Salarius Pharmaceuticals Inc.
08/12/2025 | Press release | Distributed by Public on 08/12/2025 15:28
Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)
| Management's Discussion and Analysis of Financial Condition and Results of Operations |
The following discussion and analysis should be read in conjunction with the unaudited financial information and the notes thereto included herein, as well as our audited financial statements and notes thereto contained in our Annual Reporton Form 10-K for the year ended December 31, 2024, filed with the SEC on March 21, 2025. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under "Part I - Item 1A - Risk Factors" discussed in our Annual Reporton Form 10-K for the year ended December 31, 2024, in other subsequent filings with the SEC, and elsewhere in this Quarterly Report on Form 10-Q. These statements, like all statements in this report, speak only as of the date of this Quarterly Report on Form 10-Q (unless another date is indicated), and we undertake no obligation to update or revise these statements in light of future developments.
Overview
We are a clinical-stage biopharmaceutical company that has been focused on developing effective treatments for patients with cancer with high, unmet medical need. Specifically, we have been concentrated on developing treatments for cancers caused by dysregulated gene expression (i.e., genes which are incorrectly turned on or off). We have two classes of drugs that address gene dysregulation: targeted protein inhibitors and targeted protein degraders. Our technologies have the potential to work in both liquid and solid tumors. Our current pipeline consists of two small molecule drugs: (1) SP-3164, a targeted protein degrader, and (2) seclidemstat (SP-2577), a targeted protein inhibitor. We are located in Houston, Texas. On August 8, 2023, we announced that we retained Canaccord Genuity, LLC to lead a comprehensive review of strategic alternatives focusing on maximizing stockholder value, including but not limited to, an acquisition, merger, reverse merger, divestiture of assets, licensing, or other strategic transactions involving our company.
We have no products approved for commercial sale and have not generated any revenue from product sales. We have never been profitable and have incurred operating losses in each year since inception. We had an accumulated deficit of $84.6 million as of June 30, 2025. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations. As of June 30, 2025, we had cash and cash equivalents of $0.8 million and stockholders' equity balance of $-0.8 million, however we believe our cash and cash equivalents balance is approximately $3.4 million and stockholders' equity balance is above $2.5 million as of the filing date of this report. During the six month ended June 30, 2025, we sold 399,291 shares of our common stock in an ATM offering with gross proceeds of $0.4 million and 286,772 shares with gross proceeds of $0.7 million under the ELOC agreement, respectively.
Our financial statements are prepared using Generally Accepted Accounting Principles in the United States of America ("GAAP") applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Our financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities should we be unable to continue as a going concern.
We believe that there is presently insufficient funding available to allow us to continue our current and planned clinical programs for a period exceeding 12 months from the date of this filing with the SEC.
The lack of revenue from product sales to date and recurring losses from operations since our inception raise substantial doubt as to our ability to continue as a going concern. We will continue to require substantial additional capital to continue our operations and any clinical development activities that we determine to advance and will need such additional capital within the next several months to continue to fund our operations beyond the second quarter of 2026. The amount and timing of our future funding requirements will depend on many factors, including the result of strategic alternatives process, our ability to raise additional capital on commercially reasonable terms, the pace and results of clinical development activities, and market conditions. Failure to raise capital as and when needed, on favorable terms or at all, would have a material negative impact on our financial condition and our ability to continue our operations.
We may attempt obtain additional capital through the sale of equity securities in one or more offerings or through issuances of debt instruments, which will likely cause significant dilution to our existing shareholders. We may also consider new collaborations or selectively partnering our technology. However, we cannot provide any assurance
that we will be successful in accomplishing any of our plans to obtain additional capital or be able to do so on terms acceptable to us.
If we do not raise capital in the next several months, we will be forced to cease operations, liquidate our assets and possibly seek bankruptcy protection or engage in a similar process.
