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Salarius Pharmaceuticals, Inc. (NASDAQ:SLRX), whose stock has declined nearly 80% over the past year and currently trades at $0.74, has made a significant amendment to its merger agreement with Decoy Therapeutics, Inc., as disclosed in a recent SEC filing dated June 10, 2025. According to InvestingPro data, the company’s market capitalization stands at just $1.57 million, reflecting significant investor concerns about its future prospects. The amendment, known as Amendment No. 2, comes in response to substantial changes in market conditions and aims to secure necessary consents from Decoy noteholders for the completion of the transaction.
Initially disclosed on January 13, 2025, the merger agreement underwent a previous amendment on March 28, 2025, which fixed the relative ownership percentages of the combined company post-merger. However, due to a considerable drop in the company’s stock price since the original agreement - with InvestingPro showing a steep 60% decline year-to-date - Salarius has adjusted the exchange ratio to increase the number of shares of Common Stock underlying the company’s Series A Preferred Stock to be issued to Decoy stockholders at closing by approximately 17 million shares. Want deeper insights? InvestingPro offers 8 additional key tips about SLRX’s performance and prospects.
The latest amendment results in Salarius legacy stockholders retaining 7.6% and Decoy’s legacy stockholders holding 92.4% of the combined company, calculated on a fully-diluted basis before accounting for the dilutive effects of the Qualified Financing and any issuance of shares after June 10, 2025.
Amendment No. 2 introduces a post-closing anti-dilution price protection for holders of Series A Preferred Stock. This protection ensures that if a subsequent dilutive financing occurs at a price per share below the offering price in the Qualified Financing, the conversion ratio will be adjusted to compensate the preferred stockholders proportionally for the dilution. This anti-dilution provision will be in effect for one year from issuance.
Furthermore, the Series A Preferred Stock will not be convertible until the combined company meets Nasdaq’s initial listing standards and obtains stockholder approval per Nasdaq listing rule 5635. An additional provision is designed to prevent holders of Series A Preferred Stock from engaging in short sales of the company’s common stock.
Salarius Pharmaceuticals’ decision to amend the merger agreement reflects its commitment to adapt to the evolving market landscape and to ensure the transaction’s completion under revised terms that are favorable to both parties. While the company maintains a positive aspect of holding more cash than debt, InvestingPro analysis indicates an overall WEAK Financial Health Score of 1.6 out of 10, suggesting significant challenges ahead. The stock currently trades below its InvestingPro Fair Value, potentially offering an opportunity for investors willing to accept the associated risks.
The details of Amendment No. 2 and the Certificate of Designation are available in the full text of the documents filed with the SEC, which are incorporated by reference into the SEC filing. This news is based on a press release statement.
In other recent news, Salarius Pharmaceuticals, Inc. has been notified by Nasdaq about the potential delisting of its common stock due to not meeting the minimum bid price requirement of $1.00 for 30 consecutive business days. This development follows an earlier notice regarding the company’s failure to meet Nasdaq’s minimum stockholders’ equity threshold of $2.5 million. To address these issues, Salarius plans a merger with Decoy Therapeutics Inc., hoping it will help meet Nasdaq’s requirements. The company has amended the merger terms, setting fixed ownership percentages, with Salarius stockholders owning 14.1% and Decoy stockholders 85.9% of the combined entity. Additionally, Salarius has initiated a registered offering of common stock shares valued at up to $417,000 under an existing agreement with Ladenburg Thalmann & Co. Inc. This offering is part of the company’s strategy to raise capital through the equity market. Salarius intends to present a compliance plan to Nasdaq by May 12, 2025, but there is no guarantee it will be accepted. The company may request a hearing with a Nasdaq Hearings Panel if compliance is not achieved.
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