appeal is made, the company's securities will be suspended from trading on Nasdaq on April 11, 2025.
• The company expects its securities to commence trading on the OTC market shortly after delisting.
• The company will continue to work towards completing its business combination with Semnur Pharmaceuticals, Inc.
• The company will continue to file periodic and current reports with the SEC.

Key Dates

Keywords

delisting, Nasdaq, compliance, MVLS, public float, Semnur Pharmaceuticals, business combination, OTC market, Denali Capital Acquisition Corp.