Recent Developments
Securities ELOC Agreement
On December 12, 2024, Salarius entered into a securities purchase agreement (the "ELOC Agreement") with C/M Capital Master Fund, LP (the "Purchaser"), pursuant to which Salarius, subject to the restrictions and satisfaction of the conditions in the ELOC Agreement, has the right, but not the obligation, to sell to the Purchaser, and the Purchaser is obligated to purchase, up to the lesser of (i) $10 million of newly issued shares (the "Purchase Shares") of Salarius' common stock and (ii) the Exchange Cap (as defined in the ELOC Agreement). As consideration for the Purchaser's execution and delivery of the ELOC Agreement, Salarius has agreed to issue to the Purchaser, simultaneously with the delivery of any and all Purchase Shares purchased under the ELOC Agreement, a number of shares of Salarius common stock equal to one percent (1%) of the number of Purchase Shares actually sold in each sale under the ELOC Agreement.
In July 2025, Salarius issued and sold 5,463,671 shares (the "Purchase Shares") of its common stock to the Purchaser pursuant to the ELOC Agreement at a weighted average exercise price of $0.66 for an aggregate purchase price of $3.5 million. These issuances and sales were made following written notice delivered by Salarius to Investor, directing Investor to purchase the Purchase Shares. Salarius also issued 54,637 shares of its common stock to the Purchaser as commitment shares pursuant to the terms of the ELOC Agreement.
July 8, 2025 Special Meeting
Salarius's special meeting of stockholders held on July 8, 2025, Salarius' stockholders approved a proposal to remove the Exchange Cap under the ELOC Agreement so that Salarius can issue additional shares of common stock pursuant to the ELOC Agreement up to the maximum of $10 million of newly issued shares. To the extent that Salarius sells shares of its common stock pursuant to the ELOC Agreement or any similar program in the future.
Salarius stockholders also approved an amendment to the Company's Certificate of Incorporation, as amended, to effect a reverse stock split of the Company's Common Stock at a ratio in the range of 1:4 to 1:40, as determined by the Company's Board of Directors (the "Board"), and with such reverse stock split to be effected at such time and date, if at all, as determined by the Board in its sole discretion.
Entry into Merger Agreement with Decoy Therapeutics, Inc. ("Decoy")
On August 8, 2023, Salarius announced that it retained Canaccord Genuity, LLC to lead a comprehensive review of strategic alternatives focusing on maximizing stockholder value, including but not limited to, an acquisition, merger, reverse merger, divestiture of assets, licensing, or other strategic transactions involving the company. On January 10, 2025, Salarius entered into an Agreement and Plan of Merger (as amended the "Merger Agreement") with Decoy Therapeutics MergerSub I, Inc., a Delaware corporation and a wholly owned subsidiary of Salarius ("First Merger Sub"), Decoy Therapeutics MergerSub II, LLC, a Delaware limited liability company and wholly owned subsidiary of Salarius ("Second Merger Sub"), and Decoy. The Decoy transaction is structured as a two-step transaction. In step one of the transaction, Salarius will combine with Decoy (the "Merger") by causing First Merger Sub to be merged with and into Decoy, with Decoy surviving the merger as a wholly owned subsidiary of Salarius (the "First Merger"). Immediately following the First Merger, Decoy will merge with and into Second Merger Sub, with Second Merger Sub being the surviving entity and continuing under the name "Decoy Therapeutics, LLC" as a wholly owned subsidiary of Salarius. The closing of the Merger contemplated by step one of the transaction (the "Closing") is conditioned upon, among other things, minimum proceeds from offerings of at least $6.0 million (collectively, the "Qualified Financing") and the continued listing of Salarius' common stock ("common stock") on Nasdaq (as the term is defined below). For the avoidance of doubt, while the Merger Closing contemplated by step one of the transaction is conditioned on Salarius' continued listed on Nasdaq, neither the Qualified Financing nor the Merger Closing is contingent on Nasdaq's approval of an initial listing application, which is expected to be filed following the consummation of the Qualified Financing and the Merger Closing in connection with step two of the transaction.
