COVER PAGE
COVER PAGE - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 18, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 001-36812 | ||
Entity Registrant Name | SALARIUS PHARMACEUTICALS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 46-5087339 | ||
Entity Address, Address Line One | 2450 Holcombe Blvd | ||
Entity Address, Address Line Two | Suite X | ||
Entity Address, City or Town | Houston | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 77021 | ||
City Area Code | 832 | ||
Local Phone Number | 834-6992 | ||
Title of 12(b) Security | Common Stock, par value $ 0.0001 | ||
Trading Symbol | SLRX | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 47,291,038 | ||
Entity Common Stock, Shares Outstanding | 46,697,194 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Central Index Key | 0001615219 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement for its 2021 Annual Meeting of Stockholders, which will be filed with the United States Securities and Exchange Commission within 120 days of December 31, 2020, are incorporated by reference into Part III of this Annual Report on Form 10-K. |
AUDIT INFORMATION
AUDIT INFORMATION | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Firm ID | 42 |
Auditor Name | Ernst & Young LLP |
Auditor Location | Houston, Texas |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 29,214,380 | $ 11,118,614 |
Grants receivable from CPRIT | 0 | 3,855,996 |
Prepaid expenses and other current assets | 949,215 | 822,050 |
Total current assets | 30,163,595 | 15,796,660 |
Grants receivable from CPRIT | 1,610,490 | 0 |
Property and equipment, net | 7,880 | 22,639 |
Goodwill | 8,865,909 | 8,865,909 |
Other assets | 185,994 | 247,113 |
Total assets | 40,833,868 | 24,932,321 |
Current liabilities: | ||
Accounts payable | 1,543,096 | 1,853,756 |
Accrued expenses and other current liabilities | 553,269 | 383,138 |
Note payable | 0 | 477,028 |
Warrant liability | 14,518 | 59,211 |
Total liabilities | 2,110,883 | 2,773,133 |
Commitments and contingencies (NOTE 5) | ||
Stockholders' equity (deficit): | ||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, $0.0001 par value; 100,000,000 shares authorized; 45,241,808 and 23,810,541 shares issued at December 31, 2021 and December 31, 2020, and 45,241,808 and 23,808,546 shares outstanding at December 31, 2021 and December 31, 2020, respectively | 4,524 | 2,381 |
Additional paid-in capital | 70,915,653 | 41,585,761 |
Accumulated deficit | (32,197,192) | (19,428,954) |
Total stockholders' equity | 38,722,985 | 22,159,188 |
Total liabilities and stockholders' equity | $ 40,833,868 | $ 24,932,321 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 45,241,808 | 23,810,541 |
Common stock, shares outstanding | 45,241,808 | 23,808,546 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Revenue from contract with customer, product and service | Grant [Member] | Grant [Member] |
Grant revenue | $ 1,840,216 | $ 5,233,301 |
Operating expenses: | ||
Research and development | 8,548,520 | 6,913,853 |
General and administrative | 6,104,627 | 6,105,793 |
Total operating expenses | 14,653,147 | 13,019,646 |
Loss before other income (expense) | (12,812,931) | (7,786,345) |
Change in fair value of warrant liability | 44,693 | 258,551 |
Government grants and other income | 0 | 175,540 |
Net loss | (12,768,238) | (7,352,254) |
Fair value increase related to warrant modification | 0 | (396,407) |
Loss attributable to common stockholders | $ (12,768,238) | $ (7,748,661) |
Loss per common share — basic and diluted | ||
Loss per common share, basic ( in dollar per share) | $ (0.31) | $ (0.50) |
Loss per common share, diluted ( in dollar per share) | (0.31) | (0.50) |
Total net loss per share ( in dollar per share) | $ (0.31) | $ (0.50) |
Weighted average number of shares outstanding, basic (in shares) | 41,365,955 | 15,578,611 |
Weighted average number of shares outstanding, diluted (in shares) | 41,365,955 | 15,578,611 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities | ||
Net loss | $ (12,768,238) | $ (7,352,254) |
Adjustments to reconcile net loss to net cash (used in) operating activities: | ||
Depreciation, amortization and impairment | 19,183 | 18,058 |
Equity-based compensation expense | 559,044 | 319,391 |
Change in fair value of warrant liability | (44,693) | (258,551) |
Changes in operating assets and liabilities: | ||
Grants receivable | 2,245,506 | (3,855,996) |
Prepaid expenses and other current assets | (70,470) | 1,140,117 |
Accounts payable | (310,660) | (2,782) |
Accrued expenses and other current liabilities | 170,131 | 222,355 |
Deferred revenue | 0 | (541,701) |
Net cash used in operating activities | (10,200,197) | (10,311,363) |
Investing activities | ||
Purchase of property and equipment | 0 | (2,600) |
Net cash used in investing activities | 0 | (2,600) |
Financing activities | ||
Proceeds from issuance of equity securities | 27,287,638 | 14,798,944 |
Warrants exercised for cash | 1,485,353 | 3,869,168 |
Payments on note payable | (477,028) | (974,435) |
Net cash provided by financing activities | 28,295,963 | 17,693,677 |
Net increase in cash, cash equivalents and restricted cash | 18,095,766 | 7,379,714 |
Cash, cash equivalents and restricted cash at beginning of period | 11,118,614 | 3,738,900 |
Cash, cash equivalents and restricted cash at end of period | 29,214,380 | 11,118,614 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 1,468 | 8,663 |
Non-cash investing and financing activities: | ||
Change in accrued capital expenditures | 0 | 8,657 |
Accrued issuance costs for warrants exercised for cash | 0 | 56,915 |
Prepaid expense financed by note payable | $ 949,131 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Total | Common Stock | Preferred Stock | Additional Paid-In Capital | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2019 | 4,511,174 | 0 | |||
Beginning balance at Dec. 31, 2019 | $ 10,580,854 | $ 451 | $ 0 | $ 22,657,103 | $ (12,076,700) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of equity securities, net (in shares) | 13,483,870 | 1,246,519 | |||
Issuance of equity securities, net | 14,798,944 | $ 1,348 | $ 125 | 14,797,471 | |
Preferred shares converted to common shares (in shares) | 1,246,519 | (1,246,519) | |||
Preferred shares converted to common shares | 0 | $ 125 | $ (125) | 0 | |
Warrants exercised for cash, net (in shares) | 4,517,910 | ||||
Warrants exercised for cash | 3,812,253 | $ 452 | 3,811,801 | ||
Equity-based compensation and services expense (in shares) | 30,509 | ||||
Equity-based compensation and services expense | 269,393 | $ 3 | 269,390 | ||
Issuance of equity securities for services (in shares) | 18,564 | ||||
Issuance of equity securities for services | 49,998 | $ 2 | 49,996 | ||
Modification of warrants exercise prices and terms | 396,407 | 396,407 | |||
Increase in fair value for warrants modification | (396,407) | (396,407) | |||
Net loss | (7,352,254) | (7,352,254) | |||
Ending balance (in shares) at Dec. 31, 2020 | 23,808,546 | 0 | |||
Ending balance at Dec. 31, 2020 | 22,159,188 | $ 2,381 | $ 0 | 41,585,761 | (19,428,954) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of equity securities, net (in shares) | 20,054,556 | ||||
Issuance of equity securities, net | 27,287,638 | $ 2,006 | 27,285,632 | ||
Warrants exercised for cash, net (in shares) | 1,298,567 | ||||
Warrants exercised for cash | 1,485,353 | $ 130 | 1,485,223 | ||
Equity-based compensation and services expense (in shares) | 73,951 | ||||
Equity-based compensation and services expense | 559,044 | $ 7 | 559,037 | ||
Issuance of equity securities for services (in shares) | 6,188 | ||||
Increase in fair value for warrants modification | 0 | ||||
Net loss | (12,768,238) | (12,768,238) | |||
Ending balance (in shares) at Dec. 31, 2021 | 45,241,808 | 0 | |||
Ending balance at Dec. 31, 2021 | $ 38,722,985 | $ 4,524 | $ 0 | $ 70,915,653 | $ (32,197,192) |
