Salarius Seeks $6M to Seal Decoy Merger, Nasdaq Listing Hinges on Shareholder Vote

TL;DR

**DCOY is making a high-stakes bet on the Decoy merger, but the massive dilution and Nasdaq hurdles make this a speculative play for existing shareholders.**

AI Summary

Salarius Pharmaceuticals, Inc. (DCOY) is offering 1,518,027 shares of common stock, Series A Warrants, and Series B Warrants at an assumed combined public offering price of $5.27 per share, aiming to raise at least $6.0 million in Qualified Financing. This offering is critical to fund the two-step merger with Decoy Therapeutics Inc., which was initially agreed upon on January 10, 2025, and subsequently amended five times, most recently on September 17, 2025. The merger will result in Decoy stockholders owning approximately 81.7% of the combined entity, while Salarius' legacy stockholders will retain about 18.3%. The Preferred Stock issued to Decoy stockholders has price protection provisions, potentially increasing the underlying common stock from an initial 1,719,324 shares to a maximum of 4,814,106 shares if the offering price falls to $3.75 or lower. The conversion of Preferred Stock into common stock is contingent on Nasdaq's approval of an initial listing application and Salarius stockholder approval of the Conversion Proposal, which constitutes a 'Change of Control' under Nasdaq Listing Rule 5110(a).

Why It Matters

This S-1/A filing is crucial for Salarius Pharmaceuticals as it outlines the financing mechanism for its transformative merger with Decoy Therapeutics. For investors, the offering at $5.27 per share, coupled with the significant dilution for existing Salarius shareholders (retaining only 18.3% post-merger), presents a high-risk, high-reward scenario. Employees and customers of both companies face uncertainty until the Nasdaq listing and stockholder approvals are secured, impacting future operational stability and product development. The competitive landscape in the biotech sector means delays or failure to meet Nasdaq's initial listing criteria could severely undermine the combined entity's ability to compete and raise further capital.

Risk Assessment

Risk Level: high — The risk level is high due to several factors: the offering price of $5.27 per share is an assumed price, not final, and the actual price could be lower, increasing dilution. The merger is contingent on raising at least $6.0 million in Qualified Financing and continued Nasdaq listing, both of which are not guaranteed. Furthermore, the conversion of Preferred Stock into common stock, which could be up to 4,814,106 shares, is subject to Nasdaq's 'Change of Control' review and Salarius stockholder approval, introducing significant regulatory and shareholder approval risks.

Analyst Insight

Investors should carefully evaluate the potential for significant dilution, as Salarius' legacy stockholders will retain only 18.3% of the combined company. Monitor the actual offering price and the progress of Nasdaq's initial listing review, as these are critical determinants of the merger's success and the value of the Preferred Stock conversion. Consider the high degree of uncertainty surrounding the merger's completion and the post-merger entity's ability to meet Nasdaq's listing standards before making any investment decisions.

Financial Highlights

debt To Equity

0.0

revenue

$0

operating Margin

-1000%

total Assets

$10.6M

total Debt

$0

net Income

$-14.7M

eps

$-0.34

gross Margin

N/A

cash Position

$1.4M

revenue Growth

+0%

Key Numbers

• $5.27 — Assumed combined public offering price per share (Closing price of Salarius' common stock on Nasdaq on September 11, 2025)
• 1,518,027 — Shares of common stock offered (Number of shares Salarius is offering in this financing)
• $6.0 million — Minimum proceeds from Qualified Financing (Condition for the Merger Closing contemplated by step one of the transaction)
• 18.3% — Salarius' legacy stockholders' ownership (Expected ownership percentage of Salarius' legacy stockholders post-merger, before dilution from this offering)
• 81.7% — Decoy stockholders' ownership (Expected ownership percentage of Decoy stockholders post-merger, before dilution from this offering)
• 3,425,597 — Shares of Salarius common stock underlying Preferred Stock (Expected number based on the assumed offering price of $5.27 per share)
• 4,814,106 — Maximum shares of Salarius common stock underlying Preferred Stock (If the per share price in this offering or any future financing is equal to or lower than $3.75)
• $0.0001 — Par value per share (Par value of Salarius' common stock)
• 5% — Representative warrants percentage (Percentage of aggregate shares/pre-funded warrants sold in this offering for which representative warrants will be issued)
• 45-day — Underwriters' option period (Period for underwriters to purchase additional shares/warrants)

Key Players & Entities

• Salarius Pharmaceuticals, Inc. (company) — Registrant and offering shares
• Decoy Therapeutics Inc. (company) — Merger target
• Mark J. Rosenblum (person) — Acting Chief Executive Officer, Executive Vice President and Chief Financial Officer of Salarius
• The Nasdaq Capital Market (regulator) — Listing exchange for Salarius common stock
• Ladenburg Thalmann (company) — Underwriter
• Andrew L. Strong, Esq. (person) — Legal counsel from Hogan Lovells US LLP
• Stephen M. Nicolai, Esq. (person) — Legal counsel from Hogan Lovells US LLP
• Jeffrey Kuras, Esq. (person) — Legal counsel from Honigman LLP
• Michael Nertney, Esq. (person) — Legal counsel from Ellenoff Grossman & Schole LLP
• Securities and Exchange Commission (regulator) — Regulatory body for S-1/A filing

