Delisted Denali SPAC Nears Crisis as Trust Depleted; Semnur Merger Is Make-or-Break

Snapshot - Denali Capital Acquisition Corp. (NASDAQ: DECAW)

What's happening inside the company
* The SPAC has not commenced operations and is pursuing a business combination with Semnur Pharmaceuticals (Merger Agreement in place; Semnur equity value cited at $2,500,000,000).
* The company was delisted from Nasdaq on April 16, 2025 and now trades on the OTC market; management amended the Merger Agreement to address delisting and extend the combination period (extension through December 11, 2025; Outside Date extended to September 30, 2025 in Amendment No.1).
* Management continues to rely on sponsor/third‑party extension deposits and convertible promissory notes to fund operations and to extend the Trust deadline (Scilex, Sponsor, FutureTech loans and extension deposits recorded).
* The filing discloses substantial doubt about the company's ability to continue as a going concern through December 11, 2025 if a business combination is not completed.

Key balance sheet & cash statistics (as of June 30, 2025 - factual)
* Cash on hand outside the Trust: $126 (down from $16,868 at 12/31/2024).
* Cash and investments held in Trust: $548,318 (vs. $9,021,005 at 12/31/2024).
* Total assets: $562,462 (vs. $9,037,873 at 12/31/2024).
* Total liabilities: $11,156,451 (vs. $10,434,584 at 12/31/2024).
* Shareholders' deficit: $(11,142,307) (vs. $(10,417,716) at 12/31/2024).
* Working capital deficit: $8,254,807 (company states this explicitly).
* Class A ordinary shares subject to possible redemption: 43,739 shares at redemption value $548,318.

Key income statement & cash flow facts (factual)
* Three months ended June 30, 2025: Net loss $385,122; formation & operating costs $374,857; interest expense $28,345; income on Trust account $18,080.
* Six months ended June 30, 2025: Net loss $579,725; formation & operating costs $621,457; interest expense $55,319; income on Trust account $97,051.
* Six months ended June 30, 2024: Net income $713,242 driven by income on Trust account $1,294,042 (shows prior period benefit from larger Trust balance and higher interest/market income).
* Cash withdrawn from Trust in connection with redemptions during six months: $8,617,553 (major driver of Trust depletion).
* Basic & diluted net loss per non‑redeemable ordinary share (Q2 2025): $(0.15); basic and diluted net income per redeemable ordinary share (Q2 2025): $0.02 (reflects two‑class allocation mechanics).

Debt & related-party / financing items (factual)
* Promissory Note - related party (principal reported on balance sheet): $1,590,007 as current promissory note related party balance.
* Promissory Note - others: $1,398,107.
* Accrued interest - related party: $110,237; accrued interest - others: $78,224.
* Outstanding convertible / extension notes: Sponsor Convertible Promissory Note balances include $1,574,970 (Convertible Promissory Note 1) and $15,037 (Convertible Promissory Note 2) outstanding as of June 30, 2025; FutureTech convertible note outstanding $1,275,000 (noted in disclosures).
* Deferred underwriter compensation remains $2,887,500 (payable only if Business Combination closes).

Positive aspects (income statement & corporate)
* The company still has funds in the Trust ($548,318) earmarked for a business combination - not fully depleted.
* Sponsor, Scilex and other counterparties continue to provide extension deposits and promissory funding to keep the SPAC alive and to support the Semnur transaction.
* Semnur deal provides a clear path to an operating company (Merger Agreement in place; ongoing amendments maintain exchange ratio and facilitate pre‑close share issuances).
* Prior period interest/investment income was material (six months 2024: $1,294,042), demonstrating historically meaningful Trust returns when balances were larger.

Negative aspects (income statement & corporate)
* Trust balance has collapsed from $9,021,005 at 12/31/2024 to $548,318 at 6/30/2025 after redemptions - income on Trust is now small ($97,051 for six months 2025).
* Minimal operating cash outside Trust ($126) - immediate liquidity is effectively zero.
* Company records a shareholders' deficit of $(11,142,307) and total liabilities exceed assets by a wide margin (total liabilities $11,156,451 vs. total assets $562,462).
* Ongoing net losses (Q2 2025 net loss $385,122; six months loss $579,725) and recurring formation/transaction expenses weigh on capital.
* Heavy reliance on related‑party and third‑party convertible loans (potential dilution and governance risk); material accrued interest and outstanding promissory note balances.
* Nasdaq delisting reduces access to broader capital markets and likely increases cost/complexity of completing a value‑creating business combination.
* Management discloses substantial doubt about the company's ability to continue as a going concern through December 11, 2025 unless the Business Combination closes or new financing is secured.

What to watch next (near term catalysts & risks)
* Progress and timing of the Denali-Semnur closing (Amendment No.2 on July 22, 2025 adjusted exchange ratio mechanics; closing remains the primary path to value creation).
* Any additional sponsor/third‑party funding or bridge financing (necessary to fund transaction costs and operations).
* Redemption activity and any further withdrawals from the Trust (redemptions have been the main cause of Trust depletion).
* Any appeals or regulatory developments (company already did not appeal Nasdaq delisting - now OTC quoted).
* Potential dilution from conversion of outstanding convertible notes or issuance of additional shares as contemplated in Merger Agreement amendments.

Bottom line: Denali (NASDAQ: DECAW) is a SPAC in a critical window: it has a headline merger with Semnur that could transform the entity, but Trust funds have been mostly consumed by redemptions, cash on hand outside the Trust is nearly zero, liabilities exceed assets, and management flags a going‑concern risk toward the December 11, 2025 deadline. The transaction close or fresh financing are binary outcomes that will determine whether the company survives, dilutes, or liquidates.