View Filing Data

Print Document View Excel Document

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 7,222,798	$ 3,738,900
Grants receivable from CPRIT	1,834,439	0
Prepaid expenses and other current assets	339,883	955,899
Total current assets	9,397,120	4,694,799
Property and equipment, net	18,762	25,016
Goodwill	8,865,909	8,865,909
Other assets	279,768	308,674
Total assets	18,561,559	13,894,398
Current liabilities:
Accounts payable	1,150,106	1,790,966
Accrued expenses and other current liabilities	459,152	160,783
Note payable	0	502,332
Deferred revenue	0	541,701
Warrant liability	97,327	317,762
Total liabilities	1,706,585	3,313,544
Commitments and Contingencies
Stockholders' equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; 0 issued and outstanding	0	0
Common stock, $0.0001 par value; 100,000,000 shares authorized; 14,641,326 and 4,519,533 shares issued at June 30, 2020 and December 31, 2019, and 14,638,008 and 4,511,174 shares outstanding at June 30, 2020 and December 31, 2019, respectively	1,463	451
Additional paid-in capital	32,798,285	22,657,103
Accumulated deficit	(15,944,774)	(12,076,700)
Total stockholders' equity	16,854,974	10,580,854
Total liabilities and stockholders' equity	$ 18,561,559	$ 13,894,398

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Preferred stock, par value (in 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 (in usd per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	14,641,326	4,519,533
Common stock, shares outstanding	14,638,008	4,511,174

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Statement [Abstract]
Grant revenue	$ 1,243,310	$ 895,778	$ 2,376,140	$ 1,551,413
Operating expenses:
Research and development	1,443,322	840,144	3,086,693	1,540,073
General and administrative	1,700,942	967,736	3,559,959	2,456,226
Total operating expenses	3,144,264	1,807,880	6,646,652	3,996,299
Loss before other income (expense)	(1,900,954)	(912,102)	(4,270,512)	(2,444,886)
Change in fair value of warrant liability	(62,635)	0	220,435	0
Government grants and other income	179,027	0	179,027	0
Interest income, net	304	8,457	2,976	19,165
Net loss	$ (1,784,258)	$ (903,645)	$ (3,868,074)	$ (2,425,721)
Loss per common share - basic and diluted (usd per share)	$ (0.13)	$ (0.30)	$ (0.33)	$ (0.90)
Weighted-average number of common shares outstanding — basic and diluted	13,951,283	3,015,807	11,743,062	2,696,149

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Operating activities
Net loss	$ (3,868,074)	$ (2,425,721)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization and impairment	8,466	118,941
Equity-based compensation expense	71,314	41,441
Change in fair value of warrant liability	(220,435)	0
Changes in operating assets and liabilities:
Grants receivable	(1,834,439)	0
Prepaid expenses and other current assets	617,709	(108,034)
Accounts payable	(741,018)	1,008,454
Accrued expenses and other current liabilities	298,369	(486,641)
Due to/from related party	0	1,256
Deferred revenue	(541,701)	(1,551,412)
Net cash used in operating activities	(6,184,809)	(3,401,716)
Financing activities
Proceeds from issuance of equity securities, net	9,592,325	1,508,179
Distribution to members	0	(99,758)
Proceeds from warrants exercised for cash	578,714	0
Payments on note payable	(502,332)	0
Net cash provided by financing activities	9,668,707	1,408,421
Net increase (decrease) in cash, cash equivalents and restricted cash	3,483,898	(1,993,295)
Cash, cash equivalents and restricted cash at beginning of period	3,738,900	6,131,781
Cash, cash equivalents and restricted cash at end of period	7,222,798	4,138,486
Supplemental disclosure of cash flow information:
Cash paid for interest	4,275	0
Non-cash investing and financing activities:
Accrued issuance costs for public offering	125,159	0
Issuance of shares for license	0	110,474
Conversion of liabilities to equity	0	2,869,412
Nonemployee
Adjustments to reconcile net loss to net cash used in operating activities:
Equity-based compensation expense	$ 25,000	$ 0