In step two of the Decoy transaction, Salarius has agreed to call a special stockholder meeting to approve, among other things, the conversion of the Preferred Stock to be issued at Merger Closing into shares of Salarius common stock (the "Conversion Proposal"). The Preferred Stock issued at the Merger Closing will not convert into Salarius common stock until Salarius obtains stockholder approval to approve the Conversion Proposal. Nasdaq has informed Salarius that the Decoy transaction constitutes a business combination that will result in a "Change of Control" pursuant to Listing Rule 5110(a) in connection with step two of the transaction and that the post-transaction entity will be required to satisfy all of Nasdaq's initial listing criteria and to complete Nasdaq's initial listing process prior to Salarius' stockholder meeting to seek approval for the Conversion Proposal. Salarius therefore intends to commence the initial listing process following the consummation of the Qualified Financing and the Merger Closing at such time that the post-transaction entity is expected to satisfy all of the applicable Nasdaq initial listing criteria. The Preferred Stock issued at the Merger Closing in connection with step one of the Decoy transaction will not be convertible into Salarius common stock until Nasdaq's approval of the initial listing application and stockholder approval of the Conversion Proposal. Salarius intends to register the issuance of the shares of Salarius common stock underlying the Preferred Stock within 60 days of the Merger Closing.
The original Merger Agreement provided that the number of shares of Salarius common stock and the number of shares of Salarius common stock underlying the Series A Preferred Stock to be issued at Merger Closing was based on an exchange ratio which assumed a base value of $28.0 million for Decoy and $4.6 million for Salarius. In the original Merger Agreement, this ratio was subject to adjustment based on the balance sheet cash available to each of Salarius and Decoy at Merger Closing (excluding any proceeds raised in any Qualified Financing).
On March 28, 2025, Salarius, First Merger Sub, Second Merger Sub and Decoy entered into Amendment No. 1 to the Merger Agreement ("Amendment No.1"), pursuant to which the parties agreed to eliminate the adjustment based on the relative balance sheet cash available to Salarius and Decoy at Closing. Accordingly, under Amendment No. 1, the relative ownership percentages of the combined company was effectively fixed, with Salarius' legacy stockholders retaining 14.1% and Decoy's legacy stockholders retaining 85.9% of the combined company following the completion of the Merger, in each case calculated on a fully-diluted basis, and before taking into account the dilutive effects of the Qualified Financing and any issuance of securities pursuant to such Qualified Financing after January 10, 2025, the date of entry into the original Merger Agreement.
On June 10, 2025, Salarius, First Merger Sub, Second Merger Sub and Decoy entered into Amendment No. 2 to the Merger Agreement ("Amendment No. 2") to address significant changes in market conditions and secure necessary consents from Decoy noteholders for the completion of the transaction.
Since the execution of the original Merger Agreement in January 2025 and following the execution of Amendment No. 1, Salarius' common stock price has experienced substantial deterioration, materially affecting the relative valuations underlying the exchange ratio. As a result, the parties have agreed to reduce Salarius' relative valuation from $4.6 million at the time of the original Merger Agreement to $2.31 million. This reduction results in a change in the exchange ratio such that the number of shares of common stock underlying Salarius' Preferred Stock to be issued to Decoy stockholders at Merger Closing will be increased by approximately 17 million shares. Accordingly, under Amendment No. 2, the relative ownership percentages of the combined company will result in Salarius' legacy stockholders retaining 7.6% and Decoy's legacy stockholders retaining 92.4% of the combined company following the completion of the Merger, in each case calculated on a fully-diluted basis, and before taking into account the dilutive effects of the Qualified Financing and any issuance of securities pursuant to such Qualified Financing after June 10, 2025, the date of Amendment No. 2.
In addition, Amendment No. 2 revised the form of Certificate of Designation (as defined further below) for Preferred Stock that will be filed upon Merger Closing to include post-closing anti-dilution price protection for holders of Preferred Stock whereby if, following completion of the Qualified Financing and the Merger, Salarius conducts any subsequent dilutive financing of at least $2 million at a weighted average effective price per share below the offering price offered to the public in the Qualified Financing, the conversion ratio will be reset to provide additional shares to Preferred Stockholders in an amount proportional to the dilution caused by such offering, with such protection applying for one year from issuance. The revised Certificate of Designation also provides that the Preferred Stock will not be convertible until the combined company meets the relevant initial listing standards of Nasdaq and contains a provision designed to prevent Preferred Stockholders from engaging in short sales of Salarius' common stock. As provided in the original Certificate of Designation, the Preferred Stock will also not convert until Salarius obtains stockholder approval pursuant to Nasdaq listing rule 5635. Salarius intends to register the issuance of the shares of Salarius common stock underlying the Preferred Stock within 60 days of the Merger Closing.