ORGANIZATION AND OPERATIONS
ORGANIZATION AND OPERATIONS | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND OPERATIONS | ORGANIZATION AND OPERATIONS Nature of Business Salarius Pharmaceuticals, Inc. (“Salarius” or the “Company”), together with its subsidiaries, Salarius Pharmaceuticals, LLC, Flex Innovation Group LLC, and TK Pharma, Inc., is a clinical-stage biotechnology company focused on developing effective epigenetic-based cancer treatments for indications with high unmet medical need. Salarius’ lead epigenetic enzyme technology was licensed from the University of Utah Research Foundation in 2011. The Company is located in Houston, Texas. The Company merged with Flex Pharma, Inc. ("Flex Pharma") on July 19, 2019 through a reverse acquisition, Flex Pharma was renamed Salarius Pharmaceuticals, Inc. after the merger. Going Concern Salarius has no products approved for commercial sale, has not generated any revenue from product sales to date and has suffered recurring losses from operations since its inception. The lack of revenue from product sales to date and recurring losses from operations since its inception raise substantial doubt as to the Company's ability to continue as a going concern. The accompanying financial statements are prepared using accounting principles generally accepted in the United States applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities should the Company be unable to continue as a going concern. Salarius will require substantial additional capital to fund its research and development expenses related to its oncology drug. Based on Salarius’ expected cash requirements, Salarius believes that there is doubt that its existing cash and cash equivalents, will be sufficient to fund its operations through one year from the financial statements issuance date. The Company intends to obtain additional capital through the sale of equity securities in one or more offerings or through issuances of debt instruments, and may also consider new collaborations or selectively partnering its technology. However, the Company cannot provide any assurance that it will be successful in accomplishing any of its plans. Risks Related to Covid-19 Pandemic The COVID-19 pandemic is significantly affecting the United States, global economies, and businesses worldwide. While the potential magnitude and duration of the economic and social impact of the COVID-19 pandemic is difficult to assess or predict, the impact on the global financial markets may, in the future, reduce our ability to access capital, which could negatively impact our short-term and long-term liquidity. At this time we are experiencing minimal disruption to our clinical trials. However, our ongoing Phase 1/2 Ewing sarcoma clinical trial and Phase 1/2 AST clinical trial may encounter delays in enrolling new patients due to concerns or healthcare resource constraints because of the COVID-19 pandemic. |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States ("GAAP"). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standard Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB"). The Company considered its going concern disclosure requirements in accordance with ASC 205-40-50.The Company has performed an analysis and concluded substantial doubt exists with respect to the Company being able to continue as a going concern through one year from the date of issuance of the consolidated financial statements for the year ended December 31, 2021. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America as defined by the FASB ASC requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Reclassification Certain reclassifications of prior period presentations have been made to conform to the current period presentation. Cash and Cash Equivalents Salarius considers all highly-liquid investments with original maturities of three months or less to be cash equivalents. The Company maintains several bank accounts including an interest-bearing account for funds received from Cancer Prevention and Research Institution of Texas ("CPRIT"). Intangibles Intangible assets that have finite useful lives are amortized over their useful lives, and are reviewed for impairment when warranted by economic conditions. Intangible assets are included in other assets in the Company's Consolidated Balance Sheets. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. There were no impairment charges related to long-lived assets during the twelve months ended December 31, 2021 and 2020. Goodwill Goodwill is not amortized, but is tested at least annually for impairment at the reporting unit level. The Company has determined that the reporting unit is the single operating segment disclosed in its current financial statements. Additional impairment assessments may be performed on an interim basis if the Company encounters events or changes in circumstances that would indicate that, more likely than not, the carrying value of goodwill has been impaired. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The Company utilizes the option to perform a qualitative assessment for its reporting unit and if the Company concludes it is more likely than not that the fair value of the reporting unit is less than its carrying amount, then the Company utilizes the two-step quantitative assessment. The Company’s qualitative assessment is sensitive to assumptions related to potential adverse events and circumstances, including current market trends in control premiums and involves judgement in determining comparable peer companies to include in the control premium evaluation. Many of the events and circumstances evaluated in determining whether it is more likely than not that goodwill is impaired are outside of the Company’s control and could change in future periods. There was no impairment of goodwill in 2021 or 2020. Financial Instruments and Credit Risks Financial instruments that potentially subject the Company to credit risk include cash and cash equivalents and restricted cash. Cash is deposited in demand accounts in federally insured domestic institutions to minimize risk. Insurance is provided through the Federal Deposit Insurance Corporation (“FDIC”). Although the balances in these accounts exceed the federally insured limit from time to time, the Company has not incurred losses related to these deposits. Warrants The Company determines whether warrants should be classified as a liability or equity. For warrants classified as liabilities, the Company estimates the fair value of the warrants at each reporting period using Level 3 inputs with changes in fair value recorded in the Consolidated Statement of Operations within change in fair value of warrant liability. The estimates in valuation models are based, in part, on subjective assumptions, including but not limited to stock price volatility, the expected life of the warrants, the risk-free interest rate and the fair value of the common stock underlying the warrants, and could differ materially in the future. The Company will continue to adjust the fair value of the warrant liability at the end of each reporting period for changes in fair value from the prior period until the earlier of the exercise or expiration of the applicable warrant. For warrants classified as equity contracts, the Company allocates the transaction proceeds to the warrants and any other free-standing instruments issued in the transaction based on an allowable allocation method. Clinical Trial Accruals The Company’s preclinical and clinical trials are performed by third party contract research organizations (CROs) and/or clinical investigators, and clinical supplies are manufactured by contract manufacturing organizations (CMOs). Invoicing from these third parties may be monthly based upon services performed or based upon milestones achieved. The Company accrues these expenses based upon its assessment of the status of each clinical