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($)	Total	Nonemployee	Common Stock	Common Stock Nonemployee	Preferred Stock	Additional Paid-In Capital	Additional Paid-In Capital Nonemployee	Accumulated Deficit
Equity, beginning balance (shares) at Dec. 31, 2018			2,032,763		0
Equity, beginning balance at Dec. 31, 2018	$ (1,271,114)		$ 203		$ 0	$ 3,869,120		$ (5,140,437)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of equity securities (shares)			960,489
Issuance of equity securities	4,377,591		$ 96			4,377,495
Issuance of equity securities for license (shares)			12,907
Issuance of equity securities for license	110,474		$ 1			110,473
Equity-based compensation expense (shares)			9,550
Equity-based compensation expense	35,407		$ 1			35,406
Net loss	(1,522,076)							(1,522,076)
Equity, ending balance (shares) at Mar. 31, 2019			3,015,709
Equity, ending balance at Mar. 31, 2019	1,730,282		$ 301			8,392,494		(6,662,513)
Equity, beginning balance (shares) at Dec. 31, 2018			2,032,763		0
Equity, beginning balance at Dec. 31, 2018	(1,271,114)		$ 203		$ 0	3,869,120		(5,140,437)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of equity securities (shares)			960,489
Issuance of equity securities	4,377,591
Net loss	(2,425,721)
Equity, ending balance (shares) at Jun. 30, 2019			3,024,619
Equity, ending balance at Jun. 30, 2019	732,913		$ 302			8,298,769		(7,566,158)
Equity, beginning balance (shares) at Mar. 31, 2019			3,015,709
Equity, beginning balance at Mar. 31, 2019	1,730,282		$ 301			8,392,494		(6,662,513)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Distribution to stockholders	(99,758)					(99,758)
Equity-based compensation expense (shares)			8,910
Equity-based compensation expense	6,034		$ 1			6,033
Net loss	(903,645)							(903,645)
Equity, ending balance (shares) at Jun. 30, 2019			3,024,619
Equity, ending balance at Jun. 30, 2019	732,913		$ 302			8,298,769		(7,566,158)
Equity, beginning balance (shares) at Dec. 31, 2019			4,511,174		0
Equity, 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 (shares)			8,353,480		1,246,519
Issuance of equity securities	9,467,166		$ 835		$ 125	9,466,206
Preferred shares converted to common shares (shares)			777,825		(777,825)
Preferred shares converted to common shares	0		$ 78		$ (78)
Equity-based compensation expense (shares)			3,198
Equity-based compensation expense	38,409					38,409
Net loss	(2,083,816)							(2,083,816)
Equity, ending balance (shares) at Mar. 31, 2020			13,645,677		468,694
Equity, ending balance at Mar. 31, 2020	18,002,613		$ 1,364		$ 47	32,161,718		(14,160,516)
Equity, beginning balance (shares) at Dec. 31, 2019			4,511,174		0
Equity, beginning balance at Dec. 31, 2019	10,580,854		$ 451		$ 0	22,657,103		(12,076,700)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Warrants exercised for cash (shares)			503,230
Warrants exercised for cash			$ 600,000
Net loss	(3,868,074)
Equity, ending balance (shares) at Jun. 30, 2020			14,638,008		0
Equity, ending balance at Jun. 30, 2020	16,854,974		$ 1,463		$ 0	32,798,285		(15,944,774)
Equity, beginning balance (shares) at Mar. 31, 2020			13,645,677		468,694
Equity, beginning balance at Mar. 31, 2020	18,002,613		$ 1,364		$ 47	32,161,718		(14,160,516)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Warrants exercised for cash (shares)			503,230
Warrants exercised for cash	578,714		$ 50			578,664
Preferred shares converted to common shares (shares)			468,694		(468,694)
Preferred shares converted to common shares	0		$ 47		$ (47)
Equity-based compensation expense (shares)			1,843	18,564
Equity-based compensation expense	32,905	$ 25,000		$ 2		32,905	$ 24,998
Net loss	(1,784,258)							(1,784,258)
Equity, ending balance (shares) at Jun. 30, 2020			14,638,008		0
Equity, ending balance at Jun. 30, 2020	$ 16,854,974		$ 1,463		$ 0	$ 32,798,285		$ (15,944,774)

