| ORGANIZATION AND BUSINESS OPERATION | NOTE 1 – ORGANIZATION AND BUSINESS OPERATION Denali Capital Acquisition Corp. (the “Company”)
is a newly organized blank check company incorporated in the Cayman Islands on January 5, 2022. The Company was formed for the purpose
of effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or
more businesses (a “Business Combination”). As of June 30, 2023, the Company had not commenced
any operations. All activity for the period from January 5, 2022 (inception) through June 30, 2023, relates to the Company’s organizational
activities, those necessary to prepare for and complete the initial public offering (“IPO”), identifying a target company
for a business combination, and activities in connection with the proposed Longevity Business Combination. The Company does not expect
to generate any operating revenues until after the completion of an initial Business Combination. The Company is generating non-operating
income in the form of income from the investment of proceeds derived from the IPO. The Company has selected December 31 as its fiscal
year end. The Company’s sponsor is Denali Capital
Global Investments LLC, a Cayman Islands limited liability company (the “Sponsor”). Financing The registration statement for the Company’s
IPO became effective on April 6, 2022. On April 11, 2022, the Company consummated the IPO of 8,250,000 units (including over-allotment
of 750,000 units) (“Public Units”). Each Public Unit consists of one Class A ordinary share, $0.0001 par value per share (such
shares included in the Public Units, the “Public Shares”), and one redeemable warrant (the “Public Warrants”),
each whole Public Warrant entitling the holder thereof to purchase one Public Share at an exercise price of $11.50 per share. The Public
Units were sold at a price of $10.00 per Public Unit, generating gross proceeds of $82,500,000, which is described in Note 3. Simultaneously
with the closing of the IPO, the Company consummated the sale of 510,000 units (including over-allotment of 30,000 units) (the “Private
Placement Units”) to the Sponsor at a price of $10.00 per Private Placement Unit in a private placement generating gross proceeds
of $5,100,000, which is described in Note 4. Transaction costs amounted to $5,105,315, consisting of $1,650,000 of underwriting fees,
$2,887,500 of deferred underwriters’ fees and $567,815 of other offering costs, and were all initially charged to shareholders’
equity. Trust Account Following the consummation of the IPO on April
11, 2022, a total of $84,150,000 of the net proceeds from the IPO and the sale of the Private Placement Units was deposited in a
trust account (the “Trust Account”). The net proceeds were invested in U.S. government securities, within the meaning set
forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity
of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund and meeting certain conditions
under Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of (i) the completion of a Business Combination
or (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below. Further, on April 12, 2023, the Company issued a press release announcing that it deposited $825,000 into the
Trust Account, 50% of this amount being a loan from the Sponsor in the form of a convertible promissory note and other 50% amount was
transferred directly from the remaining cash on hand balance at that time, in order to extend the period of time it has to consummate
a business combination by an additional three months, from then current deadline of April 11, 2023 to July 11, 2023. The Company’s management has broad discretion with respect to
the specific application of the net proceeds of the IPO and the sale of the Private Placement Units, although substantially all of the
net proceeds are intended to be applied generally toward consummating a Business Combination. The stock exchange listing rules require
that the Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of
the value of the assets held in the Trust Account (excluding any deferred underwriters’ fees and taxes payable on the interest income
earned on the Trust Account). The Company will only complete a Business Combination if the post-Business Combination company owns or acquires
50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business
sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that
the Company will be able to successfully effect a Business Combination. Business Combination The Company will provide the holders of the outstanding
Public Shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Public Shares either (i)
in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer in connection with
the Business Combination. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a
tender offer will be made by the Company. The Public Shareholders will be entitled to redeem their Public Shares for a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation
of the initial Business Combination (initially anticipated to be $10.20 per Public Unit, plus any pro rata interest then in the Trust
Account, net of taxes payable). The Public Shares subject to redemption were recorded at a redemption value and classified as temporary
equity upon the completion of the IPO in accordance with the Financial Accounting Standards Board (the “FASB”) Accounting
Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”).