trial and the work completed, and upon information obtained from the CROs and CMOs. The Company’s estimates are dependent upon the timeliness and accuracy of data provided by the CROs and CMOs regarding the status and cost of the studies, and may not match the actual services performed by the organizations. This could result in adjustments to the Company’s research and development expenses in future periods. To date the Company has had no significant adjustments. Grants Receivable and Revenue Recognition Salarius’ source of revenue has been from a grant received from CPRIT. Grant revenue is recognized when qualifying costs are incurred and there is reasonable assurance that conditions of the grant have been met. Cash received from grants in advance of incurring qualifying costs is recorded as deferred revenue and recognized as revenue when qualifying costs are incurred. The Company records revenue and a corresponding grants receivable when qualifying costs are incurred before the grants are received. Research and Development Costs Research and development costs consist of expenses incurred in performing research and development activities, including pre-clinical studies and clinical trials. Research and development costs include salaries and personnel-related costs, consulting fees, fees paid for contract research services, the costs of laboratory equipment and facilities, license fees and other external costs. Research and development costs are expensed when incurred. Equity-Based Compensation Salarius measures equity-based compensation based on the grant date fair value of the awards and recognizes the associated expense in the financial statements over the requisite service period of the award, which is generally the vesting period. The Company uses the Black-Scholes option valuation model to estimate the fair value of the stock-based compensation and incentive units. Assumptions utilized in these models include expected volatility calculated based on implied volatility from traded stocks of peer companies, dividend yield and risk-free interest rate. Additionally, forfeitures are accounted for in compensation cost as they occur. Loss Per Share Basic net loss per share is calculated by dividing the net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Since the Company was in a loss position for all periods presented, diluted net loss per share is the same as basic net loss per share for all periods, as the inclusion of all potential common shares outstanding is anti-dilutive. The number of anti-dilutive shares, consisting of common shares underlying (i) common stock options, (ii) stock purchase warrants, (iii) unvested restricted stock and (iv) rights entitling holders to receive warrants to purchase the Company's common shares, which have been excluded from the computation of diluted loss per share, was 9,531,198 and 10,796,149 shares as of December 31, 2021 and 2020, respectively. Income Taxes Income taxes are recorded in accordance with FASB ASC Topic 740, Income Taxes ("ASC 740"), which provides for deferred taxes using an asset and liability approach. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and the tax reporting basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets will be realized. The Company has evaluated available evidence and concluded that the Company may not realize the benefit of its deferred tax assets; therefore, a valuation allowance has been established for the full amount of the deferred tax assets. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. As of December 31, 2021 and 2020, the Company did not have any significant uncertain tax positions and no interest or penalties have been charged. The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company is subject to routine audits by taxing jurisdictions. Application of New Accounting Standards In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). The guidance eliminates certain exceptions for recognizing deferred taxes for investments, performing intra-period allocation and calculating income taxes in interim periods. This guidance also includes guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. ASU 2019-12 is effective for annual and interim periods in fiscal years beginning after December 15, 2020. The adoption of ASU 2019-12 in the first quarter of 2021 did not have a material impact on the Company’s consolidated financial statements. Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires the measurement of all expected credit losses for financial assets including trade receivables held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Subsequent to the issuance of ASU 2016-13, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses . This ASU does not change the core principle of the guidance in ASU 2016-13, instead these amendments are intended to clarify and improve operability of certain topics included within the credit losses guidance. The FASB also subsequently issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Derivatives and Hedging (Topic 815), and Financial Instruments (Topic 842) , which did not change the core |
GRANTS RECEIVABLE
GRANTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
GRANTS RECEIVABLE | GRANTS RECEIVABLEGrants receivable represents qualifying costs incurred where there is reasonable assurance that conditions of the grant have been met but the corresponding funds have not been received as of the reporting date. Grants receivable balances are $1.6 million and $3.9 million as of December 31, 2021 and December 31, 2020, respectively. Grant receivables are classified as current or non-current receivables based on the Company’s best estimate of whether or not the amounts will be collected within one year of the balance sheet date. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets at December 31, 2021 and 2020 consisted of the following: December 31, 2021 December 31, 2020 Prepaid clinical trial expenses $ 97,557 $ — Prepaid insurance 678,672 684,268 Other prepaid and current assets 172,986 137,782 Total prepaid expenses and other current assets $ 949,215 $ 822,050 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES License Agreement with the University of Utah Research Foundation In 2011, the Company entered into a license agreement with the University of Utah, under which, the Company acquired license to LSD 1. In exchange for the license, the Company issued 2% equity ownership in the Company based on a fully diluted basis at the effective date of the agreement and subject to certain adjustments specified in the agreement, granted revenue sharing rights on any resulting products or processes to commence on first commercial sale, and milestone payments based upon regulatory approval of any resulting product or process as well as on the second anniversary of first commercial sale. Cancer Prevention and Research Institute of Texas In June 2016, the Company entered into a Cancer Research Grant Contract with CPRIT. Pursuant to the contract, CPRIT awarded the Company a grant up to $18.7 million, further modified to $16.1 million to fund development of LSD 1 inhibitor. This is a 3-year grant award originally expired on May 31, 2019. The grant now expires on May 31, 2022. The Company will retain ownership over any intellectual property developed under the contract ("Project Result"). With respect to non-commercial use of any Project Result, the Company agreed to grant to CPRIT a nonexclusive, irrevocable, royalty-free, perpetual, worldwide license with right to sublicense any necessary additional intellectual property rights to exploit all Project Results by CPRIT, other governmental entities and agencies of the State of Texas, and private or independent institutions of higher education located in Texas, for education, research and other non-commercial purposes. The Company is obligated to make revenue-sharing payments to CPRIT with respect to net sales of any product covered by the contract, up to a maximum repayment of certain percentage of the aggregate amount paid to the Company by CPRIT under the CPRIT contract. The payments are determined as a percentage of net sales, which may be reduced if the Company is required to obtain a license from a third party to sell any such product. In addition, upon meeting the foregoing limitation on revenue-sharing payments, the Company agreed to make continued revenue-sharing payments to CPRIT of less than 1% of net sales. At December 31, 2021 and December 31, 2020, the Company had grants receivable of $1.6 million and $3.9 million, respectively, related to CPRIT contract. Lease Agreement The Company presently leases office space under operating lease agreements on a month to month basis. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last is considered unobservable, are used to measure fair value: Level 1-Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2-Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3-Significant unobservable inputs including Salarius’ own assumptions in determining fair value. The Company believes the recorded values of its financial instruments, including cash and cash equivalents, accounts payable and note payable approximate their fair values due to the short-term nature of these instruments. The following table sets forth a summary of changes in the fair value of Level 3 liabilities, the warrants associated with the Flex Pharma merger measured at fair value on a recurring basis for the twelve months ended December 31, 2021 and 2020: Description Balance at December 31, 2020 Change in Fair Value Balance at December 31, 2021 Warrant liability $ 59,211 $ (44,693) $ 14,518 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY Preferred Stock and Common Stock On February 11, 2020, the Company completed a public offering with total gross proceeds of approximately $11.0 million, which includes the full exercise of the underwriter's over-allotment option to purchase an additional 1,252,173 shares and warrants prior to deducting underwriting discounts and commissions and offering expenses payable by Salarius (the “February Offering”). The February Offering was comprised of 7,101,307 Class A units, priced at a public offering price of $1.15 per unit, with each unit consisting of one share of common stock and a five-year warrant to purchase one share of common stock at an exercise price of $1.15 per share, and 1,246,519 Class B units, priced at a public offering price of $1.15 per unit, with each unit consisting of one share of Series A convertible preferred stock and a five-year warrant to purchase one share of common stock with and exercise price of $1.15 per share. A total of 8,343,480 shares of common stock, 1,246,519 shares of Series A convertible preferred stock, and warrants to purchase up to 9,599,999 shares of common stock were issued in the offering, including the full exercise of the over-allotment option. The exercise price of the warrants are fixed and do not contain any variable pricing features or any price based anti-dilutive features. All Series A preferred stock was converted to common stock prior to December 31, 2020. As discussed above, in connection with the February 2020 Offering, the Company issued five-year warrants to purchase one share of common stock at an exercise price of $1.15 per share (each a "warrant"). On December 11, 2020, the Company entered into warrant exercise inducement offer letters (“Inducement Letters”) with certain holders of 3,964,065 Warrants (collectively, the “Exercising Holders”) pursuant to which such holders agreed to exercise on December 11, 2020 for cash, their Warrants to purchase 3,964,065 shares of Common Stock in exchange for the Company’s agreement to (i) lower the exercise price of the Warrants held by the Exercising Holders to $0.90 and (ii) issue new warrants (the “Inducement Warrants”) to purchase up to 3,964,065 shares of Common Stock. Each Inducement Warrant is exercisable at a price per share of $1.182 and expires on June 11, 2026. As of December 31, 2021, there was 3,964,065 inducement warrants and 3,783,522 warrants from February 2020 Offering were still outstanding, respectively. On August 3, 2020, the Company completed a public offering of 5,130,390 shares of its common stock at a price of $1.20 per share. Total gross proceeds were approximately $6.2 million, prior to deducting underwriting discounts and commissions and offering expenses payable by the Company. On February 5, 2021, the Company entered into an At the Market Offering Agreement ("ATM") with Ladenburg Thalmann & Co. Inc. Under this agreement the Company is able to issue and sell, from time to time, shares of its common stock. On February 5, 2021 and July 2, 2021, the Company filed prospectus supplements with the SEC to register the offering and sale of Common Stock having an aggregate offering price of up to $6.3 million and $25.0 million, respectively. During the twelve months ended December 31, 2021, the Company issued 3,247,834 shares under the ATM for gross proceeds of $6.8 million. On March 8, 2021, the Company completed a public offering of 16,806,722 shares of its common stock at a price to the public of $1.3685 per share. Total gross proceeds from the offering were approximately $23.0 million prior to deducting underwriting discounts and commissions and offering expenses payable by the Company. Warrants Exercised for Cash During the twelve months ended December 31, 2021 and 2020, the Company issued 1,298,567 and 4,517,910 common shares as a result of warrant exercises, and received cash proceeds of approximately $1.5 million and $3.9 million, respectively. Right to Warrants On January 3, 2019, Flex Pharma, Private Salarius and Merger Sub entered into the Merger Agreement. Pursuant to the Merger Agreement, Flex Pharma distributed one right per share of common stock to stockholders of record as of the close of business on July 18, 2019. Each right entitles such stockholders to receive a warrant to purchase the Company's common shares on January 20, 2020. These warrants were issued on July 1, 2021 and are exercisable in the aggregate, into 142,711 shares of the Company's common stock with a 5-year term from January 20, 2020, at an exercise price of $15.17 per share. The warrants are subject to a cashless exercise, at the option of the Company, at the closing of an issuance and sale of the Company’s common stock in certain qualified financing, upon the closing of which the holders of warrants shall be entitled to receive a number of shares of common stock equal to the greater of two formulae defined by the Merger Agreement, which are based on the volume weighted average price of the Company's common stock during the 10 consecutive trading days ending on the trading day immediately preceding the date of exercise. As a result, the warrants have been classified as a liability. The Company accounted for these warrants at fair value using Level 3 inputs. The Company determined the fair value of this warrant liability using a Black-Scholes valuation model. Using this method, unobservable inputs included the Company’s equity value, expected timing of possible outcomes, risk free interest rates and stock price volatility. Variables used in the Black-Scholes model are as follows: December 31, 2021 December 31, 2020 Discount rate 0.97 % 0.27 % Expected life (years) 3.06 years 4.06 years Expected volatility 125.58 % 130.56 % Expected dividend — % — % Wedbush Warrant On July 19, 2019, upon the closing of the merger, the Company elected to issue warrants to purchase 42,928 common shares to Wedbush Securities Inc. ("Wedbush") to satisfy $0.5 million of the $1.0 million success fee payable to Wedbush at the closing of the merger. The remaining $0.5 million success fee was paid in cash. These warrants have an exercise price of $18.90 and a 5-year term. As of December 31, 2021, all warrants issued to Wedbush were outstanding. |
