Business Context and Reporting Period
Registrant: Salarius Pharmaceuticals, Inc. (filing on behalf of Decoy Therapeutics Inc.)
Filing Type: Form 8-K (Current Report)
Date of Report: August 22, 2025
Subject: Update regarding the proposed Merger Agreement between Salarius Pharmaceuticals, Inc. ("Salarius") and Decoy Therapeutics Inc. ("Decoy").
This filing updates the status of a two-step merger transaction originally announced in January 2025. In Step One, Salarius subsidiaries will merge with Decoy, with Decoy surviving as a wholly-owned subsidiary. Decoy stockholders will receive a combination of Salarius common stock and Series A Preferred Stock. Certain Decoy promissory note holders will receive Series B Preferred Stock. In Step Two, a special stockholder meeting will be held to approve the conversion of Preferred Stock into common stock, contingent upon the combined entity satisfying Nasdaq initial listing standards.
Key Financial Metrics
Decoy Therapeutics Inc. (Unaudited Results for Six Months Ended June 30, 2025):
- Net Loss: $3,997,524 (compared to a net loss of $1,677,921 in the prior period).
- Total Operating Expenses: $1,501,681 (decreased from $2,140,280 in the prior period).
- Research and Development Expenses: $888,675 (decreased 41.8% from prior period).
- General and Administrative Expenses: $613,006 (flat compared to prior period).
- Cash and Cash Equivalents (as of June 30, 2025): Approximately $3,134,000.
- Net Cash Used in Operating Activities: $1,354,505.
- Net Cash Provided by Financing Activities: $1,309,950 (primarily from proceeds of convertible notes).
Salarius Pharmaceuticals, Inc. (as of June 30, 2025):
- Cash and Cash Equivalents: Approximately $0.8 million (prior to July 2025 equity line sales).
- Accumulated Deficit: $84.6 million.
- Net Loss (Three Months Ended June 30, 2025): $1.0 million.
- Recent Financing: Approximately $3.8 million raised via equity line of credit in July 2025.
Merger Consideration Structure:
- Ownership Split (Pre-financing dilution): Legacy Salarius stockholders retain approximately 7.6%; Decoy stockholders own approximately 92.4%.
- Qualified Financing Condition: Merger closing is conditioned on minimum proceeds of at least $6.0 million.
Material Changes vs. Prior Period
- Decoy Net Loss Increase: Decoy's net loss for the six months ended June 30, 2025, increased by $2.3 million compared to the prior year period. This was driven by a $993,000 increase in fair value adjustment expense on convertible notes and a $400,000 increase in interest expense, partially offset by a $639,000 decrease in operating expenses.
- Grant Income Decline: Decoy's grant income decreased by approximately 98.7% ($982,000) year-over-year, reflecting a decrease in grant work conducted.
- Salarius Liquidity: Salarius reported cash of $0.8 million as of June 30, 2025, but subsequently raised $3.8 million in July 2025 to extend its runway into the second quarter of 2026.
- Nasdaq Compliance Status: Salarius received an extension from the Nasdaq Hearings Panel to regain compliance with the Minimum Bid Price Requirement by late August 2025 and the Equity Standard by mid-August 2025. The company is awaiting a decision on an additional extension for the Equity Standard.
Guidance, Outlook, and Risks
Merger Conditions and Timeline:
- The Merger Closing is contingent upon the completion of a "Qualified Financing" of at least $6.0 million and the continued listing of Salarius common stock on Nasdaq.
- Step Two of the transaction (conversion of Preferred Stock) requires Nasdaq approval of an initial listing application and stockholder approval.
- Salarius intends to commence the initial listing process following the Merger Closing.
Business Outlook:
- Decoy Pipeline: Decoy plans to file an Investigational New Drug (IND) application for its lead pan-Coronavirus prophylactic (DCOY101) in the first half of 2026. The company is also developing broad respiratory antivirals (Flu/COVID/RSV) and GPCR-targeted conjugates for colorectal cancer.
- Combined Strategy: The combined company intends to leverage Salarius's compound SP-3177 (an E3 ligase binder) with Decoy's peptide engineering platform to create peptide-based PROTACs (P-PROTACs) for oncology.
Material Risks and Contingencies:
- Going Concern: Both Salarius and Decoy have raised substantial doubt about their ability to continue as a going concern without the successful consummation of the Merger and additional financing.
- Delisting Risk: If Salarius fails to regain compliance with Nasdaq listing standards (Minimum Bid Price and Stockholders' Equity) by the extended deadlines, it faces delisting, which could severely impact liquidity and the ability to complete the Merger.
- Financing Risk: Failure to secure the $6.0 million Qualified Financing would prevent the Merger from closing. Additional capital will be required post-merger to fund operations.
- Regulatory Risk: Decoy's products are preclinical. Clinical trials are costly and uncertain. The FDA previously placed a partial clinical hold on Salarius's legacy program (SP-2577), which was lifted in February 2025.
Key Facts for Investor Verification
- Merger Closing Conditions: Verify if the $6.0 million "Qualified Financing" has been secured and if Salarius has regained compliance with Nasdaq listing requirements (specifically the $1.00 minimum bid price and $2.5 million stockholders' equity) by late August 2025.
- Preferred Stock Conversion: Confirm the timeline for the special stockholder meeting required to convert the Series A and Series B Preferred Stock into common stock, which is a prerequisite for Decoy stockholders to realize full voting rights and liquidity.
- Decoy Cash Runway: Assess Decoy's ability to fund operations until the first half of 2026 (target IND filing) given the current cash balance of ~$3.1 million and ongoing burn rate.
- Salarius Legacy Program: Review the status of the SP-2577 clinical trial at MD Anderson Cancer Center, which resumed enrollment in February 2025 after a clinical hold.
- Related Party Transactions: Note that Decoy executives hold promissory notes that will be exchanged for Series B Preferred Stock in the merger, subject to specific redemption and conversion provisions.