Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended September 30, 2025, for Salarius Pharmaceuticals, Inc. (SLRX). Although the request metadata referenced Decoy Therapeutics, Inc., the filing is for Salarius, which completed a merger with Decoy Therapeutics, Inc. on November 12, 2025, subsequent to the reporting period. Salarius is a clinical-stage biopharmaceutical company focused on cancer treatments, while Decoy is a preclinical-stage company developing peptide conjugate therapeutics using AI and machine learning. The combined entity operates as a single reporting segment.
Key Financial Metrics
| Metric | Q3 2025 (3 Months) | Q3 2024 (3 Months) | YTD 2025 (9 Months) | YTD 2024 (9 Months) |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Net Loss | $(873,467) | $(972,121) | $(3,540,825) | $(4,111,844) |
| Operating Expenses | $895,130 | $1,006,471 | $3,579,390 | $4,245,603 |
| Cash and Cash Equivalents (End of Period) | $4,809,680 (as of Sept 30, 2025) | |||
| Working Capital | $4,215,971 (Current Assets $6.06M - Current Liabilities $1.85M) | |||
| Accumulated Deficit | $(85,464,443) (as of Sept 30, 2025) | |||
| Net Cash Used in Operating Activities (YTD) | $(3,690,700) | |||
| Net Cash Provided by Financing Activities (YTD) | $6,265,852 |
Material Changes vs. Prior Period
- Reduced Operating Loss: Net loss decreased by approximately $98,654 in Q3 2025 compared to Q3 2024, and by $571,019 on a year-to-date basis. This reduction is primarily attributed to a cost-savings plan implemented in late 2023, resulting in lower personnel and professional service costs.
- Research and Development (R&D): R&D expenses decreased significantly year-over-year (down $75,408 in Q3 and $340,942 YTD) due to reduced outsourcing and personnel costs. However, management anticipates R&D expenses will increase post-merger to advance Decoy's pipeline.
- Capital Structure: The company executed a 1-for-15 reverse stock split effective August 15, 2025. Historical share data has been recast to reflect this split.
- Financing Activity: Significant cash inflows were generated through equity issuances under an At-The-Market (ATM) program and an Equity Line of Credit (ELOC) agreement, totaling approximately $6.5 million in net proceeds for the nine months ended September 30, 2025.
Guidance, Outlook, and Risks
- Merger Completion: The merger with Decoy Therapeutics closed on November 12, 2025. Salarius issued Series A and Series B Non-Voting Convertible Preferred Stock to former Decoy shareholders. These shares are not convertible to common stock until stockholder approval and Nasdaq initial listing approval are obtained.
- Subsequent Financing: On November 11-12, 2025, Salarius completed a public offering raising approximately $6.3 million in net proceeds. This included the sale of common stock, pre-funded warrants, and Series A and B warrants.
- Liquidity Outlook: Management believes that as of the filing date (with the November financing included), the company has approximately $13.3 million in cash, sufficient to fund operations through the first quarter of 2027. However, the filing explicitly states there is substantial doubt regarding the company's ability to continue as a going concern based on the September 30, 2025 balance sheet alone.
- Nasdaq Compliance: The company regained compliance with Nasdaq's minimum bid price and stockholders' equity standards in September and October 2025, respectively. It is now subject to a one-year Mandatory Panel Monitor. Failure to maintain compliance could result in delisting.
- Risks: Key risks include the inability to raise additional capital, the uncertainty of clinical trial results for both Salarius and Decoy assets, potential delisting from Nasdaq, and the integration risks associated with the Decoy merger.
Investor Verification Checklist
- Going Concern Status: Verify the sufficiency of the $13.3 million cash balance (post-November financing) against the projected burn rate for the combined entity.
- Preferred Stock Conversion: Monitor the timeline for stockholder approval and Nasdaq initial listing approval required to convert the Series A and B Preferred Stock issued to Decoy shareholders into common stock.
- Nasdaq Monitoring: Track the company's compliance with Nasdaq listing standards during the one-year Mandatory Panel Monitor period to avoid delisting.
- Merger Integration: Assess the progress of integrating Decoy's AI-driven peptide conjugate platform with Salarius's existing small molecule assets (SP-3164 and SP-2577).
- Dilution Impact: Review the terms of the November 2025 offering and the outstanding warrants (Series A, Series B, and Representative Warrants) to understand potential future dilution.