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
EQUITY-BASED COMPENSATION | EQUITY-BASED COMPENSATION Equity Incentive Plans The Company has granted options to employees, directors, and consultants under the 2015 Equity Incentive Plan (the "2015 Plan"). The 2015 Plan provides for the grant of incentive stock options ("ISOs"), nonstatutory stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance-based stock awards and other stock-based awards. Additionally, the 2015 Plan provides for the grant of performance-based cash awards. ISOs may be granted only to the Company's employees. All other awards may be granted to the Company's employees, including officers, and to non-employee directors and consultants. As of December 31, 2021 and 2020, there were 1,026,690 and 108,348 shares, respectively, remaining available for the grant of stock option under the 2015 Plan. During the twelve months ended December 31, 2021 and 2020, the Company awarded 79,000 and 1,468,118, respectively, stock options to its employees and directors, pursuant to the plan described above. Stock options generally vest over one The fair value of the option grants of $92,191 and $1,196,469 respectively, has been estimated with the following assumptions for the year ended December 31, 2021 and 2020: 2021 2020 Risk-free interest rate 0.93%-1.09% 0.28%-0.555% Volatility 130.44%-133.35% 113.17%-130.41% Expected life (years) 6 years 5-6 years Expected dividend yield 0.00% 0.00% The following table summarizes stock option activity for employees and non-employees for the twelve months ended December 31, 2021 and 2020: Shares Weighted-Average Weighted-Average Aggregate Outstanding at December 31, 2019 166,233 $ 34.42 6.53 $ — Granted 1,468,118 0.93 Exercised — — Forfeited 36,613 — Expired 33,766 — Outstanding at December 31, 2020 1,563,972 $ 2.44 4.87 $ 175,770 Exercisable at December 31, 2020 73,975 $ 35.89 5.41 $ — Granted 79,000 $ 1.02 Exercised — Forfeited 45,000 Expired — Outstanding at December 31, 2021 1,597,972 $ 2.75 8.50 $ — Exercisable at December 31, 2021 683,346 $ 4.85 8.21 $ — As of December 31, 2021 and 2020, there was approximately $0.9 million and $1.3 million of total unrecognized compensation cost, respectively, related to unvested stock options. Total unrecognized compensation cost will be adjusted for future changes in employee and non-employee forfeitures, if any. The Company expects to recognize that cost over a remaining weighted-average period of 2.22 years. During the year ended December 31, 2020, the Company granted 1,468,118 stock options, in the aggregate, to certain employees, directors. These awards vest monthly over 5 months to 4 years as continuous services are provided, and expense is being recognized over this period. Total compensation cost related to stock options were $0.2 million for the year ended December 31, 2020. During the year ended December 31, 2021, the Company granted 79,000 stock options, in the aggregate, to certain employees. These award vest over 4 years as continuous services are provided, and expense is being recognized over this period. Total compensation cost related to stock options were $0.5 million for the year ended December 31, 2021 During the year ended December 31, 2021, the Company granted 73,951 shares of common stock to its Employee Stock Purchase Plan ("ESPP") participants. Fair value of the grants are valued using the Black-Scholes option pricing model and compensation cost is recognized based on the resulting value over the derived service period. |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | INCOME TAXThe Company has no current or deferred tax expense due to its current year loss and its overall net operating loss position. A reconciliation of the federal statutory tax rate and the effective tax rates for the year ended December 31, 2021 and 2020 is as follows: December 31 2021 2020 Federal Tax at Statutory Rate 21.00% 21.00% Permanent (0.69)% 0.63% Change in Valuation Allowance (26.13)% (25.65)% Other items —% (0.40)% R&D Credit 5.82% 4.42% Effective Tax Rate —% —% The tax effects of temporary differences that give rise to significant portions of the deferred tax assets were as follows: December 31 2021 2020 Capitalized R&D Expenses $ 3,002,819 $ 1,725,015 Other Deferred Items 121,152 87,432 Stock Compensation 50,650 28,048 Net Operating Loss - US 1,931,959 673,186 R&D Credits 1,068,451 325,329 Net deferred tax assets 6,175,031 2,839,010 Valuation Allowance (6,175,031) (2,839,010) Net deferred tax assets (liabilities) $ — $ — The valuation allowance recorded by the Company as of December 31, 2020 and December 31, 2021 resulted from the uncertainties of the future utilization of deferred tax assets caused by the lack of future taxable income. The deferred tax asset was reviewed for expected utilization using a “more likely than not” approach by assessing the available positive and negative evidence surrounding its recoverability. Accordingly, a full valuation allowance continues to be recorded against the Company’s deferred tax asset, as it was determined based upon past and projected future losses that it was “more likely than not” that the Company’s deferred tax assets would not be realized. In future years, if the deferred tax assets are determined by management to be “more likely than not” to be realized, the recognized tax benefits relating to the reversal of the valuation allowance will be recorded. The Company will continue to assess and evaluate strategies that will enable the deferred tax asset, or portion thereof, to be utilized, and will reduce the valuation allowance appropriately as such time when it is determined that the “more likely than not” criteria is satisfied. The federal net operating loss carryforwards of $9.2 million have an indefinite life, but the R&D credits of $1.1 million begin to expire in 2039. Due to the change in ownership provisions of the Internal Revenue Code, the availability of the Company’s net operating loss carry forwards could be subject to annual limitations against taxable income in future periods, which could substantially limit the eventual utilization of such carry forwards. The Company has not analyzed the historical or potential impact of its equity financings on beneficial ownership and therefore no determination has been made whether the net operating loss carry forward is subject to any Internal Revenue Code Section 382 limitation. To the extent there is a limitation, there could be a reduction in the deferred tax asset with an offsetting reduction in the valuation allowance. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On January 12, 2022, the Company, entered into an Acquisition and Strategic Collaboration Agreement (the “ASCA”), effective January 12, 2022 (the “Effective Date”), with DeuteRx, LLC, a Delaware limited liability company (the “Seller”), pursuant to which the Seller agreed to sell, and Company agreed to purchase and assume from Seller, all of Seller’s rights, title, and interest in and to certain assets of the Seller, including the development product currently referred to as DRX-164 (the “Product”), Seller’s intellectual property, information and data related to the Product, tangible materials or reagents related to the Product, goodwill, rights and claims, other than certain excluded assets (collectively, the “Purchased Assets”), all as more specifically set forth in the ASCA, and assume certain Assumed Liabilities (as defined in the ASCA), upon the terms and subject to the conditions set forth in the ASCA. Contemporaneous with the execution of the ASCA, the Seller and Company entered into a R&D Services Agreement (as defined in the ASCA), which sets forth the terms and conditions upon which Seller will provide services to Company, including the implementation and performance of a Non-Clinical and Clinical Development Scope of Work (collectively, the “Transaction”). The Purchased Assets were purchased for an aggregate purchase price of $1,500,000 (the “Cash Payment”) and the delivery of one million (1,000,000) shares of the Company’s common stock (the “Shares” and together with the Cash Payment, the “Purchase Price”). In addition to the Purchase Price for the Purchased Assets, the Company agreed to pay to Seller (i) Milestone Payments (as defined in the ASCA) upon the occurrence of an applicable Milestone Event (as defined in the ASCA) and (ii) Royalty Payments (as defined in the ASCA). All cost related to the transaction will be immediately expensed in 2022 as acquired in-process research and development expenses since the Product has not yet achieved regulatory approval and, absent obtaining such approval, has no alternative future use. A member of the Company’s Board of Directors also serves as a consultant to the Seller and is employed by an affiliate of the Seller. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States ("GAAP"). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standard Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB"). The Company considered its going concern disclosure requirements in accordance with ASC 205-40-50.The Company has performed an analysis and concluded substantial doubt exists with respect to the Company being able to continue as a going concern through one year from the date of issuance of the consolidated financial statements for the year ended December 31, 2021. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America as defined by the FASB ASC requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. |
Reclassification | ReclassificationCertain reclassifications of prior period presentations have been made to conform to the current period presentation. |
Cash and Cash Equivalents | Cash and Cash Equivalents Salarius considers all highly-liquid investments with original maturities of three months or less to be cash equivalents. |
Intangibles | Intangibles Intangible assets that have finite useful lives are amortized over their useful lives, and are reviewed for impairment when warranted by economic conditions. Intangible assets are included in other assets in the Company's Consolidated Balance Sheets. |
Impairment of Long-Lived Assets | Impairment of Long-Lived AssetsLong-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. |
Goodwill | Goodwill Goodwill is not amortized, but is tested at least annually for impairment at the reporting unit level. The Company has determined that the reporting unit is the single operating segment disclosed in its current financial statements. Additional impairment assessments may be performed on an interim basis if the Company encounters events or changes in circumstances that would indicate that, more likely than not, the carrying value of goodwill has been impaired. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The Company utilizes the option to perform a qualitative assessment for its reporting unit and if the Company concludes it is more likely than not that the fair value of the reporting unit is less than its carrying amount, then the Company utilizes the two-step quantitative assessment. The Company’s qualitative assessment is sensitive to assumptions related to potential adverse events and circumstances, including current market trends in control premiums and involves judgement in determining comparable peer companies to include in the control premium evaluation. Many |
Financial Instruments and Credit Risks | Financial Instruments and Credit Risks Financial instruments that potentially subject the Company to credit risk include cash and cash equivalents and restricted cash. Cash is deposited in demand accounts in federally insured domestic institutions to minimize risk. Insurance is provided through the Federal Deposit Insurance Corporation (“FDIC”). Although the balances in these accounts exceed the federally insured limit from time to time, the Company has not incurred losses related to these deposits. |
Warrants | Warrants The Company determines whether warrants should be classified as a liability or equity. For warrants classified as liabilities, the Company estimates the fair value of the warrants at each reporting period using Level 3 inputs with changes in fair value recorded in the Consolidated Statement of Operations within change in fair value of warrant liability. The estimates in valuation models are based, in part, on subjective assumptions, including but not limited to stock price volatility, the expected life of the warrants, the risk-free interest rate and the fair value of the common stock underlying the warrants, and could differ materially in the future. The Company will continue to adjust the fair value of the warrant liability at the end of each reporting period for changes in fair value from the prior period until the earlier of the exercise or expiration of the applicable warrant. For warrants classified as equity contracts, the Company allocates the transaction proceeds to the warrants and any other free-standing instruments issued in the transaction based on an allowable allocation method. |
Grants Receivable and Revenue Recognition | Grants Receivable and Revenue RecognitionSalarius’ source of revenue has been from a grant received from CPRIT. Grant revenue is recognized when qualifying costs are incurred and there is reasonable assurance that conditions of the grant have been met. Cash received from grants in advance of incurring qualifying costs is recorded as deferred revenue and recognized as revenue when qualifying costs are incurred. The Company records revenue and a corresponding grants receivable when qualifying costs are incurred before the grants are received. |
Research and Development Costs | Research and Development Costs Research and development costs consist of expenses incurred in performing research and development activities, including pre-clinical studies and clinical trials. Research and development costs include salaries and personnel-related costs, consulting fees, fees paid for contract research services, the costs of laboratory equipment and facilities, license fees and other external costs. Research and development costs are expensed when incurred. |
Equity-Based Compensation | Equity-Based Compensation Salarius measures equity-based compensation based on the grant date fair value of the awards and recognizes the associated expense in the financial statements over the requisite service period of the award, which is generally the vesting period. |
Loss Per Share | Loss Per Share Basic net loss per share is calculated by dividing the net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Since the Company was in a loss position for all periods presented, diluted net loss per share is the same as basic net loss per share for all periods, as the inclusion of all potential common shares outstanding is anti-dilutive. |
Income Taxes | Income Taxes Income taxes are recorded in accordance with FASB ASC Topic 740, Income Taxes ("ASC 740"), which provides for deferred taxes using an asset and liability approach. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and the tax reporting basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets will be realized. The Company has evaluated available evidence and concluded that the Company may not realize the benefit of its deferred tax assets; therefore, a valuation allowance has been established for the full amount of the deferred tax assets. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. As of December 31, 2021 and 2020, the Company did not have any significant uncertain tax positions and no interest or penalties have been charged. The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company is subject to routine audits by taxing jurisdictions. |
