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NEW YORK - Denali Capital Acquisition Corp. (NASDAQ: DECA), a blank check company currently trading at $11.98 with a market capitalization of $39.89 million, announced Monday that it has secured a one-month extension to complete its initial business combination by depositing $15,063.74 into its trust account. According to InvestingPro analysis, the company appears overvalued at current levels. This deposit, necessary for the extension from February 11, 2025, to March 11, 2025, was funded by a convertible promissory note from Scilex Holding Company (NASDAQ: SCLX), with a principal amount of up to $180,000.
The note, which carries no interest, is repayable on the earlier of two events: either the effective date when Denali Capital’s initial business combination is consummated or upon the company’s liquidation. If a business combination successfully closes, Scilex has the option to convert the note into Denali Capital’s Class A ordinary shares at a price of $10.00 per share.
Denali Capital may draw down the remaining $74,608.82 principal amount under the convertible promissory note for future one-month extensions if needed. These extensions are designed to provide additional time for Denali to complete a business combination.
Denali Capital Acquisition Corp. was established in the Cayman Islands with the specific purpose of merging with, exchanging shares with, acquiring, or reorganizing assets or shares with one or more businesses or entities.
This financial maneuver comes with inherent risks and uncertainties, as detailed in the "Risk Factors" section of Denali Capital’s most recent annual and quarterly reports filed with the Securities and Exchange Commission. InvestingPro data reveals concerning metrics, including a weak financial health score and a current ratio of 0.01, indicating potential liquidity challenges. Despite these risks, the stock has delivered an impressive 166.67% return over the past year. The company has made it clear that it does not commit to publicly updating any forward-looking statements, which are subject to changes in circumstances and conditions beyond its control. For deeper insights into DECA’s financial health and additional investment signals, InvestingPro subscribers have access to over 30 additional financial metrics and expert analysis.
The information for this report is based on a press release statement.
In other recent news, Denali Capital Acquisition Corp. has successfully secured an extension until January 11, 2025, to finalize a business combination. This development was made possible by depositing $15,063.74 into its trust account, a move supported by a convertible promissory note from Scilex Holding Company, which provided the funds without interest. The note, with a principal amount up to $180,000, is convertible into Class A ordinary shares at $10.00 each upon the closing of a business combination. If not converted, it is repayable either when the business combination is effective or upon the company’s liquidation. Denali Capital may draw down the remaining $104,708.30 from the note to fund future extensions if necessary. These are recent developments and forward-looking statements are subject to risks, uncertainties, and potential changes in circumstances.
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