ORGANIZATION AND OPERATIONS	6 Months Ended
ORGANIZATION AND OPERATIONS	Jun. 30, 2020
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 treatments for cancers with high unmet medical need caused by dysregulated gene expression. Epigenetics refers to the regulatory system that affects gene expression and the Company's lead epigenetic enzyme technology was licensed from the University of Utah Research Foundation in 2011. The Company is located in Houston, Texas. Merger with Flex Pharma, Inc. On January 3, 2019, Flex Pharma, Inc. ("Flex Pharma"), Salarius Pharmaceuticals LLC ("Private Salarius") and Falcon Acquisition Sub, LLC (“Merger Sub”), a wholly owned subsidiary of Flex Pharma, entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the Merger Agreement, Merger Sub merged with and into Private Salarius, with Private Salarius continuing as a wholly owned subsidiary of Flex Pharma. The merger was completed on July 19, 2019. After the merger, Flex Pharma was renamed Salarius Pharmaceuticals, Inc. The merger was accounted for as a reverse acquisition with Private Salarius being deemed the acquiring company for accounting purposes. See Note 3. Risks Related to Covid-19 Pandemic The outbreak of COVID-19 has spread worldwide. On March 11, 2020, the World Health Organization declared the outbreak a pandemic. The COVID-19 pandemic is affecting the United States and global economies and may affect the Company’s operations and those of third parties on which the Company relies. While the potential economic impact brought by, and the duration of, the COVID-19 pandemic is difficult to assess or predict, the impact of the COVID-19 pandemic on the global financial markets may reduce the Company’s ability to access capital, which could negatively impact the Company’s long-term liquidity. The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. The Company does not yet know the full extent of potential delays or impacts on its business, clinical trials or the drug procurement, financing or other activities or on healthcare systems or the global economy as a whole. However, these effects could have a material impact on the Company’s liquidity, capital resources, operations and business and those of the third parties on which we rely.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2020
Accounting Policies [Abstract]
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying condensed 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"). As described above, the merger with Flex Pharma closed on July 19, 2019. The merger was accounted for as a reverse acquisition with Private Salarius being deemed the acquiring company for accounting purposes. Private Salarius’ historical financial statements have replaced Flex Pharma’s historical consolidated financial statements with respect to periods prior to the completion of the merger with retroactive adjustments to Private Salarius' legal capital to reflect the legal capital of Flex Pharma. Flex Pharma (renamed Salarius Pharmaceuticals, Inc.) remains the continuing registrant and reporting company. Accordingly, the historical financial and operating data of Salarius Pharmaceuticals, Inc., which covers periods prior to the closing date of the merger, reflects the assets, liabilities and results of operations of Private Salarius and does not reflect the assets, liabilities and results of operations of Flex Pharma for the periods prior to July 19, 2019. The Company has retrospectively adjusted its Statement of Changes in Stockholders’ Equity (Deficit) and the weighted average shares used in determining loss per common share to reflect the conversion of the outstanding common unit, profits interest common unit and Series A Preferred unit of Private Salarius that converted into shares of the Company’s common stock upon the merger, and to reflect the effect of the 25 to 1 reverse stock split of the Company’s common stock which occurred upon the merger. Principles of Consolidation The condensed 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. Unaudited Interim Financial Information The accompanying interim financial statements are unaudited. These unaudited interim financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. These unaudited interim financial statements should be read in conjunction with the audited financial statements and accompanying notes for the year ended December 31, 2019 included elsewhere in the Company's Annual Report on Form 10-K filed with the SEC on March 23, 2020. In the opinion of management, the unaudited interim financial statements reflect all the adjustments (consisting of normal recurring adjustments) necessary to state fairly the Company’s financial position as of June 30, 2020 and the results of operations for the three and six months ended June 30, 2020 and 2019. The interim results of operations are not necessarily indicative of the results that may occur for the full fiscal year. The December 31, 2019 balance sheet included herein was derived from the audited financial statements, but does not include all disclosures, including notes, required by GAAP for complete financial statements. 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. Cash and Cash Equivalents Salarius considers all highly-liquid investments with original maturities of three months or less to be cash equivalents. At June 30, 2020 and December 31, 2019, Salarius also held approximately $0 and $1.0 million, respectively, which represents funds received from Cancer Prevention and Research Institution of Texas ("CPRIT"). These funds were used for costs for allowable expenses, primarily research and development expenses. The grant has a mandatory fund matching requirement. Subject to CPRIT review, the Company believes that all matching fund requirements have been met at June 30, 2020. 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. During the three and six months ended June 30, 2020 and June 30, 2019, impairment charges related to long-lived assets were $0 and $110,474, respectively. 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. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The first step in the impairment process is to determine the fair value of the reporting unit and then compare it to the carrying value, including goodwill. If the fair value exceeds the carrying value, no further action is required and no impairment loss is recognized. 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. There was no impairment of goodwill during the three and six months ended June 30, 2020 or June 30, 2019, respectively. 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 In conjunction with the reverse merger transaction, the Company issued rights to receive warrants to purchase the Company’s common stock. Further, on February 11, 2020, the Company issued warrants to purchase the Company's common stock in a registered public offering. The Company determines whether the 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 Condensed 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. 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. When grant funds are received after costs have been incurred, the Company records revenue and a corresponding grants receivable. 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 and the Backsolve method (which is similar to the Black-Scholes valuation model and produces similar results) to estimate the fair value of the stock-based compensation and incentive units. Assumptions utilized in these models including 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, (iv) convertible preferred stock and (v) 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 9,606,690 and 21,485 shares as of June 30, 2020 and 2019, 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 June 30, 2020 and December 31, 2019, 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. Subsequent Events The Company’s management reviewed all material events through the date that the financial statements were issued for subsequent event disclosure consideration. Application of New Accounting Standards In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other,” which is intended to simplify the subsequent measurement of goodwill. The pronouncement allows an entity, during its annual or interim goodwill impairment evaluation, to compare the fair value of a reporting unit with its carrying amount. An impairment charge is immediately recognized by which the carrying amount exceeds the fair value. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The Company does not expect adoption of this ASU to have a material impact on its consolidated financial statements. Pronouncements Not Yet Adopted 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. Early adoption is permitted. The Company is currently evaluating the impact this change will have on its consolidated financial statements. 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 principle of the guidance in ASU 2016-13 but clarified that expected recoveries of amounts previously written off and expected to be written off should be included in the valuation account and should not exceed amounts previously written off and expected to be written off. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019 for public business entities, excluding smaller reporting companies. Early adoption is permitted. As a smaller reporting company, the guidance will be effective for the Company during the first quarter of 2023. The Company is in the process of assessing the impact adoption will have on its consolidated financial statements.

REVERSE ACQUISITION AND DISPOSAL

6 Months Ended

Jun. 30, 2020

Business Combinations [Abstract]

REVERSE ACQUISITION AND DISPOSAL

Reverse Acquisition

On January 3, 2019, Flex Pharma, Private Salarius and Merger Sub entered into the Merger Agreement. Pursuant to the Merger Agreement, Merger Sub merged with and into Private Salarius, with Private Salarius continuing as a wholly owned subsidiary of Flex Pharma, with Flex Pharma deemed the legal acquiror and Private Salarius deemed the accounting acquiror, as described below. The merger was completed on July 19, 2019. After the merger, Flex Pharma was renamed Salarius Pharmaceuticals, Inc. The merger was accounted for as a reverse acquisition business acquisition with Private Salarius being deemed the acquiring company for accounting purposes. Private Salarius, as the accounting acquirer, recorded the assets acquired and liabilities assumed of Flex Pharma in the merger at their fair values as of the acquisition date. Private Salarius’ historical financial statements have replaced Flex Pharma’s historical consolidated financial statements with respect to periods prior to the completion of the merger with retroactive adjustments to Private Salarius' legal capital to reflect the legal capital of Flex Pharma. Flex Pharma (which was renamed Salarius Pharmaceuticals, Inc. in connection with the merger) remains the continuing registrant and reporting company.

Private Salarius was determined to be the accounting acquirer based on the following facts and circumstances: (1) members of Private Salarius owned approximately 80.7% of the voting interests of the combined company immediately following the closing of the transaction; (2) the majority of the board of directors of the combined company was composed of directors designated by Private Salarius under the terms of the Merger Agreement; and (3) existing members of Private Salarius management became the management of the combined company.

The business purposes of the merger included, among other purposes, obtaining the following potential advantages: (i) the combined organization’s resources would be immediately available to support Private Salarius’ research on Seclidemstat; and (ii) the public company status would allow the Company greater potential access to additional capital.

At the closing of the merger, each outstanding common unit, profits interest common unit and Series A Preferred unit of Private Salarius converted into shares of the Company’s common stock (subject to the payment of cash in lieu of fractional shares and after giving effect to a 25 to 1 reverse stock split of the Company’s common stock) at the conversion ratio described in the Merger Agreement.