Application of New Accounting Standards and Pronouncements Not Yet Adopted | Application of New Accounting Standards In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). The guidance eliminates certain exceptions for recognizing deferred taxes for investments, performing intra-period allocation and calculating income taxes in interim periods. This guidance also includes guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. ASU 2019-12 is effective for annual and interim periods in fiscal years beginning after December 15, 2020. The adoption of ASU 2019-12 in the first quarter of 2021 did not have a material impact on the Company’s consolidated financial statements. Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires the measurement of all expected credit losses for financial assets including trade receivables held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Subsequent to the issuance of ASU 2016-13, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses . This ASU does not change the core principle of the guidance in ASU 2016-13, instead these amendments are intended to clarify and improve operability of certain topics included within the credit losses guidance. The FASB also subsequently issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Derivatives and Hedging (Topic 815), and Financial Instruments (Topic 842) , which did not change the core |
Fair Value of Financial Instruments | Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last is considered unobservable, are used to measure fair value: Level 1-Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2-Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3-Significant unobservable inputs including Salarius’ own assumptions in determining fair value. The Company believes the recorded values of its financial instruments, including cash and cash equivalents, accounts payable and note payable approximate their fair values due to the short-term nature of these instruments. |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets at December 31, 2021 and 2020 consisted of the following: December 31, 2021 December 31, 2020 Prepaid clinical trial expenses $ 97,557 $ — Prepaid insurance 678,672 684,268 Other prepaid and current assets 172,986 137,782 Total prepaid expenses and other current assets $ 949,215 $ 822,050 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of Changes in Fair Value of Level 3 Liabilities | The following table sets forth a summary of changes in the fair value of Level 3 liabilities, the warrants associated with the Flex Pharma merger measured at fair value on a recurring basis for the twelve months ended December 31, 2021 and 2020: Description Balance at December 31, 2020 Change in Fair Value Balance at December 31, 2021 Warrant liability $ 59,211 $ (44,693) $ 14,518 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Schedule of Variables used in Black-Scholes Model | Variables used in the Black-Scholes model are as follows: December 31, 2021 December 31, 2020 Discount rate 0.97 % 0.27 % Expected life (years) 3.06 years 4.06 years Expected volatility 125.58 % 130.56 % Expected dividend — % — % |
EQUITY-BASED COMPENSATION (Tabl
EQUITY-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Fair Value Assumptions | The fair value of the option grants of $92,191 and $1,196,469 respectively, has been estimated with the following assumptions for the year ended December 31, 2021 and 2020: 2021 2020 Risk-free interest rate 0.93%-1.09% 0.28%-0.555% Volatility 130.44%-133.35% 113.17%-130.41% Expected life (years) 6 years 5-6 years Expected dividend yield 0.00% 0.00% |
Summary of Stock Option Activity | The following table summarizes stock option activity for employees and non-employees for the twelve months ended December 31, 2021 and 2020: Shares Weighted-Average Weighted-Average Aggregate Outstanding at December 31, 2019 166,233 $ 34.42 6.53 $ — Granted 1,468,118 0.93 Exercised — — Forfeited 36,613 — Expired 33,766 — Outstanding at December 31, 2020 1,563,972 $ 2.44 4.87 $ 175,770 Exercisable at December 31, 2020 73,975 $ 35.89 5.41 $ — Granted 79,000 $ 1.02 Exercised — Forfeited 45,000 Expired — Outstanding at December 31, 2021 1,597,972 $ 2.75 8.50 $ — Exercisable at December 31, 2021 683,346 $ 4.85 8.21 $ — |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the federal statutory tax rate and the effective tax rates for the year ended December 31, 2021 and 2020 is as follows: December 31 2021 2020 Federal Tax at Statutory Rate 21.00% 21.00% Permanent (0.69)% 0.63% Change in Valuation Allowance (26.13)% (25.65)% Other items —% (0.40)% R&D Credit 5.82% 4.42% Effective Tax Rate —% —% |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets were as follows: December 31 2021 2020 Capitalized R&D Expenses $ 3,002,819 $ 1,725,015 Other Deferred Items 121,152 87,432 Stock Compensation 50,650 28,048 Net Operating Loss - US 1,931,959 673,186 R&D Credits 1,068,451 325,329 Net deferred tax assets 6,175,031 2,839,010 Valuation Allowance (6,175,031) (2,839,010) Net deferred tax assets (liabilities) $ — $ — |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Impairment charges of long-lived assets | $ 0 | $ 0 |
Impairment of goodwill | $ 0 | $ 0 |
Antidilutive securities excluded from computation of earnings per share (shares) | 9,531,198 | 10,796,149 |
GRANTS RECEIVABLE (Details)
GRANTS RECEIVABLE (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Receivables [Abstract] | ||
Grants receivable from CPRIT | $ 1.6 | $ 3.9 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid clinical trial expenses | $ 97,557 | $ 0 |
Prepaid insurance | 678,672 | 684,268 |
Other prepaid and current assets | 172,986 | 137,782 |
Total prepaid expenses and other current assets | $ 949,215 | $ 822,050 |
PREPAID EXPENSES AND OTHER CU_4
PREPAID EXPENSES AND OTHER CURRENT ASSETS - Narrative (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 31, 2020 |
Short-term Debt [Line Items] | |||
Note payable | $ 0 | $ 477,028 | |
Notes Payable to Banks | |||
Short-term Debt [Line Items] | |||
Principal amount | $ 900,000 | ||
Interest rate | 2.49% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions | Jul. 01, 2016 | Jun. 30, 2016 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2011 |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||
Award amount | $ 16.1 | $ 18.7 | |||
Award term | 3 years | ||||
Continued payments, percent of net sales | 1.00% | ||||
Grants receivable | $ 1.6 | $ 3.9 | |||
University of Utah Research Foundation | |||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||
Ownership percentage by noncontrolling Owner | 2.00% |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS - Summary of Changes in Fair Value of Level 3 Liabilities (Details) - Recurring - Level 3 | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |
Balance at December 31, 2020 | $ 59,211 |
Change in Fair Value | (44,693) |
Balance at December 31, 2021 | $ 14,518 |
STOCKHOLDERS' EQUITY - Narrativ
STOCKHOLDERS' EQUITY - Narrative (Details) | Jul. 02, 2021shares | Mar. 08, 2021USD ($)$ / sharesshares | Feb. 05, 2021shares | Aug. 03, 2020USD ($)$ / sharesshares | Feb. 11, 2020USD ($)$ / sharesshares | Jul. 19, 2019USD ($)$ / sharesshares | Jul. 18, 2019day$ / sharesshares | Dec. 31, 2021USD ($)shares | Dec. 31, 2020USD ($)shares | Jul. 01, 2021 | Feb. 11, 2021shares | Dec. 11, 2020$ / sharesshares | Feb. 29, 2020shares |
Class of Stock [Line Items] | |||||||||||||
Shares issued, value | $ | $ 6,200,000 | $ 27,287,638 | $ 14,798,944 | ||||||||||
Number of rights per share (in shares) | 1 | ||||||||||||
Expected life (years) | 3 years 21 days | 4 years 21 days | 5 years | ||||||||||
Exercise price (in dollar per share) | $ / shares | $ 15.17 | $ 1.182 | |||||||||||
Number of shares called by warrants (in shares) | 142,711 | 3,964,065 | 3,783,522 | ||||||||||
Warrants exercised for cash | $ | $ 1,485,353 | $ 3,869,168 | |||||||||||
Consecutive trading days | day | 10 | ||||||||||||