The Company will not redeem Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001 (so that it
does not then become subject to the “penny stock” rules of the Securities and Exchange Commission (the “SEC”))
either prior to or upon consummation of an initial Business Combination. However, a greater net tangible asset or cash requirement may
be contained in the agreement relating to the Business Combination. The Company initially had until April 11, 2023, 12 months from the
closing of the IPO to complete the initial Business Combination (the “Combination Period”). However, on April 11, 2023, and
then further on July 11, 2023, the Company extended the Combination Period by an additional three months each, from the deadline
of April 11, 2023 to October 11, 2023 (refer to Note 9). If the Company is unable to complete the initial Business Combination within
the Combination Period, 18 months from the closing of the IPO, the Company will: (i) cease all operations except for the purpose of winding
up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the
Trust Account and not previously released to the Company to pay the Company’s franchise and income taxes, if any (less up to $100,000
of interest to pay dissolution expenses), divided by the number of then-issued and outstanding Public Shares, which redemption will completely
extinguish Public Shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any),
subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s
remaining shareholders and its board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under
Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights
or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete
the Business Combination within the Combination Period. The founder shares are designated as Class B ordinary
shares (the “founder shares”) and, except as described below, are identical to the Public Shares, and holders of founder shares
have the same shareholder rights as Public Shareholders, except that (i) prior to the Company’s initial Business Combination, only
holders of the founder shares have the right to vote on the appointment of directors, including in connection with the completion of the
Company’s initial Business Combination, and holders of a majority of the founder shares may remove a member of the board of directors
for any reason, (ii) the founder shares are subject to certain transfer restrictions, as described in more detail below, (iii) the Company’s
initial shareholders have entered into an agreement with the Company, pursuant to which they have agreed to (A) waive their redemption
rights with respect to their founder shares and Public Shares in connection with the completion of the Company’s initial Business
Combination, (B) waive their redemption rights with respect to their founder shares and Public Shares in connection with a shareholder
vote to approve an amendment to the Company’s amended and restated memorandum and articles of association that would affect the
substance or timing of the Company’s obligation to provide for the redemption of the Company’s Public Shares in connection
with an initial Business Combination or to redeem 100% of the Company’s Public Shares if the Company has not consummated an initial
Business Combination by October 11, 2023, 18 months from the closing of the IPO (refer to Note 9) and (C) waive their rights to liquidating
distributions from the Trust Account with respect to their founder shares if the Company fails to complete its initial Business Combination
by October 11, 2023, 18 months from the closing of the IPO (refer to Note 9), although they will be entitled to liquidating distributions
from the Trust Account with respect to any Public Shares they hold if the Company fails to complete its initial Business Combination within
the prescribed time frame, (iv) the founder shares will automatically convert into Public Shares concurrently with or immediately following
the consummation of the Company’s initial Business Combination, or earlier at the option of the holder thereof, and (v) the founder
shares are entitled to registration rights. If the Company submits its initial Business Combination to its Public Shareholders for a vote,
the Sponsor and each member of the Company’s management team have agreed to vote their Founder Shares and Public Shares in favor
of the Company’s initial Business Combination. The Sponsor has agreed that it will be liable
to the Company if and to the extent any claims by a third party (other than the Company’s registered public accounting firm) for
services rendered or products sold to the Company, or by a prospective target business with which the Company has discussed entering into
a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.20 per Public Share or (ii) the
actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.20 per
Public Share due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes.
This liability will not apply with respect to any claims by a third party or prospective target business who executed a waiver of any
and all rights to seek access to the Trust Account, nor will it apply to any claims under the Company’s indemnity of the underwriters
of the IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended, (the “Securities Act”).
Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Company’s Sponsor will
not be responsible to the extent of any liability for such third party claims. On January 25, 2023, the Company entered into
an Agreement and Plan of Merger (the “Merger Agreement”), by and among Longevity Biomedical, Inc., a Delaware corporation
(“Longevity”), Denali SPAC Holdco, Inc., a Delaware corporation and direct, wholly owned subsidiary of the Company (“New
PubCo”), Denali SPAC Merger Sub, Inc., a Delaware corporation and direct, wholly owned subsidiary of New PubCo (“Denali Merger
Sub”), Longevity Merger Sub, Inc., a Delaware corporation and direct, wholly owned subsidiary of New PubCo (“Longevity Merger
Sub”), and Bradford A. Zakes, solely in the capacity as seller representative (the “Seller Representative”). Pursuant to the Merger Agreement, the parties
thereto will enter into a business combination transaction (the “Longevity Business Combination” and, together with the other
transactions contemplated by the Merger Agreement, the “Transactions”), pursuant to which, among other things, immediately
following the consummation of the acquisitions by Longevity of each of Cerevast Medical, Inc., Aegeria Soft Tissue LLC, and Novokera LLC,
(i) Denali Merger Sub will merge with and into the Company (the “Denali Merger”), with the Company as the surviving entity
of the Denali Merger, and (ii) Longevity Merger Sub will merge with and into Longevity (the “Longevity Merger”), with Longevity
as the surviving company of the Longevity Merger. Following the Mergers, each of Longevity and the Company will be a subsidiary of New
PubCo, and New PubCo will become a publicly traded company. At the closing of the Transactions (the “Closing”), New PubCo
will change its name to Longevity Biomedical, Inc., and its common stock is expected to list on the Nasdaq Capital Market under the ticker
symbol “LBIO.” The consummation of the proposed Longevity Business Combination is
subject to certain conditions as further described in the Merger Agreement. Although there is no assurance that the Company
will be able to successfully effect a Business Combination, the Business Combination is expected to be consummated after the required
approval by the shareholders of the Company and the satisfaction of certain other conditions. In connection with the execution of the Merger
Agreement, the sole stockholder of Longevity (the “Voting Stockholder”) has entered into a Voting and Support Agreement (the
“Longevity Support Agreement”), pursuant to which the Voting Stockholder has agreed to, among other things, (i) vote in favor
of the Merger Agreement and the transactions contemplated thereby and (ii) be bound by certain other covenants and agreements related
to the Transactions. The Voting Stockholder holds sufficient shares of Longevity to cause the approval of the Transactions on behalf of
Longevity. In connection with the execution of the Merger
Agreement, the Company, Longevity and the Sponsor have entered into a Voting and Support Agreement (the “Sponsor Support Agreement”).
The Sponsor Support Agreement provides that the Sponsor agrees (i) to vote in favor of the proposed transactions contemplated by the Merger
Agreement, (ii) to appear at the purchaser special meeting for purposes of constituting a quorum, (iii) to vote against any proposals
that would materially impede the proposed transactions contemplated by the Merger Agreement, (iv) to not redeem any of the Company’s
ordinary shares held by it that may be redeemed, and (v) to waive any adjustment to the conversion ratio set forth in the Company’s
amended and restated memorandum and articles of association with respect to the Class B ordinary shares of the Company held by the Sponsor,
in each case, on the terms and subject to the conditions set forth in the Sponsor Support Agreement. In support of the Transactions, the Sponsor and
FutureTech Capital LLC, a Delaware limited liability company and an entity controlled by Yuquan Wang, the Chairman of the Board of Longevity
(“FutureTech”), entered into a Sponsor Membership Interest Purchase Agreement dated November 8, 2022 (the “MIPA”). FutureTech
currently holds notes payable from Longevity that are convertible into shares of Longevity common stock, and is also an affiliate of a
significant group of stockholders of Cerevast Medical, Inc. Pursuant to the MIPA, FutureTech agreed to purchase 625,000 Class B units
of membership interests in the Sponsor (“Sponsor Membership Units”) for a total purchase price of $5 million, $2 million of
which had been paid in exchange for 250,000 Sponsor Membership Units as of the date of the Merger Agreement. Pursuant to the
MIPA, FutureTech has agreed to pay the $3 million balance of the purchase price for the remaining 375,000 Sponsor Membership Units
no later than two business days prior to the closing of the Longevity Business Combination. Each Sponsor Membership Unit
entitles FutureTech to receive one Class B ordinary share held by the Sponsor, each of which will convert into one share of New PubCo
common stock at the closing of the Longevity Business Combination. FutureTech also agreed pursuant to the MIPA to pay any extension
fees required to extend the time to close the Longevity Business Combination and to reimburse the Sponsor’s incurred expenses
related to the Longevity Business Combination if the Longevity Business Combination does not close.