In addition, at the closing of the merger, the Company 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 shares of the Company’s common stock six months and one day following the closing date of the merger. See Note 8.

The Company accounted for the acquisition as a reverse merger using purchase accounting. Because the merger qualified as a reverse acquisition and given that Private Salarius was a private company at the time of the merger and therefore its value was not readily determinable, the fair value of the merger consideration was deemed to be equal to the sum of the quoted market capitalization of the Company at the merger date, the fair value of the Flex Pharma options that fully vested upon the merger together, and the fair value of the rights to receive warrants that were granted to the pre-merger Flex Pharma stockholders. Total purchase consideration is as follows:


Flex Pharma market capitalization at closing	$	10,963,526
Fair value of rights to warrants	1,629,095
Fair value of Flex Pharma outstanding options on the merger date	132,227
Total purchase consideration	$	12,724,848

The Company recorded all tangible and intangible assets acquired and liabilities assumed at their preliminary estimated fair values on the merger date. The following represents the allocation of the estimated purchase consideration:


Fair value of assets acquired
Cash	$	5,405,826
Accounts receivable	15,168
Inventory	122,235
Prepaid expense and other current assets	106,319
Goodwill and intangibles	8,937,899
Total fair value of assets acquired	14,587,447

Fair value of liabilities assumed
Accounts payable, accrued liabilities and other current liabilities	1,862,599
Total fair value of liabilities assumed	1,862,599

Net assets acquired	$	12,724,848

Unaudited Pro Forma Disclosure

The following unaudited pro forma financial information summarizes the results of operations for the six months ended June 30, 2020 and 2019 as if the merger described above had been completed as of January 1, 2019. Pro forma information primarily reflects adjustments relating to the reversal of transaction costs. Assuming that the merger had been completed as of January 1, 2019, the transaction costs would have been expensed in the prior period.


	Six Months Ended June 30, 2020		Six Months Ended June 30, 2019
Revenues	$	2,376,140	$	1,821,095
Net loss	(3,868,074)		(3,594,569)
Net loss per share	(0.33)		(0.96)

GRANTS RECEIVABLE	6 Months Ended
GRANTS RECEIVABLE	Jun. 30, 2020
Receivables [Abstract]
GRANTS RECEIVABLE	GRANTS RECEIVABLEGrants receivable represents qualifying costs incurred and 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 $1,834,439 and $0 as of June 30, 2020 and December 31, 2019, respectively.

PREPAID EXPENSES AND OTHER CURRENT ASSETS

6 Months Ended

Jun. 30, 2020

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets at June 30, 2020 and December 31, 2019 consisted of the following:


	June 30, 2020		December 31, 2019
Prepaid clinical trial expenses	$	92,742	$	202,743
Prepaid insurance	127,654		617,096

Other prepaid and current assets	119,487		136,060
Total prepaid expenses and other current assets	$	339,883	$	955,899

Prepaid insurance is comprised of prepaid directors' and officers' insurance. In July 2019, the Company financed their directors' and officers' insurance premium with a short term note, the principal amount of which is approximately $0.9 million bearing interest at a rate of 4.61%. The note payable balances, which were included within Current Liabilities on the Condensed Consolidated Balance Sheets, were $0 and $502,332 at June 30, 2020 and December 31, 2019, respectively.

COMMITMENTS AND CONTINGENCIES	6 Months Ended
COMMITMENTS AND CONTINGENCIES	Jun. 30, 2020
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 an exclusive license to an epigenetic enzyme lysine specific demethylase 1 ("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 subject to certain adjustments specified in the agreement, such as 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 of up to $18.7 million to fund the development of LSD-1 inhibitor. This is a 3-year grant award which originally expired on May 31, 2019. However, the Company was approved for an extension with a contract end date of November 30, 2020. 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 a 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. The CPRIT grant is subject to funding conditions including a matching funds requirement where the Company will match 50% of funding from the CPRIT grant. As of June 30, 2020, the Company has received an aggregate of $9.6 million from the CPRIT grant and there was $9.1 million of funds available for the Company to draw upon meeting certain requirements. A portion of the remaining $9.1 million CPRIT grant was for a castration-resistant prostate study (approximately $2.6 million). As we have elected not to pursue this study, we will be requesting from CPRIT approval to redeploy the allocated prostate study funds to our expanded Ewing sarcoma trial. We have been approved for an extension of the CPRIT agreement with contract end date of November 30, 2020. There was no funding received from CPRIT during the six months ended June 30, 2020. At June 30, 2020 and December 31, 2019, the Company had deferred revenue of $0 and $541,701, respectively, related to the CPRIT contract. At June 30, 2020 and December 31, 2019, the Company had grants receivable of $1,834,439 and $0, respectively, related to the CPRIT contract.

FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

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 warrant associated with the Flex Pharma merger measured at fair value on a recurring basis for the three and six months ended June 30, 2020:


Description	Balance at December 31, 2019		Change in Fair Value		Balance at June 30, 2020
Warrant liability	$	317,762	$	(220,435)	$	97,327

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

STOCKHOLDERS' EQUITY

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

STOCKHOLDERS' EQUITY

The accompanying condensed consolidated statements of stockholders' equity (deficit) and the footnotes to the interim financial statements have been retroactively adjusted to reflect the equity structure (that is, the number and type of equity interests issued) of Flex Pharma, the legal parent (accounting acquiree) of the merger closed on July 19, 2019, with the retained earnings and other equity balances of the Private Salarius before the merger. Private Salarius' equity was restated using the exchange ratio established in the merger agreement to reflect the number of shares of Flex Pharma issued in the merger. Concurrent with the merger, the Company's shareholders approved a 1-for-25 reverse stock split, which became effective on July 19, 2019. Total shares owned by Flex Pharma pre-merger shareholders (net of fraction shares paid in cash) was 8,353,480 shares after reverse stock-split.

