Workflow
Salarius Pharmaceuticals(SLRX) - 2025 Q1 - Quarterly Report

PART I. Financial Information Financial Statements (Unaudited) The company reported a $1.7 million net loss and a severe decline in stockholders' equity, raising substantial doubt about its going concern status Condensed Consolidated Balance Sheets The company's balance sheet reflects a sharp deterioration in financial health, with total assets decreasing and liabilities increasing significantly Condensed Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,798,380 | $2,434,528 | | Total current assets | $2,305,086 | $2,987,562 | | Total assets | $2,339,392 | $3,022,974 | | Total liabilities | $2,277,526 | $1,511,279 | | Total stockholders' equity | $61,866 | $1,511,695 | Condensed Consolidated Statements of Operations The company's net loss remained stable at $1.7 million as decreased R&D expenses were offset by higher G&A costs Three Months Ended March 31 (Unaudited) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Research and development | $75,532 | $243,002 | | General and administrative | $1,643,163 | $1,528,613 | | Total operating expenses | $1,718,695 | $1,771,615 | | Net loss | $(1,709,533) | $(1,715,290) | | Loss per common share | $(1.03) | $(3.27) | Condensed Consolidated Statements of Cash Flows Net cash used in operations decreased, and financing activities provided cash, resulting in a smaller net decrease in cash reserves Cash Flow Summary for Three Months Ended March 31 (Unaudited) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,181,714) | $(1,353,955) | | Net cash (used in) provided by financing activities | $545,566 | $(172,750) | | Net decrease in cash and cash equivalents | $(636,148) | $(1,526,705) | | Cash, cash equivalents at end of period | $1,798,380 | $4,373,205 | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity collapsed to just $61,866 due to a significant net loss that outpaced funds raised from equity issuance - The company's total stockholders' equity decreased to $61,866 as of March 31, 2025, down from $1,511,695 at December 31, 202425 Notes to Condensed Consolidated Financial Statements Notes highlight substantial going concern doubt, a pending merger with Decoy Therapeutics, and recent Nasdaq delisting notices - The company has entered into a merger agreement with Decoy Therapeutics, which is contingent upon certain conditions, including a Qualified Financing of at least $6.0 million329698 - Management has concluded there is substantial doubt about the company's ability to continue as a going concern, as existing cash is insufficient to fund operations for one year3334 - In March and April 2025, the company received delisting notices from Nasdaq for failing to meet the minimum stockholders' equity requirement of $2.5 million and the minimum bid price of $1.00 per share838486 - During Q1 2025, the company sold common stock through an "at the market offering" (ATM) for gross proceeds of $0.4 million and under an Equity Line of Credit (ELOC) agreement for proceeds of $0.7 million6364 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's critical financial condition, dependency on the Decoy merger, and operational results - The company's cash and cash equivalents of $1.8 million as of March 31, 2025, are only sufficient to fund operations into the later part of Q2 2025, raising substantial doubt about its ability to continue as a going concern92117 - On January 10, 2025, Salarius entered into a merger agreement with Decoy Therapeutics, where legacy stockholders would own approximately 14.1% and Decoy's stockholders would own 85.9% of the combined company9596 - If the merger with Decoy does not close, the company will likely need to wind-down its operations and possibly seek bankruptcy protection94102117 - The decrease in R&D expenses is due to a cost-savings plan, while the increase in G&A expenses is primarily due to higher professional fees associated with the proposed merger113115 Operating Expense Comparison (Q1 2025 vs Q1 2024) | Expense Category | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Research and development | $75,532 | $243,002 | $(167,470) | | General and administrative | $1,643,163 | $1,528,613 | $114,550 | Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, Salarius Pharmaceuticals is exempt from providing market risk disclosures - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk123 Controls and Procedures Management concluded that disclosure controls and procedures were effective with no significant changes in internal controls - Based on an evaluation as of March 31, 2025, the principal executive and financial officers concluded that the company's disclosure controls and procedures were effective125 - There were no significant changes in the company's internal control over financial reporting during the first quarter of 2025126 PART II. Other Information Legal Proceedings The company is not currently a party to any material legal proceedings - The company is not currently involved in any material legal proceedings128 Risk Factors Key risks include the potential failure of the Decoy merger, insufficient cash reserves, and the threat of Nasdaq delisting - If the merger and associated financing are not completed, the company will likely pursue dissolution and liquidation, with no assurance of any cash distribution to stockholders130135 - Cash resources of $1.8 million are only sufficient to meet needs into the later part of Q2 2025, creating substantial doubt about the company's ability to continue as a going concern132138 - The company's common stock is subject to delisting from Nasdaq due to failure to meet minimum bid price and stockholders' equity requirements139143 Unregistered Sales of Equity Securities and Use of Proceeds The company sold $740,500 of common stock through a private placement under its ELOC agreement - Under its ELOC Agreement, the company sold 283,933 shares of common stock for an aggregate purchase price of $740,500 between January 13, 2025, and March 7, 2025149 - The securities were issued in a private placement to an accredited investor, relying on exemptions from registration under the Securities Act148 Defaults Upon Senior Securities None Mine Safety Disclosures Not Applicable Other Information None Exhibits This section lists exhibits filed with the Form 10-Q, including the Merger Agreement and related officer certifications