On January 26, 2023, the Company filed a Form
8-K/A with the SEC to report the Merger Agreement and other legal agreements relating to the Longevity Business Combination. On March 29, 2023, Denali SPAC HoldCo, Inc. filed
a Form S-4 with the SEC to register shares of its common stock that will be issued in connection with the business combination contemplated
by the Merger Agreement. On April 11, 2023, the parties to the Merger Agreement
and the Sponsor entered into an Amendment to and Consent under the Merger Agreement (the “Amendment”). The Amendment provides
for the consent from the Company and the Seller Representative to the execution and issuance of the Convertible Promissory Note (as defined
below) by the Company and amends the Merger Agreement to provide that the repayment of such Convertible Promissory Note by the Company
at the closing of the business combination will not be given effect when calculating the Minimum Cash Amount (as defined in the Merger
Agreement) for purposes of the minimum cash closing condition. On April 11, 2023, the Company issued a convertible
promissory note (the “Convertible Promissory Note”) in the total principal amount of up to $825,000 to the Sponsor. The Convertible
Promissory Note was issued with an initial principal balance of $412,500, with the remaining $412,500 drawable at the Company’s
request prior to the maturity of the Convertible Promissory Note. The Convertible Promissory Note bears an interest equivalent to the
lowest short-term Applicable Federal Rate, and matures upon the earlier of (i) the closing of the Company’s initial business combination
and (ii) the date of the liquidation of the Company. At the option of the Sponsor, upon consummation of a business combination, the Convertible
Promissory Note may be converted in whole or in part into additional Class A ordinary shares of the Company, at a conversion price of
$10 per ordinary share (the “Conversion Shares”). The terms of the Conversion Shares will be identical to those of the private
placement shares issuable upon conversion of the Private Placement Units that were issued to the Sponsor in connection with the IPO (the
“Private Placement Shares”). In the event that we do not consummate a business combination, the Convertible Promissory Note
will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven. On April 12, 2023, the Company issued a
press release announcing that it deposited $825,000 into the Trust Account, 50% of this amount being a loan from the
Sponsor in the form of a convertible promissory note and other 50% amount was transferred directly from the remaining cash on hand balance at that time, in order to extend the period of time it has to consummate a business
combination by an additional three months, from the then current deadline of April 11, 2023 to July 11, 2023. On May 31, 2023, Denali SPAC HoldCo, Inc. filed
an amendment to Form S-4 with the SEC to register shares of its common stock that will be issued in connection with the business combination
contemplated by the Merger Agreement. On July 11, 2023, the Company issued a convertible
promissory note (the “FutureTech Convertible Promissory Note”) in the total principal amount of $825,000 to FutureTech. The
FutureTech Convertible Promissory Note bears an interest equivalent to the lowest short-term Applicable Federal Rate and matures upon
the earlier of (i) the closing of the Company’s initial business combination and (ii) the date of the liquidation of the Company.
At the option of FutureTech, upon consummation of a business combination, the FutureTech Convertible Promissory Note may be converted
in whole or in part into Conversion Shares. The terms of the Conversion Shares will be identical to those of the Private Placement Shares.
In the event that the Company does not consummate a business combination, the FutureTech Convertible Promissory Note will be repaid only
from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven. On July 13, 2023, the Company issued a press
release announcing that an aggregate of $825,000 had been deposited into the Company’s Trust Account, this amount being a loan from the FutureTech Convertible Promissory
Note issued on July 11, 2023, in order to extend the period of time it has to
consummate a business combination by an additional three months, from then current deadline of July 11, 2023 to October 11, 2023
(the “Extension”). On July 13, 2023, Denali SPAC HoldCo, Inc. filed
another amendment to Form S-4 with the SEC to register shares of its common stock that will be issued in connection with the business
combination contemplated by the Merger Agreement. On July 18, 2023, the Sponsor lent another $80,000
to the Company, resulting in the principal amount of the Convertible Promissory Note being increased to $492,500 and the available borrowing
capacity being reduced to $332,500. Liquidity, Capital Resources and Going Concern
Consideration The Company’s liquidity needs prior to the
consummation of the IPO had been satisfied through a payment from the Sponsor of $25,000 (see Note 5) for the founder shares and the loan
under an unsecured promissory note (the “Promissory Note”) from the Sponsor of up to $400,000 (see Note 5) which was fully
repaid on April 12, 2022. Subsequent to the consummation of the IPO and sale of the Private Placement Units on April 11, 2022, a total
of $84,150,000 was placed in the Trust Account, and the Company had $1,515,795 of cash held outside of the Trust Account, after
payment of costs related to the IPO, and available for working capital purposes. In connection with the IPO, the Company incurred $5,105,315
in transaction costs, consisting of $1,650,000 of underwriting fees, $2,887,500 of deferred underwriting fees and $567,815 of other offering
costs. As of June 30, 2023, the Company had marketable
securities held in the Trust Account of $88,135,105. The Company intends to use substantially all of the funds held in the Trust Account,
including any amounts representing interest earned on the Trust Account (less income taxes payable), to complete the Business Combination.