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 convertible preferred stock issued in this transaction includes a beneficial ownership limitation on conversion, but has no dividend rights (except to the extent that dividends are also paid on the common stock). The conversion price of the Series A convertible preferred stock issued in the February Offering as well as the exercise price of the warrants are fixed and do not contain any variable pricing features or any price based anti-dilutive features.

As of June 30, 2020, all 1,246,519 shares of Series A convertible preferred stock were converted to common stock.

During the six months ended June 30, 2019 the Company issued 960,489 common shares (4,035 Series A preferred units and 350 profit interest units of Private Salarius) for $4,377,591 (net of offering cost of $10,617).

In December 2018, the Company agreed to issue an unrelated party 12,907 common shares (91 common units of Private Salarius) to acquire licenses for the DNMT1 inhibitor. The issuance was approved in January 2019 and the license was granted in 2018.

Warrants Exercised for Cash

During the six months ended June 30, 2020, the Company issued 503,230 common shares as a result of warrant exercises, and received cash proceeds of approximately $0.6 million. As of June 30, 2020, 9,096,769 of warrants issued in the February Offering were still outstanding.

Right to Warrants

Pursuant to the Merger Agreement (See Note 3), 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 are exercisable, in the aggregate, into 142,711 shares of the Company's common stock with a 5-year term from January 20, 2020, and 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 as the Company believes the value will closely approximate the value from the binomial asset pricing model that consisted of a conditional probability weighted expected return method that values the Company’s equity securities assuming various possible future outcomes to estimate the allocation of value within one or more of the scenarios. 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:


	June 30, 2020	December 31, 2019
Discount rate	0.24%	1.69%
Expected life (years)	4.56 years	5.06 years
Expected volatility	124.10%	103.07%
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 $500,000 of the $1,000,000 success fee payable to Wedbush at the closing of the merger. The remaining $500,000 success fee was paid in cash. These warrants have an exercise price of $18.90 and a 5-year term. As of June 30, 2020, all warrants issued to Wedbush were outstanding.

EQUITY-BASED COMPENSATION

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

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"). On July 19, 2019, the Company completed a merger with Flex Pharma and Flex Pharma had fully vested options to purchase 90,279 common shares outstanding as of the date of the merger and 65,151 of these options continue to be exercisable as of June 30, 2020. 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 June 30, 2020, there were 50,087 shares remaining available for the grant of stock awards under the 2015 Plan.

On March 23, 2020, the Company awarded 182,000 stock options to its employees and directors, pursuant to the plan described above. Stock options generally vest over one to four years and have a contractual term of ten years. Stock options are valued using the Black-Scholes option pricing model and compensation cost is recognized based on the resulting value over the service period. Expected volatilities utilized in the model are based on implied volatilities from traded stocks of peer companies. Similarly, the dividend yield is based on historical experience and the estimate of future dividend yields. The risk-free interest rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The expected term of the options is based on the average period the stock options are expected to remain outstanding. The fair value of the option grants of $92,007 has been estimated with the following assumptions on the grant date.


Risk-free interest rate	0.48	%
Volatility	113.17	%
Expected life (years)	5.80
Expected dividend yield	0	%

The following table summarizes stock option activity for employees and non-employees for the six months ended June 30, 2020:


	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2019	166,233	$	34.42	6.53	$	—
Granted	182,000	0.61
Forfeited	(26,000)	—
Outstanding at June 30, 2020	322,233	$	17.59	7.85	$	—
Exercisable at June 30, 2020	85,101	$	59.61	3.00	$	—

As of June 30, 2020, there was approximately $395,612 of total unrecognized compensation cost 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 2.96 years.

PAYROLL PROTECTION PROGRAM	6 Months Ended
PAYROLL PROTECTION PROGRAM	Jun. 30, 2020
Debt Disclosure [Abstract]
PAYROLL PROTECTION PROGRAM	PAYROLL PROTECTION PROGRAMOn April 13, 2020, the Company was granted a loan of approximately $0.18 million from the Paycheck Protection Program ("PPP") established under the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"). The loan matures on April 13, 2022 and bears interest at a rate of 1% per annum. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. The proceeds of the loan were used in full to pay for payroll disbursement after it was received, which the Company expects to comply with the PPP eligibility and loan forgiveness criteria. As such, the loan was accounted as a government grant at June 30, 2020. The Company will continually reassess its ability to meet the forgiveness conditions, and it may have to reverse income if it can no longer support a conclusion that it expects to meet the conditions.