FAQ

Risk Factors

• Reliance on Future Financing [high — financial]: The company's ability to continue operations is highly dependent on its ability to secure additional funding through equity financings, including the current offering. Failure to raise sufficient capital could jeopardize its ability to fund its operations and pursue its business objectives, including the proposed merger with Decoy Therapeutics Inc.
• Merger Integration Risks [high — operational]: The proposed merger with Decoy Therapeutics Inc. involves significant integration challenges. The success of the combined entity hinges on effectively merging operations, management teams, and cultures. Delays or failures in integration could negatively impact the business and shareholder value.
• Nasdaq Listing Requirements [medium — regulatory]: The conversion of preferred stock into common stock is contingent on Nasdaq's approval of an initial listing application and Salarius stockholder approval. Failure to meet Nasdaq's listing requirements could prevent the conversion, impacting the capital structure and potentially the merger's completion.
• Dilution from Preferred Stock Conversion [high — financial]: The preferred stock issued to Decoy stockholders has price protection provisions. If the offering price is $3.75 or lower, the number of underlying common shares could increase from 3,425,597 to a maximum of 4,814,106, significantly diluting existing Salarius stockholders.
• Unproven Product Candidates [high — market]: Salarius' business relies on the development and commercialization of its product candidates, which are in early stages of development. There is no guarantee that these candidates will successfully navigate clinical trials, gain regulatory approval, or achieve market acceptance.

Industry Context

The biotechnology sector is characterized by high R&D costs, long development cycles, and significant regulatory hurdles. Companies often rely on substantial external financing to advance drug candidates through clinical trials. The competitive landscape is intense, with many companies vying for market share and investor capital.

Regulatory Implications

Salarius faces stringent regulatory requirements from the FDA for drug development and approval. Additionally, the proposed merger and stock conversion are subject to Nasdaq listing rules, requiring specific approvals and adherence to compliance standards to maintain public trading.

What Investors Should Do

1. Evaluate the dilution impact of the preferred stock price protection provisions.
2. Assess the viability and timeline of the merger with Decoy Therapeutics.
3. Analyze the cash burn rate and the adequacy of the $6.0 million minimum financing.

Key Dates

• 2025-01-10: Initial Merger Agreement — Established the framework for the business combination between Salarius and Decoy Therapeutics.
• 2025-09-17: Fifth Amendment to Merger Agreement — Indicates ongoing negotiations and adjustments to the terms of the merger, highlighting potential complexities.
• 2025-09-11: Salarius Common Stock Closing Price — Used as the basis for the assumed public offering price of $5.27 per share, influencing the terms of the current financing and merger.

Glossary

Qualified Financing

A financing round that meets specific criteria, in this case, raising at least $6.0 million, which is a condition for the merger to close. (Crucial for the completion of the merger with Decoy Therapeutics.)

Series A Warrants and Series B Warrants

Options to purchase Salarius common stock at a specified price within a certain timeframe, issued as part of the offering. (These are part of the financing package and represent potential future dilution.)

Price Protection Provisions

Terms in preferred stock that adjust the conversion ratio or provide other benefits to preferred stockholders if the common stock price falls below a certain level. (Could lead to significant dilution for common stockholders if the offering price is low.)

Change of Control

An event that results in a change in the majority ownership or control of a company, often triggering specific contractual obligations or regulatory reviews. (The conversion of preferred stock is considered a 'Change of Control' under Nasdaq rules, requiring stockholder approval.)

Year-Over-Year Comparison

This S-1/A filing reflects a significant shift in Salarius' strategic direction with the proposed merger with Decoy Therapeutics. Unlike previous filings focused solely on Salarius' pipeline, this document details the terms of the merger, the capital raise required to facilitate it, and the resulting pro forma ownership structure. Key financial metrics like revenue and margins are not directly comparable as the focus is on the combined entity's future prospects, with Salarius' legacy operations being subsumed.