To the extent that the Company’s share capital or debt is used, in whole or in part, as consideration to complete a Business Combination,
the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses,
make other acquisitions and pursue the Company’s growth strategies. As of June 30, 2023, the Company had cash of $9,125
outside of the Trust Account. If the Company does not complete the Longevity Business Combination, it intends to use the funds held outside
the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses,
travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review
corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination. As described above, on January 25, 2023, the Company
entered into a Merger Agreement, by and among Longevity, New PubCo, Denali Merger Sub, Longevity Merger Sub, and the Seller Representative. As of June 30, 2023, the Company had a working deficit of $3,698,702. In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). If the Company completes the initial Business Combination, it would repay such loaned amounts without interest, or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into units of the post Business Combination entity at a price of $10.00 per unit. The units would be identical to the Private Placement Units. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside of the Trust Account to repay such loaned amounts, but no proceeds from the Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into units of the post-business combination entity, at a price of $10.00 per unit at the option of the lender. The units would be identical to the Private Placement Units. On April 11, 2023, the Company issued the Convertible Promissory Note in the total principal amount of up to $825,000 to the Sponsor. The Convertible Promissory Note was issued with an initial principal balance of $412,500, with the remaining $412,500 drawable at the Company’s request prior to the maturity of the Convertible Promissory Note. As of June 30, 2023, there was an amount of $412,500 outstanding under Working Capital Loans in the form of the Convertible Promissory Note. Further, an amount of $4,449 with interest at 4.86% on amount borrowed
from the Sponsor for the Extension was recognized as accrued interest expense – related party as of June 30, 2023 and interest expense
– related party under other (income)/expenses for the three and six months ended June 30, 2023 in unaudited condensed consolidated
statements of operations. On July 11, 2023, the Company issued a FutureTech Convertible Promissory Note in the total principal amount
of $825,000 to FutureTech and 100% of such amount has been utilized to fund the required payment in order to extend the period of time
to consummate a business combination from then current deadline of July 11, 2023 to October 11, 2023. On July 18, 2023, the Sponsor lent another $80,000 to the Company, resulting in the principal amount of the Convertible Promissory Note being increased to $492,500 and the available borrowing capacity being reduced to $332,500. Based on the foregoing, management believes that
the Company will not have sufficient working capital and borrowing capacity to meet its needs through the consummation of the initial
Business Combination. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve
liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction,
and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable
terms, if at all. In accordance with ASC Subtopic 205-40,
“Presentation of Financial Statements – Going Concern”, the Company has evaluated that there are certain
conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a
going concern through October 11, 2023 (refer to Note 9), the date that the Company will be required to cease all operations,
except for the purpose of winding up, if a Business Combination is not consummated. These consolidated financial statements do not
include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be
necessary should the Company be unable to continue as a going concern. Risks and Uncertainties In February 2022, the Russian Federation and
Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United
States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and
related sanctions on the world economy are not determinable as of the date of these consolidated financial statements. The specific
impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of
these condensed consolidated financial statements. Management continues to evaluate the impact of
the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus and war could have a negative effect on the
Company’s financial position, results of its operations and search for a target company, the specific impact is not readily determinable
as of the date of these condensed consolidated financial statements. |
