Salarius Pharmaceuticals, Inc. (SLRX)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 net loss narrowed to $0.96M with diluted EPS of $(0.45), reflecting materially lower operating expenses; cash was $0.80M at quarter‑end, rising to ~$4.5M by July 30 after equity line drawdowns .
• The company secured Nasdaq Hearing Panel extensions (Equity Standard to mid‑Aug, Minimum Bid Price to late‑Aug), mitigating near‑term delisting risk while shareholders approved a reverse split range (1:4–1:40) and removal of the ELOC exchange cap to access additional capital .
• Merger terms with Decoy were amended: expected post‑closing ownership shifted to ~92.4% Decoy / ~7.6% Salarius (from ~86%/14%), increasing dilution to legacy SLRX holders; anti‑dilution and preferred conversion mechanics were revised .
• Strategic focus remains on supporting MD Anderson’s investigator‑initiated seclidemstat study and progressing the Decoy combination (AI/ML‑enabled peptide conjugates), with cash runway extended beyond Q2 2026 post‑July financing .

What Went Well and What Went Wrong

What Went Well

• Cost discipline drove operating expenses down: Q2 opex fell to $0.97M vs $1.47M in Q2 2024; R&D and G&A both declined year over year .
• Liquidity improved post‑quarter via ELOC: 5.5M shares issued for ~$3.8M in July, increasing cash to ~$4.5M and pushing stockholders’ equity above $2.5M as of filing date .
• Seclidemstat narrative reinforced: “These animal studies show the importance of inhibiting LSD1 expression and provide further support for the potential role of SP‑2577…” — David Arthur, CEO .

What Went Wrong

• Going concern and Nasdaq compliance risks persist: management warns dissolution if merger/financing fail; Panel extensions still require milestone achievement within weeks .
• Equity dilution increased: Decoy merger amendments reduced legacy SLRX holders’ expected ownership to ~7.6% and broadened conversion price protections for preferred stock, raising future dilution sensitivity .
• Negative equity at quarter‑end (−$0.83M) and working capital (−$0.90M) underscore fragility despite subsequent capital raises .

Financial Results

Segment R&D breakdown (by candidate):

KPIs and balance sheet trajectory:

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “These animal studies show the importance of inhibiting LSD1 expression and provide further support for the potential role of SP‑2577… MDACC… active and enrolling… we look forward to study updates later this year.” — David Arthur, President & CEO .
• “We believe Decoy’s IMP3ACT platform… offers both near‑ and long‑term value for our shareholders.” — David Arthur .
• Liquidity posture: “We believe our cash and cash equivalents balance is approximately $3.4 million and stockholders’ equity balance is above $2.5 million as of the filing date of this report.” — Q2 10‑Q MD&A .
• Going‑concern risk: “If the Company is unable to consummate the Merger or obtain additional capital in the very near term, it will be forced to cease operations, liquidate its assets and pursue the winding down and dissolution of the Company.” — Q2 10‑Q .

Q&A Highlights

• Financing runway and dilution: Management highlighted July ELOC proceeds (~$3.8M) and extended runway beyond Q2 2026; investors will weigh dilution from ELOC and revised Decoy ownership/anti‑dilution terms .
• Nasdaq milestones and reverse split mechanics: Extensions require mid/late‑Aug compliance; shareholders approved split parameters and exchange cap removal to facilitate compliance .
• R&D prioritization: Company is curtailing internal sponsored trials and relying on MDACC’s investigator‑initiated data to guide next steps, aligning spend with liquidity constraints .
• Merger closing conditions: Qualified Financing of ≥$6.0M and continued Nasdaq listing remain conditions; processes and timing uncertainties persist .

Estimates Context

• Wall Street consensus estimates via S&P Global for EPS, revenue, and EBITDA for Q2 2025 and the prior two quarters were unavailable; as a result, beats/misses versus consensus cannot be assessed (Primary EPS Consensus Mean, Revenue Consensus Mean, EBITDA Consensus Mean: N/A*).
• Target price and recommendation data were also unavailable for these periods (Target Price Consensus Mean, Consensus Recommendation (Text): N/A*).
  Values retrieved from S&P Global.*

Key Takeaways for Investors

• Liquidity improved post‑quarter via ELOC, extending runway, but quarter‑end metrics still reflected negative equity and working capital; capital access (ATM/ELOC) remains a critical lever .
• Near‑term stock catalysts include Nasdaq compliance milestones (mid/late‑Aug), reverse split execution, and merger closing steps; failure to meet milestones risks delisting and potential dissolution .
• Dilution risk has increased: revised ownership to ~92.4% Decoy / ~7.6% Salarius and anti‑dilution protections on preferred shares could pressure common equity outcomes in subsequent financings .
• Operating burn is lower, with opex down year over year; management is prioritizing external clinical readouts (MDACC) over internal trials, which may slow proprietary data generation but conserves cash .
• Strategic pivot toward Decoy’s AI/ML peptide‑conjugate antiviral/oncology pipeline offers a new thesis; credibility strengthened by SAB additions and broad antiviral scope, but execution and financing remain key .
• With no revenue and persistent going‑concern disclosures, position sizing should reflect binary outcomes around financing and listing status; trade around regulatory milestones and merger progress.
• Absent sell‑side consensus, internal benchmarks should focus on cash, equity capitalization, milestone timing, and dilution math until coverage resumes or new data catalysts emerge .