SUBSEQUENT EVENTS	6 Months Ended
SUBSEQUENT EVENTS	Jun. 30, 2020
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTSOn August 3, 2020, the Company completed a public offering with total gross proceeds of approximately $6.2 million, which includes the full exercise of the underwriter's over-allotment option to purchase an additional 669,181 shares prior to deducting underwriting discounts and commissions and offering expenses payable by Salarius. A total of 5,130,390 common shares of common stock were issued in the offering, priced at a public offering price of $1.20 per share.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2020
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying condensed 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"). As described above, the merger with Flex Pharma closed on July 19, 2019. The merger was accounted for as a reverse acquisition with Private Salarius being deemed the acquiring company for accounting purposes. Private Salarius’ historical financial statements have replaced Flex Pharma’s historical consolidated financial statements with respect to periods prior to the completion of the merger with retroactive adjustments to Private Salarius' legal capital to reflect the legal capital of Flex Pharma. Flex Pharma (renamed Salarius Pharmaceuticals, Inc.) remains the continuing registrant and reporting company. Accordingly, the historical financial and operating data of Salarius Pharmaceuticals, Inc., which covers periods prior to the closing date of the merger, reflects the assets, liabilities and results of operations of Private Salarius and does not reflect the assets, liabilities and results of operations of Flex Pharma for the periods prior to July 19, 2019. The Company has retrospectively adjusted its Statement of Changes in Stockholders’ Equity (Deficit) and the weighted average shares used in determining loss per common share to reflect the conversion of the outstanding common unit, profits interest common unit and Series A Preferred unit of Private Salarius that converted into shares of the Company’s common stock upon the merger, and to reflect the effect of the 25 to 1 reverse stock split of the Company’s common stock which occurred upon the merger.
Principles of Consolidation	Principles of Consolidation The condensed 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.
Cash and Cash Equivalents	Cash and Cash EquivalentsSalarius considers all highly-liquid investments with original maturities of three months or less to be cash equivalents.
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. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The first step in the impairment process is to determine the fair value of the reporting unit and then compare it to the carrying value, including goodwill. If the fair value exceeds the carrying value, no further action is required and no impairment loss is recognized. 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.
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 In conjunction with the reverse merger transaction, the Company issued rights to receive warrants to purchase the Company’s common stock. Further, on February 11, 2020, the Company issued warrants to purchase the Company's common stock in a registered public offering. The Company determines whether the 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 Condensed 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.
Grants Receivable and Revenue Recognition	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. When grant funds are received after costs have been incurred, the Company records revenue and a corresponding grants receivable.
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. The Company uses the Black-Scholes option valuation model and the Backsolve method (which is similar to the Black-Scholes valuation model and produces similar results) to estimate the fair value of the stock-based compensation and incentive units. Assumptions utilized in these models including 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	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 June 30, 2020 and December 31, 2019, 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.
Subsequent Events	Subsequent Events The Company’s management reviewed all material events through the date that the financial statements were issued for subsequent event disclosure consideration.
Application of New Accounting Standards and Pronouncements Not Yet Adopted	Application of New Accounting Standards In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other,” which is intended to simplify the subsequent measurement of goodwill. The pronouncement allows an entity, during its annual or interim goodwill impairment evaluation, to compare the fair value of a reporting unit with its carrying amount. An impairment charge is immediately recognized by which the carrying amount exceeds the fair value. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The Company does not expect adoption of this ASU to have a material impact on its consolidated financial statements. Pronouncements Not Yet Adopted 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. Early adoption is permitted. The Company is currently evaluating the impact this change will have on its consolidated financial statements. 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 principle of the guidance in ASU 2016-13 but clarified that expected recoveries of amounts previously written off and expected to be written off should be included in the valuation account and should not exceed amounts previously written off and expected to be written off. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019 for public business entities, excluding smaller reporting companies. Early adoption is permitted. As a smaller reporting company, the guidance will be effective for the Company during the first quarter of 2023. The Company is in the process of assessing the impact adoption will have on its consolidated financial statements.

REVERSE ACQUISITION AND DISPOSAL (Tables)

6 Months Ended

Jun. 30, 2020

Business Combinations [Abstract]

Summary of Purchase Consideration

Total purchase consideration is as follows:


Flex Pharma market capitalization at closing	$	10,963,526
Fair value of rights to warrants	1,629,095
Fair value of Flex Pharma outstanding options on the merger date	132,227
Total purchase consideration	$	12,724,848

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following represents the allocation of the estimated purchase consideration:


Fair value of assets acquired
Cash	$	5,405,826
Accounts receivable	15,168
Inventory	122,235
Prepaid expense and other current assets	106,319
Goodwill and intangibles	8,937,899
Total fair value of assets acquired	14,587,447

Fair value of liabilities assumed
Accounts payable, accrued liabilities and other current liabilities	1,862,599
Total fair value of liabilities assumed	1,862,599

Net assets acquired	$	12,724,848

Schedule of Unaudited Pro Forma Results


	Six Months Ended June 30, 2020		Six Months Ended June 30, 2019
Revenues	$	2,376,140	$	1,821,095
Net loss	(3,868,074)		(3,594,569)
Net loss per share	(0.33)		(0.96)

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables)

6 Months Ended

Jun. 30, 2020

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets at June 30, 2020 and December 31, 2019 consisted of the following:


	June 30, 2020		December 31, 2019
Prepaid clinical trial expenses	$	92,742	$	202,743
Prepaid insurance	127,654		617,096

Other prepaid and current assets	119,487		136,060
Total prepaid expenses and other current assets	$	339,883	$	955,899

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Summary of Changes in Fair Value of Level 3 Liabilities


Description	Balance at December 31, 2019		Change in Fair Value		Balance at June 30, 2020
Warrant liability	$	317,762	$	(220,435)	$	97,327

STOCKHOLDERS' EQUITY (Tables)

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

Schedule of Variables used in Black-Scholes Model

Variables used in the Black-Scholes model are as follows:


	June 30, 2020	December 31, 2019
Discount rate	0.24%	1.69%
Expected life (years)	4.56 years	5.06 years
Expected volatility	124.10%	103.07%
Expected dividend	—%	—%

EQUITY-BASED COMPENSATION (Tables)

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Fair Value Assumptions

The fair value of the option grants of $92,007 has been estimated with the following assumptions on the grant date.


