- Denali Capital Acquisition Corp. (DECA, Financial) shareholders approve extension of the business combination deadline to December 11, 2025.
- The extension, backed by a $180,000 convertible promissory note from Scilex Holding Company (SCLX), facilitates up to eight monthly extensions.
- $0.02 per public share, totaling $874.78, has been deposited into the trust account, reflecting high redemption rates.
Denali Capital Acquisition Corp. (NASDAQ: DECA) announced shareholder approval to extend its deadline for completing an initial business combination from April 11, 2025, to December 11, 2025. The newly approved timeline allows for up to eight additional monthly extensions, providing the company with crucial leeway in a challenging market environment to finalize a business merger.
The extension is supported by a financial arrangement with Scilex Holding Company (SCLX) via a convertible promissory note worth up to $180,000. This note bears no interest and is convertible into DECA’s Class A ordinary shares at a rate of $10.00 per share upon the completion of a business combination. This setup illustrates potential strategic interests by Scilex in the outcome of Denali's future business arrangement.
To facilitate this extension, DECA deposited $874.78, or $0.02 per public share, into its trust account. This nominal contribution suggests a high redemption rate, indicating that approximately 43,739 public shares remain unredeemed. This scenario typically highlights shareholder skepticism regarding the SPAC's ability to execute a value-enhancing merger.
For shareholders remaining after high redemption rates, this extension averts immediate liquidation and grants management the time and flexibility needed through monthly extensions. However, it also points to a potential dilution if the promissory note is converted into shares and continues the uncertainty around the eventual business combination.