On July 18, 2025, Salarius, First Merger Sub, Second Merger Sub and Decoy entered into Amendment No. 3 to the Merger Agreement ("Amendment No. 3") to allow certain holders of Decoy's non-convertible promissory notes (the "Decoy Promissory Notes") to exchange such debt for shares of Salarius' newly created Series B Non-Voting Convertible Preferred Stock ("Series B Preferred Stock") pursuant to note exchange agreements between the holders of Decoy Promissory Notes and Decoy (the "Note Exchange Agreements"). The number of shares underlying the Series B Preferred Stock will be calculated by dividing the principal and interest owed on the exchanged Decoy Promissory Notes by the per share offering price in the Qualified Financing, with the shares underlying the Series A Preferred Stock being reduced on a one-for-one basis by the number of shares underlying the Series B Preferred Stock, such that the relative percentage ownerships (pre-Qualified Financing) remain unchanged. The Series B Preferred Stock is identical in all material respects to the Series A Preferred Stock, including a conversion ratio of 1,000 shares of common stock per preferred share, and subject to similar adjustment and conversion restrictions, except for certain redemption and conversion provisions that include: (i) mandatory redemption requiring fifty percent (50%) of net proceeds from Salarius' at-the-market equity program and equity line of credit to be used for redemption of the Series B Preferred Stock until fully redeemed, (ii) optional redemption allowing Salarius to redeem all or any portion of the outstanding Series B Preferred Stock at any time following the Merger Closing, and (iii) optional conversion at the discretion of the holders upon stockholder approval of the conversion of the Series B Preferred Stock and the Company's achievement of the Nasdaq initial listing standards for a period of one year following such approvals, at which time remaining shares of Series B Preferred Stock shall automatically convert into Company common stock at the conversion ratio. Amendment No. 3 also requires the Company to effectuate the transactions contemplated by the Note Exchange Agreements, with the closing of such agreements to occur at the Merger Closing.
On July 29, 2025, Salarius, First Merger Sub, Second Merger Sub and Decoy entered into Amendment No. 4 to the Merger Agreement ("Amendment No. 4) to modify the conversion terms of the Company's form of Certificate of Designations of Series A Non-Voting Convertible Preferred Stock and Series B Non-Voting Convertible Preferred Stock to further incentivize the consent and conversion by the holders of certain convertible and non-convertible notes of Decoy. Specifically, the Fourth Amendment modifies the Certificate of Designations for each series of Preferred Stock to (i) remove the $2 million threshold requirement for triggering a "subsequent financing" under Section 7(e) that results in a proportional adjustment to the conversion ratio, (ii) change the conversion price adjustment calculation from a weighted average pricing mechanism to the actual per share offering price in any subsequent financing, and (iii) eliminate the one-year limitation on adjustments to the conversion ratio such that the adjustment will apply until such time as the Company's stockholders approve the conversion of the Preferred Stock and the Company meets applicable Nasdaq initial listing standards. Except as modified by Amendment No. 4, the terms of the original Merger Agreement and Amendment Nos. 1, 2 and 3 remain in full force and effect.
Warrant Cancellation Agreement
On January 10, 2025, Salarius entered into a Warrant Cancellation Agreement (the "Warrant Cancellation Agreement") with an accredited investor. Salarius previously issued to the investor a Series A-1 Common Stock Purchase Warrant to purchase 454,546 shares of its common stock pursuant to the offering described in Salarius' Current Report on Form 8-K filed with the Securities and Exchange Commission ("SEC") on May 16, 2023 (the "Warrant"). Pursuant to the Warrant Cancellation Agreement, on January 10, 2025, Salarius paid the investor an aggregate amount in cash of $350,000 in exchange for the surrender and cancellation of the Warrant.