Risk-free interest rate	0.48	%
Volatility	113.17	%
Expected life (years)	5.80
Expected dividend yield	0	%

Summary of Stock Option Activity

The following table summarizes stock option activity for employees and non-employees for the six months ended June 30, 2020:


	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2019	166,233	$	34.42	6.53	$	—
Granted	182,000	0.61
Forfeited	(26,000)	—
Outstanding at June 30, 2020	322,233	$	17.59	7.85	$	—
Exercisable at June 30, 2020	85,101	$	59.61	3.00	$	—

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details)		3 Months Ended		6 Months Ended
	Jul. 19, 2019	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) shares	Jun. 30, 2019 USD ($) shares	Dec. 31, 2019 USD ($)
Class of Stock [Line Items]
Grant contract amount		$ 0		$ 0		$ 1,000,000.0
Impairment charges of long-lived assets		$ 0	$ 110,474	$ 0	$ 110,474
Antidilutive securities excluded from computation of earnings per share (shares) \| shares				9,606,690	21,485
Common Stock
Class of Stock [Line Items]
Conversion ratio	25

REVERSE ACQUISITION AND DISPOSAL - Narrative (Details)	Jul. 19, 2019 shares
Business Acquisition [Line Items]
Period the right is unexercisable	6 months
Common Stock
Business Acquisition [Line Items]
Conversion ratio	25
Number of rights per share	1
Flex Pharma
Business Acquisition [Line Items]
Voting interest acquired	80.70%

REVERSE ACQUISITION AND DISPOSAL - Summary of Purchase Consideration (Details) - Flex Pharma	Jul. 19, 2019 USD ($)
Business Acquisition [Line Items]
Flex Pharma market capitalization at closing	$ 10,963,526
Fair value of rights to warrants	1,629,095
Fair value of Flex Pharma outstanding options on the merger date	132,227
Total purchase consideration	$ 12,724,848

REVERSE ACQUISITION AND DISPOSAL - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - Flex Pharma	Jul. 19, 2019 USD ($)
Business Acquisition [Line Items]
Cash	$ 5,405,826
Accounts receivable	15,168
Inventory	122,235
Prepaid expense and other current assets	106,319
Goodwill and intangibles	8,937,899
Total fair value of assets acquired	14,587,447
Accounts payable, accrued liabilities and other current liabilities	1,862,599
Total fair value of liabilities assumed	1,862,599
Net assets acquired	$ 12,724,848

REVERSE ACQUISITION AND DISPOSAL - Schedule of Unaudited Pro Forma Results (Details) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Business Combinations [Abstract]
Revenues	$ 2,376,140	$ 1,821,095
Net loss	$ (3,868,074)	$ (3,594,569)
Net loss per share (in dollars per share)	$ (0.33)	$ (0.96)

GRANTS RECEIVABLE (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Receivables [Abstract]
Grants receivable from CPRIT	$ 1,834,439	$ 0

PREPAID EXPENSES AND OTHER CURRENT ASSETS - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid clinical trial expenses	$ 92,742	$ 202,743
Prepaid insurance	127,654	617,096
Other prepaid and current assets	119,487	136,060
Total prepaid expenses and other current assets	$ 339,883	$ 955,899

PREPAID EXPENSES AND OTHER CURRENT ASSETS - Narrative (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019	Jul. 31, 2019
Short-term Debt [Line Items]
Note payable	$ 0	$ 502,332
Note Payable
Short-term Debt [Line Items]
Principal amount			$ 900,000
Interest rate			4.61%

COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	1 Months Ended	6 Months Ended
COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	Jun. 30, 2016	Jun. 30, 2020	Dec. 31, 2019	Dec. 31, 2011
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Award amount	$ 18,700,000
Award term	3 years
Continued payments, percent of net sales		1.00%
Matching funds requirement		50.00%
Aggregate amount received		$ 9,600,000
Current funding available		9,100,000
Current funding received		0
Deferred revenue		0	$ 541,701
Grants receivable from CPRIT		1,834,439	$ 0
Castration-resistant prostate study
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Current funding available		$ 2,600,000
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 INSTRUMENTS (Details) - USD ($)	3 Months Ended		6 Months Ended
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($)	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Change in Fair Value	$ (62,635)	$ 0	$ 220,435	$ 0
Level 3 \| Recurring
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at December 31, 2019			317,762
Change in Fair Value			(220,435)
Balance at June 30, 2020	$ 97,327		$ 97,327

STOCKHOLDERS' EQUITY - Narrative (Details)			1 Months Ended	3 Months Ended			6 Months Ended
STOCKHOLDERS' EQUITY - Narrative (Details)	Feb. 11, 2020 USD ($) $ / shares shares	Jul. 19, 2019 USD ($) trading_Days $ / shares shares	Dec. 31, 2018 shares	Jun. 30, 2020 USD ($) shares	Mar. 31, 2020 USD ($) shares	Mar. 31, 2019 USD ($) shares	Jun. 30, 2020 USD ($) shares	Jun. 30, 2019 USD ($) shares	Dec. 31, 2019 shares	Jan. 20, 2019
Class of Stock [Line Items]
Common stock, shares outstanding				14,638,008			14,638,008		4,511,174
Shares issued, value \| $					$ 9,467,166	$ 4,377,591		$ 4,377,591
Expected life (years)				4 years 6 months 21 days			4 years 6 months 21 days		5 years 21 days	5 years
Exercise price (in dollars per share) \| $ / shares		$ 15.17
Number of shares called by warrants		142,711
Offering costs \| $								$ 10,617
Warrants exercised for cash \| $				$ 578,714
Consecutive trading days \| trading_Days		10
Over-Allotment Option
Class of Stock [Line Items]
Shares issued, value \| $	$ 11,000,000.0
Shares issued	1,252,173
Common Stock
Class of Stock [Line Items]
Conversion ratio		25
Common stock, shares outstanding		8,353,480
Shares issued, value \| $					$ 835	$ 96
Shares issued	8,343,480				8,353,480	960,489		960,489
Number of rights per share		1
Number of shares called by warrants	9,599,999
Preferred shares converted to common shares (shares)				468,694	777,825
Issuance of equity securities for license (shares)			12,907			12,907
Warrants exercised for cash (shares)				503,230			503,230
Warrants exercised for cash \| $				$ 50			$ 600,000
Warrants outstanding (shares)				9,096,769			9,096,769
Common Stock \| Over-Allotment Option
Class of Stock [Line Items]
Expected life (years)	5 years
Number of rights per share	1
Exercise price (in dollars per share) \| $ / shares	$ 1.15
Preferred Stock
Class of Stock [Line Items]
Shares issued, value \| $					$ 125
Shares issued					1,246,519
Preferred shares converted to common shares (shares)				(468,694)	(777,825)
Class A \| Common Stock \| Over-Allotment Option
Class of Stock [Line Items]
Number of shares issued	7,101,307
Price per share (usd per share) \| $ / shares	$ 1.15
Class B \| Preferred Stock \| Over-Allotment Option
Class of Stock [Line Items]
Number of shares issued	1,246,519
Price per share (usd per share) \| $ / shares	$ 1.15
Series A Preferred \| Common Stock
Class of Stock [Line Items]
Shares issued								4,035
Series A Preferred \| Preferred Stock
Class of Stock [Line Items]
Shares issued	1,246,519
Preferred shares converted to common shares (shares)							1,246,519
Profit Interest Units \| Common Stock
Class of Stock [Line Items]
Shares issued								350
Common Units \| Common Stock
Class of Stock [Line Items]
Issuance of equity securities for license (shares)			91
Wedbush \| Satisfy success fee
Class of Stock [Line Items]
Expected life (years)		5 years
Exercise price (in dollars per share) \| $ / shares		$ 18.90
Number of shares called by warrants		42,928
Warrant value \| $		$ 500,000
Due to related party \| $		1,000,000
Cash payment to related party \| $		$ 500,000

