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Salarius Pharmaceuticals, Inc. (NASDAQ:SLRX), currently valued at $1.47 million in market capitalization, has amended its merger agreement with Decoy Therapeutics, Inc., effectively fixing ownership percentages post-merger and disregarding balance sheet cash adjustments. The company’s stock, trading at $0.86, has declined 78% over the past year. This change was announced today, following the amendment agreement made on Thursday. InvestingPro analysis suggests the stock may be undervalued at current levels, with additional insights available for subscribers.
The initial merger agreement, which was established on January 13, 2025, was based on an exchange ratio that assumed a base value of $28.0 million for Decoy and $4.6 million for Salarius. This ratio was subject to change based on each company’s balance sheet cash at closing. However, with the recent amendment, the exchange ratio is now set, with Salarius legacy stockholders owning 14.1% and Decoy’s legacy stockholders owning 85.9% of the combined company, on a fully-diluted basis. According to InvestingPro data, Salarius maintains a healthy cash position, holding more cash than debt on its balance sheet, with a current ratio of 1.98.
In conjunction with this development, Salarius received a notice from The Nasdaq Stock Market on Monday, March 26, 2025, indicating that the company no longer meets the Nasdaq Capital Market’s minimum stockholders’ equity requirement of $2.5 million. With an EBITDA of -$5.73 million and an overall Financial Health score rated as "FAIR" by InvestingPro, Salarius does not currently meet the alternative compliance standards either. This notice is not an immediate threat to the company’s listing but requires Salarius to submit a compliance plan by May 12, 2025, to regain or maintain compliance. The company could be granted an extension of up to 180 days to meet the equity standard.
The company is actively exploring options to address the compliance issue and intends to submit a compliance plan within the stipulated timeframe. However, there is no guarantee that the plan will be accepted by Nasdaq or that Salarius will achieve compliance within the extension period, if granted. Failure to regain compliance or to satisfy another Nasdaq requirement for continued listing could lead to delisting. Salarius may request a hearing before an independent Hearings Panel in such a case, which could grant an additional extension to regain compliance.
This news is based on a press release statement and contains forward-looking statements regarding the merger, compliance plans, and other operational matters. These are subject to risks and uncertainties, and actual results may differ. Salarius has made no further comments on the potential outcomes or strategies related to the Nasdaq notification or the amended merger agreement.
In other recent news, Salarius Pharmaceuticals has resumed patient enrollment in a Phase 1/2 clinical trial at the University of Texas MD Anderson Cancer Center. The trial, which evaluates the combination of seclidemstat and azacitidine for treating myelodysplastic syndrome (MDS) and chronic myelomonocytic leukemia (CMML), was previously on hold due to FDA concerns that have since been resolved. Interim results showed a promising 43% overall response rate among patients with higher-risk MDS and CMML. Additionally, Salarius Pharmaceuticals announced a definitive agreement to merge with Decoy Therapeutics, Inc., creating a new entity named Decoy Therapeutics. This merger aims to leverage Decoy’s IMP3ACT™ platform for peptide conjugate therapeutics. In another development, the company initiated a registered offering of common stock shares valued at up to $417,000 under an existing agreement with Ladenburg Thalmann & Co. Inc. The offering is part of Salarius’s strategy to raise capital through the equity market. This series of recent developments reflects Salarius Pharmaceuticals’ ongoing efforts to advance its clinical and corporate strategies.
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