Nasdaq Delisting Notice
On April 23, 2025, Salarius received written notice (the "Notice") from Nasdaq notifying Salarius that it is not in compliance with Nasdaq listing rule 5550(a)(2) because the closing bid price of Salarius' common stock for the last 30 consecutive business days was lower than the minimum bid price requirement of $1.00 per share (the "Minimum Bid Price Requirement"). Normally, a company would be afforded a 180-calendar day period to demonstrate compliance with the Minimum Bid Price Requirement. However, pursuant to Nasdaq listing rule 5810(c)(3)(A)(iv), Salarius is not eligible for any compliance period specified in Nasdaq listing rule 5810(c)(3)(A) because Salarius has effected a reverse stock split during the prior one-year period.
In addition, as previously disclosed, on March 26, 2025, Salarius received a letter from Nasdaq notifying Salarius that, based on the financial statements contained in its Annual Report on Form 10-K for the year ended December 31, 2024, Salarius no longer complied with the requirement under Nasdaq Listing Rule 5550(b)(1) to maintain a minimum of $2.5 million in stockholders' equity for continued listing on The Nasdaq Capital Market (the "Equity Standard"). The letter indicated that Salarius had until May 12, 2025 to either regain compliance with the Equity
Standard or submit a plan to Nasdaq to regain compliance with the Equity Standard (a "Compliance Plan"). However, pursuant to Nasdaq listing rule 5810(d)(2), Salarius' failure to comply with the Minimum Bid Price Requirement serves as a separate and additional reason for delisting and, as such, the Notice indicates that Nasdaq will not entertain a Compliance Plan, and Salarius should also address Salarius' noncompliance with the Equity Standard before a Nasdaq Hearings Panel (the "Hearings Panel") if Salarius appeals Nasdaq's determination.
Accordingly, unless Salarius requested an appeal of the delisting determination by April 30, 2025, Nasdaq had determined that Salarius' securities would have been scheduled for delisting from The Nasdaq Capital Market and suspended at the opening of business on May 2, 2025. In addition, a Form 25-NSE would have been filed with the SEC, which would have removed Salarius' securities from listing and registration on The Nasdaq Stock Market.
Salarius appealed the delisting determination before the April 30, 2025 deadline by requesting an appeal with a Hearings Panel. The request for an appeal stayed the suspension of Salarius' securities and the filing of the Form 25-NSE pending the Hearings Panel's decision. The appeal before the Hearings Panel occurred on June 3, 2025. At the appeal before the Hearings Panel, the Company presented its plans to regain compliance with the Minimum Bid Price Requirement, including via the implementation of a reverse stock split (shareholder approval sought at the Special Meeting held on July 8, 2025 (the "Special Meeting")), and the Equity Standard in connection with the Company's planned merger transaction with Decoy (as well as future draw-downs from its equity line of credit with C/M Capital Master Fund L.P. following the lifting of the stockholder approval cap of 19.9% under Nasdaq Listing Rule 5635(a) and 5635(d) at the Special Meeting). At the Special Meeting held on July 8, 2025, Salarius' stockholders approved the reverse stock split proposal and the lifting of the stockholder approval cap.
On July 11, 2025, Salarius received written notification from Nasdaq that the Hearings Panel has granted Salarius an extension to regain compliance with Nasdaq Listing Rules 5550(a)(2) and 5550(b)(1). The extension by the Hearings Panel is contingent on Salarius achieving scheduled milestones and notifying Nasdaq of such achievements. Such milestones consisted of regaining compliance with the Equity Standard by early July 2025 and regaining compliance with the Minimum Bid Price Requirement by early August 2025. On July 28, 2025, Salarius received notification from Nasdaq that the Hearings Panel has granted Salarius an additional extension to regain compliance with the Equity Standard by mid August-2025 and to regain compliance with the Minimum Bid Price Requirement by late August 2025. If Salarius is not successful at satisfying these milestones within the time periods prescribed by the Hearings Panel, Salarius may be delisted. There is no assurance that Salarius will be able to regain compliance with the applicable continued listing requirements by the Hearings Panel's deadline.
The Hearings Panel reserves the right to reconsider the terms of this granted exception based on any event, condition or circumstance that exists or develops that would, in the opinion of the Hearings Panel, make continued listing of Salarius' securities on Nasdaq inadvisable or unwarranted. The Hearings Panel's notification advised Salarius that the Nasdaq Listing and Hearing Review Council may, on its own motion, determine to review any Panel decision within 45 calendar days after issuance of the written decision. If the Listing Council determines to review the Hearings Panel's decision in Salarius' matter, it may affirm, modify, reverse, dismiss or remand the decision to the Hearings Panel.