Wedbush | Satisfy success fee | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Expected life (years) | 5 years | ||||||||||||
Exercise price (in dollar per share) | $ / shares | $ 18.90 | ||||||||||||
Number of shares called by warrants (in shares) | 42,928 | ||||||||||||
Warrant value | $ | $ 500,000 | ||||||||||||
Due to related party | $ | 1,000,000 | ||||||||||||
Cash payment to related party | $ | $ 500,000 | ||||||||||||
Over-Allotment Option | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Shares issued, value | $ | $ 11,000,000 | ||||||||||||
Shares issued (in shares) | 1,252,173 | ||||||||||||
At the Market Offering Agreement | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Shares issued, value | $ | $ 6,800,000 | ||||||||||||
Shares issued (in shares) | 25,000,000 | 6,300,000 | 3,247,834 | ||||||||||
Minimum | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Exercise price (in dollar per share) | $ / shares | $ 0.90 | ||||||||||||
Common Stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Shares issued, value | $ | $ 23,000,000 | $ 2,006 | $ 1,348 | ||||||||||
Shares issued (in shares) | 16,806,722 | 5,130,390 | 8,343,480 | 20,054,556 | 13,483,870 | ||||||||
Price per share (in dollar per share) | $ / shares | $ 1.3685 | $ 1.20 | |||||||||||
Number of shares called by warrants (in shares) | 9,599,999 | ||||||||||||
Warrants exercised for cash, net (in shares) | 1,298,567 | 4,517,910 | |||||||||||
Common Stock | Over-Allotment Option | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Number of rights per share (in shares) | 1 | 1 | |||||||||||
Expected life (years) | 5 years | ||||||||||||
Preferred Stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Shares issued, value | $ | $ 125 | ||||||||||||
Shares issued (in shares) | 1,246,519 | ||||||||||||
Class A | Common Stock | Over-Allotment Option | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Number of shares issued (in shares) | 7,101,307 | ||||||||||||
Price per share (in dollar per share) | $ / shares | $ 1.15 | ||||||||||||
Number of rights per share (in shares) | 1 | ||||||||||||
Expected life (years) | 5 years | ||||||||||||
Exercise price (in dollar per share) | $ / shares | $ 1.15 | ||||||||||||
Class B | Common Stock | Over-Allotment Option | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Price per share (in dollar per share) | $ / shares | $ 1.15 | ||||||||||||
Number of rights per share (in shares) | 1 | ||||||||||||
Expected life (years) | 5 years | ||||||||||||
Exercise price (in dollar per share) | $ / shares | $ 1.15 | ||||||||||||
Class B | Preferred Stock | Over-Allotment Option | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Number of shares issued (in shares) | 1,246,519 | ||||||||||||
Series A Preferred | Preferred Stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Shares issued (in shares) | 1,246,519 |
STOCKHOLDERS' EQUITY - Schedule
STOCKHOLDERS' EQUITY - Schedule of Variables used in Black-Scholes Model (Details) | Dec. 31, 2021 | Jul. 01, 2021 | Dec. 31, 2020 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Expected life (years) | 3 years 21 days | 5 years | 4 years 21 days |
Discount rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrants measurement input | 0.97% | 0.27% | |
Expected volatility | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrants measurement input | 125.58% | 130.56% | |
Expected dividend | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrants measurement input | 0.00% | 0.00% |
EQUITY-BASED COMPENSATION - Nar
EQUITY-BASED COMPENSATION - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of stock options granted (shares) | 79,000 | 1,468,118 |
Fair value | $ 92,191 | $ 1,196,469 |
Unrecognized compensation cost, options | $ 900,000 | 1,300,000 |
Share-based Payment Arrangement, Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options, contractual term | 10 years | |
Unrecognized compensation cost, options | $ 500,000 | $ 200,000 |
Unrecognized compensation cost, recognition period | 2 years 2 months 19 days | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | |
Maximum | Share-based Payment Arrangement, Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | |
Maximum | Share-based Payment Arrangement, Option | Certain Employees | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 5 months | |
Minimum | Share-based Payment Arrangement, Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | |
Minimum | Share-based Payment Arrangement, Option | Certain Employees | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 6 months | |
2015 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares remaining available for grant of stock awards (shares) | 1,026,690 | 108,348 |
ESPP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares granted | 73,951 |
EQUITY-BASED COMPENSATION - Sch
EQUITY-BASED COMPENSATION - Schedule of Fair Value Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life (years) | 6 years | |
Expected dividend yield | 0.00% | 0.00% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 0.93% | 0.28% |
Volatility | 130.44% | 113.17% |
Expected life (years) | 5 years | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.09% | 0.555% |
Volatility | 133.35% | 130.41% |
Expected life (years) | 6 years |
EQUITY-BASED COMPENSATION - Sum
EQUITY-BASED COMPENSATION - Summary of Stock Option Activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Shares | |||
Outstanding, beginning balance (shares) | 1,563,972 | 166,233 | |
Granted (shares) | 79,000 | 1,468,118 | |
Exercised (shares) | 0 | 0 | |
Forfeited (shares) | 45,000 | 36,613 | |
Expired (shares) | 0 | 33,766 | |
Outstanding, ending balance (shares) | 1,597,972 | 1,563,972 | 166,233 |
Exercisable (shares) | 683,346 | 73,975 | |
Weighted-Average Exercise Price | |||
Beginning balance (in usd per share) | $ 2.44 | $ 34.42 | |
Granted (in usd per share) | 1.02 | 0.93 | |
Exercised (in usd per share) | 0 | ||
Forfeited (in usd per share) | 0 | ||
Expired (in usd per share) | 0 | ||
Ending balance (in usd per share) | 2.75 | 2.44 | $ 34.42 |
Exercisable (in usd per share) | $ 4.85 | $ 35.89 | |
Weighted-Average Remaining Contractual Term (in years) and Aggregate Intrinsic Value | |||
Outstanding, weighted-average remaining contractual term | 8 years 6 months | 4 years 10 months 13 days | 6 years 6 months 10 days |
Exercisable, weighted-average remaining contractual term | 8 years 2 months 15 days | 5 years 4 months 28 days | |
Outstanding, aggregate intrinsic value | $ 0 | $ 175,770 | $ 0 |
Exercisable, aggregate intrinsic value | $ 0 | $ 0 |
INCOME TAX - Schedule of Effect
INCOME TAX - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Amount | ||
Federal Tax at Statutory Rate | 21.00% | 21.00% |
Permanent | (0.69%) | 0.63% |
Change in Valuation Allowance | (26.13%) | (25.65%) |
Other items | 0.00% | (0.40%) |
R&D Credit | 5.82% | 4.42% |
Effective Tax Rate | 0.00% | 0.00% |
INCOME TAX - Schedule of Deferr
INCOME TAX - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Capitalized R&D Expenses | $ 3,002,819 | $ 1,725,015 |
Other Deferred Items | 121,152 | 87,432 |
Stock Compensation | 50,650 | 28,048 |
Net Operating Loss - US | 1,931,959 | 673,186 |
R&D Credits | 1,068,451 | 325,329 |
Net deferred tax assets | 6,175,031 | 2,839,010 |
Valuation Allowance | (6,175,031) | (2,839,010) |
Net deferred tax assets (liabilities) | $ 0 | $ 0 |
INCOME TAX - Narrative (Details
INCOME TAX - Narrative (Details) - Federal $ in Millions | Dec. 31, 2021USD ($) |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | $ 9.2 |
Research and development tax credit | |
Operating Loss Carryforwards [Line Items] | |
Tax credit carryforward | $ 1.1 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event - Product | Jan. 12, 2022USD ($)shares |
Subsequent Event [Line Items] | |
Purchase price | $ | $ 1,500,000 |
Deliver of shares of common stock (in shares) | shares | 1,000,000 |