Key Financial Figures

• $0.0001 — 7 shares of its common stock, par value $0.0001 per share (the "common stock"), Series
• $5.27 — sumed combined public offering price of $5.27 per share of common stock and accompany
• $10.50 — y a fraction, the numerator of which is $10.50 (the "Initial Issuance Price") and the
• $3.75 — event will the denominator be less than $3.75 (the "Floor Price"). Accordingly, the n
• $6.0 million — um proceeds from financings of at least $6.0 million (collectively, the "Qualified Financing
• $5 — pon an assumed public offering price of $5.27, the closing price of Salarius' comm

Filing Documents

• flks-20250923.htm (S-1/A) — 1699KB
• exhibit11-sx1a6.htm (EX-1.1) — 302KB
• exhibit49-sx1a6.htm (EX-4.9) — 131KB
• exhibit410-sx1a6.htm (EX-4.10) — 129KB
• exhibit411-sx1a6.htm (EX-4.11) — 128KB
• exhibit412-sx1a6.htm (EX-4.12) — 137KB
• exhibit413-sx1a6.htm (EX-4.13) — 138KB
• exhibit1032-sx1a6.htm (EX-10.32) — 64KB
• exhibit1033-sx1a6.htm (EX-10.33) — 52KB
• exhibit1034-sx1a6.htm (EX-10.34) — 57KB
• exhibit231-sx1a6.htm (EX-23.1) — 2KB
• exhibit232-sx1a6.htm (EX-23.2) — 3KB
• decoytherapeuticsa.jpg (GRAPHIC) — 19KB
• fruciassociatesiilogoa.jpg (GRAPHIC) — 52KB
• picture1.jpg (GRAPHIC) — 11KB
• signatureimagea.jpg (GRAPHIC) — 29KB
• 0001628280-25-042500.txt ( ) — 3557KB
• flks-20250923.xsd (EX-101.SCH) — 2KB
• flks-20250923_lab.xml (EX-101.LAB) — 19KB
• flks-20250923_pre.xml (EX-101.PRE) — 11KB
• flks-20250923_htm.xml (XML) — 2KB

Use of Proceeds

Use of Proceeds 74 Market Price Information 76 Dividend Policy 77 Capitalization 78

Dilution

Dilution 80 Principal Stockholders of Salarius 82 Principal Stockholders of the Combined Company 84

Description of Capital Stock

Description of Capital Stock 86

Description of Securities Salarius is Offering

Description of Securities Salarius is Offering 92 Material U.S Federal Income Tax Consequences 97

Underwriting

Underwriting 105 Legal Matters 110 Experts 110 Where You Can Find More Information 110 Incorporation of Certain Information by Reference 111 Unaudited Pro Forma Consolidated Combined Financial Information 112 References to " Salarius " and " Decoy " in this prospectus refer to Salarius Pharmaceuticals, Inc. and Decoy Therapeutics, Inc., respectively. References to the " combined company " refer to Salarius and its wholly owned subsidiary, Decoy, after the Merger, assuming the Merger is consummated. Except as otherwise noted, references to " we ," " us " or " our " refer to Salarius. References to " First Merger Sub " refer to Decoy Therapeutics MergerSub I, Inc., a newly formed, wholly owned subsidiary of Salarius and references to " Second Merger Sub " refer to Decoy Therapeutics MergerSub II, LLC, a newly formed, wholly owned subsidiary of Salarius. References to the " Merger Agreement " refer to that certain Agreement and Plan of Merger dated as of January 10, 2025, among Salarius, First Merger Sub, Second Merger Sub and Decoy, as amended from time to time. References to the " Merger " refers collectively to the merger of First Merger Sub with and into Decoy, with Decoy surviving as the surviving entity and as a wholly owned subsidiary of Salarius, and the merger of Decoy 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, in each case as contemplated under the Merger Agreement. i ABOUT THIS PROSPECTUS Salarius incorporates by reference important information into this prospectus. You may obtain the information incorporated by reference without charge by following the instructions under "Incorporation of Certain Information by Reference." You should carefully read this prospectus as well as additional information described under "Incorporation of Certain Information by Reference," before deciding to invest in Salar

Forward-looking statements in this prospectus include, but are not limited to, statements about the following

Forward-looking statements in this prospectus include, but are not limited to, statements about the following: the expected benefits of, and potential value created by, the Merger for the securityholders of Salarius and Decoy; the likelihood of the satisfaction of certain conditions to the completion of the Merger, including the conditions related to this offering, whether and when the Merger will be consummated and that Salarius' common stock remains listed on Nasdaq; the effects of the Merger and this offering on the ownership percentages of the Decoy's stockholders and Salarius' stockholders in the combined company; Salarius' expectations regarding its ability to regain compliance with the applicable Nasdaq continued listing requirements in the timeframe required by Nasdaq; Salarius' expectations regarding the timing of the combined company's ability to satisfy the Nasdaq initial listing standard and obtain stockholder approval for the conversion of the Preferred Stock into common stock in connection with step two of the Decoy transaction; the plans, strategies and objectives of management for future operations, including the execution of integration plans and the anticipated timing of filings, commencement of preclinical studies or clinical trials and release of data from such studies or trials; plans to develop and commercialize additional products candidates including planned preclinical, clinical, regulatory, commercialization and manufacturing activities; the attraction and retention of highly qualified personnel; the ability to protect and enhance the combined company's products and inte

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View this S-1/A filing on SEC EDGAR