Results of Operations
Three months ended June 30, 2025 Compared to the Three months ended June 30, 2024
The following table sets forth the condensed consolidated results of our operations for the three months ended June 30, 2025 compared to June 30, 2024.
| Three months ended June 30, | $ Change | ||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| Research and development expenses | $ | 116,383 | $ | 214,447 | $ | (98,064) | |||||||||||
| General and administrative expenses | 849,182 | 1,253,070 | (403,888) | ||||||||||||||
| Interest income, net and other | 7,740 | 43,084 | (35,344) | ||||||||||||||
| Net loss | $ | 957,825 | $ | 1,424,433 | $ | (466,608) | |||||||||||
Research and Development Expenses
Research and development expenses decreased during the three months ended June 30, 2025 compared to the same period in 2024 primarily related to the cost-savings plan implemented in the third quarter of 2023 which included a significant reduction in operating personnel. Lower research and development expenses will continue in 2025 as we have curtailed our sponsored clinical trials and intend to rely on clinical trial data from the investigator-initiated clinical trial conducted by MD Anderson Cancer Center before assessing next steps in our clinical development plans.
| SP-2577 | SP-3164 | ||||||||||||||||||||||
| Research and development costs by candidates and by categories: | Three months ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Outsourced research and development costs | $ | 27,502 | $ | 30,527 | $ | - | $ | 17,791 | |||||||||||||||
| Manufacturing and laboratory costs | 80,475 | 57,946 | 8,406 | 108,183 | |||||||||||||||||||
| Total research and development costs | $ | 107,977 | $ | 88,473 | $ | 8,406 | $ | 125,974 | |||||||||||||||
General and Administrative Expenses
General and administrative expenses were $0.8 million during the three months ended June 30, 2025, compared to $1.3 million for the three months ended June 30, 2024. The decrease is related to lower professional expense, personnel cost, insurance expense, and facility costs.
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
The following table sets forth the condensed consolidated results of our operations for the six months ended June 30, 2025 compared to June 30, 2024.
| Six months ended June 30 | Change | |||||||||||||
| 2025 | 2024 | |||||||||||||
| Research and development expenses | 191,915 | 457,449 | (265,534) | |||||||||||
| General and administrative expenses | 2,492,345 | 2,781,683 | (289,338) | |||||||||||
| Interest income(expense), net | 16,902 | 99,409 | (82,507) | |||||||||||
| Net loss | $ | 2,667,358 | $ | 3,139,723 | $ | (472,365) | ||||||||
Research and Development Expenses
Research and development expenses decreased during the six months ended June 30, 2025 compared to the same period in 2024 primarily related to the cost-savings plan implemented in the third quarter of 2023 which included a significant reduction in operating personnel. Lower research and development expenses will continue in 2025 as we have curtailed our sponsored clinical trials and intend to rely on clinical trial data from the investigator-initiated clinical trial conducted by MD Anderson Cancer Center before assessing next steps in our clinical development plans.
| Six months ended June 30 | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| Outsourced research and development costs | 72,287 | 171,373 | - | 54,328 | ||||||||||
| Manufacturing and laboratory costs | 90,185 | 73,216 | 29,443 | 158,532 | ||||||||||
| Total research and development costs | $ | 162,472 | $ | 244,589 | $ | 29,443 | $ | 212,860 | ||||||
General and Administrative Expenses
General and administrative expenses were $2.5 million during the six months ended June 30, 2025, compared to $2.8 million for the six months ended June 30, 2024. The decrease is related to cost savings plan activities put in
place in the third quarter of 2023 including lower personnel cost, lower insurance and facility expenses, which were partially offset by contracture separation costs of $0.5 million incurred and paid during the six month period ended June 30, 2024 in connection with our President and Chief Executive Officer ending his full-time employment and transitioning to a part-time consultant role, effective February 20, 2024 and higher professional expense related to the merger. There were no separation costs during the same period in 2025.