STOCKHOLDERS' EQUITY - Schedule of Variables used in Black-Scholes Model (Details)	Jun. 30, 2020	Dec. 31, 2019	Jan. 20, 2019
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expected life (years)	4 years 6 months 21 days	5 years 21 days	5 years
Discount rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants measurement input	0.24%	1.69%
Expected volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants measurement input	124.10%	103.07%
Expected dividend
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants measurement input	0.00%	0.00%

EQUITY-BASED COMPENSATION - Narrative (Details) - USD ($)		6 Months Ended
	Sep. 10, 2019	Jun. 30, 2020	Dec. 31, 2019	Jul. 19, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares outstanding		322,233	166,233
Number of stock options granted (shares)	182,000	182,000
Fair value		$ 92,007
Unrecognized compensation cost, options		$ 395,612
Unrecognized compensation cost, recognition period		2 years 11 months 15 days
Flex Pharma
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares outstanding		65,151		90,279
Employee stock option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options, contractual term		10 years
Minimum \| Employee stock option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		1 year
Maximum \| Employee stock option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		4 years
2015 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares remaining available for grant of stock awards (shares)		50,087

EQUITY-BASED COMPENSATION - Schedule of Fair Value Assumptions (Details)	6 Months Ended
	Jun. 30, 2020
Share-based Payment Arrangement [Abstract]
Risk-free interest rate	0.48%
Volatility	113.17%
Expected life (years)	5 years 9 months 18 days
Expected dividend yield	0.00%

EQUITY-BASED COMPENSATION - Summary of stock option activity (Details) - USD ($)		6 Months Ended	12 Months Ended
	Sep. 10, 2019	Jun. 30, 2020	Dec. 31, 2019
Shares
Outstanding, Beginning Balance (shares)		166,233
Granted (shares)	182,000	182,000
Forfeited (shares)		(26,000)
Outstanding, Ending Balance (shares)		322,233	166,233
Exercisable (shares)		85,101
Weighted-Average Exercise Price
Weighted-average exercise price, Beginning Balance (in usd per share)		$ 34.42
Granted, weighted-average exercise price (in usd per share)		0.61
Forfeited, weighted-average exercise price (in usd per share)		0
Weighted-average exercise price, Ending Balance (in usd per share)		17.59	$ 34.42
Exercisable, weighted-average exercise price (in usd per share)		$ 59.61
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Outstanding, weighted-average remaining contractual term		7 years 10 months 6 days	6 years 6 months 10 days
Exercisable, weighted-average remaining contractual term		3 years
Outstanding, aggregate intrinsic value		$ 0	$ 0
Exercisable, aggregate intrinsic value		$ 0

PAYROLL PROTECTION PROGRAM (Details) - Loan Payable $ in Thousands	Apr. 13, 2020 USD ($)
Debt Instrument [Line Items]
Interest rate	1.00%
PPP, CARES Act
Debt Instrument [Line Items]
Principal amount	$ 180

SUBSEQUENT EVENTS (Details) - USD ($)			3 Months Ended		6 Months Ended
SUBSEQUENT EVENTS (Details) - USD ($)	Aug. 03, 2020	Feb. 11, 2020	Mar. 31, 2020	Mar. 31, 2019	Jun. 30, 2019
Subsequent Event [Line Items]
Issuance of equity securities			$ 9,467,166	$ 4,377,591	$ 4,377,591
Common Stock
Subsequent Event [Line Items]
Issuance of equity securities			$ 835	$ 96
Issuance of equity securities (shares)		8,343,480	8,353,480	960,489	960,489
Over-Allotment Option
Subsequent Event [Line Items]
Issuance of equity securities		$ 11,000,000.0
Issuance of equity securities (shares)		1,252,173
Subsequent Event
Subsequent Event [Line Items]
Issuance of equity securities	$ 6,200,000
Subsequent Event \| Common Stock
Subsequent Event [Line Items]
Issuance of equity securities (shares)	5,130,390
Price per share (usd per share)	$ 1.20
Subsequent Event \| Over-Allotment Option
Subsequent Event [Line Items]
Issuance of equity securities (shares)	669,181