Liquidity and Capital Resources
Overview
Since inception, we have incurred operating losses and we anticipate that we will continue to incur losses for the foreseeable future. We have not generated any cash inflows from product sales. We do not know when, or if, we will generate any revenue from product sales. We do not expect to generate any revenue from product sales unless and until we obtain regulatory approval for and commercializes any of our product candidates, all of which are in early stages of development. We have curtailed expenses and plan to use our two remaining full time employees and consultants to continue our operations.
We have no products approved for commercial sale and have not generated any revenue from product sales. We have never been profitable and have incurred operating losses in each year since inception. We had an accumulated deficit of $84.6million as of June 30, 2025. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.
The lack of revenue from product sales to date and recurring losses from operations since our inception raise substantial doubt as to our ability to continue as a going concern. We will continue to require substantial additional capital to continue our operation and clinical development activities and may need such additional capital sooner than 12 months. The amount and timing of our future funding requirements will depend on many factors, including the result of our strategic alternatives process, our ability to raise additional capital on commercially reasonable terms, the pace and results of clinical development activities, and market conditions. Failure to raise capital as and when needed, on favorable terms or at all, would have a negative impact on our financial condition and our ability to continue our operations.
As of June 30, 2025, cash and cash equivalents totaled $0.8 million, which were held in bank deposit accounts and a money market account. Working capital totaled $-0.9 million as of June 30, 2025. Our cash and cash equivalents balance decreased during the six months ended June 30, 2025, primarily due to cash used in operating activities offsetting buy the cash received from financing activities.
In July 2025, we sold 5,518,308 shares of common stock with proceeds of $3.8 million during the period subsequent to June 30, 2025 according to the Purchase Agreement entered into on December 12, 2024 with C/M Capital Master Fund, LP. We have approximately 3.4 million in cash and cash equivalents as of the date of this report and we believe such amount is sufficient to fund our current and restructured operations into the second quarter of 2026. Our stockholders' equity balance was $-0.8 million at June 30, 2025, and is above $2.5 million as of this report date. If for any reason the Merger does not close in the next few months, we would need to raise additional capital to continue to fund the further development of product candidates and our operations. If we are unable to maintain sufficient financial resources, our business, financial condition and results of operations will be materially and adversely affected. Additionally, equity or debt financings may have a dilutive effect on the holdings of our existing stockholders. We have curtailed expenses and plan to use our two remaining full time employees and consultants to continue our operations. As a result, if we are unable to complete the Merger in the next few months, we will likely need to conduct a wind down of our operations.
Cash Flows
| Six months ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Net cash (used in) provided by in: | |||||||||||
| Operating activities | $ | (2,044,011) | $ | (2,426,147) | |||||||
| Financing activities | 404,369 | (200,940) | |||||||||
| Net decrease in cash and cash equivalents | $ | (1,639,642) | $ | (2,627,087) | |||||||
Operating Activities
Net cash used in operating activities was $2.0 million in the current period, a decrease of approximately $0.4 million from the same period a year ago. The decrease is primarily due to lower operating expenses during the current period compared to the same period last year, and higher accounts payable and accrued expenses balances in the current period.
Financing Activities
Net cash provided by financing activities for the six months ended June 30, 2025 was $0.4 million, mainly resulting from the Company's sale of common shares under the ATM and ELOC program offset by the repayments on notes payable for D&O insurance. Net cash used by financing activities for the six months ended June 30, 2024 was $0.2 million, mainly resulting from the Company's repayments on notes payable for D&O insurance.
Critical Accounting Policies and Estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the condensed consolidated balance sheet and the reported amounts of expenses during the reporting period. In accordance with GAAP, we base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances at the time such estimates are made. Actual results may differ materially from our estimates and judgments under different assumptions or conditions. We periodically review our estimates in light of changes in circumstances, facts and experience. The effects of material revisions in estimates are reflected in our condensed consolidated financial statements prospectively from the date of the change in estimate.
There have been no material changes to our critical accounting policies from those described in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K filed with SEC on March 21, 2025.
Readers should refer to our Annual Report on Form 10-K, Note 2, Basis of Presentation and Significant Accounting Policies to the accompanying financial statements for descriptions of these policies and estimates.
Salarius Pharmaceuticals Inc. published this content on August 12, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on August 12, 2025 at 21:28 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]