DCOY

Risks Related to our Business Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
Currently, our common stock is publicly traded on The Nasdaq Capital Market.
On December 31, 2025, we received a delisting determination from Nasdaq because the closing bid price of our common stock was below the $1.00 minimum requirement for 30 consecutive business days.
Because we previously effected the 2025 Reverse Stock Split and remain subject to a mandatory panel monitor, we were not eligible for a 180-day grace period.
On March 13, 2026, the Company received a written notice from the Hearings Panel notifying the Company that it has been granted until March 20, 2026 to regain compliance with the Minimum Bid Price Requirement..
Additionally, Pursuant to the Hearings Panel's decision, the continued listing of the Company's securities is subject to the condition that the Company must demonstrate compliance with the Minimum Bid Price Requirement on or before March 20, 2026.
On January 17, 2025, Nasdaq notified us that the Merger constitutes a business combination that will result in a “Change of Control” pursuant to Listing Rule 5110(a) in connection with step two of the transaction and, accordingly, we will be required to satisfy all of Nasdaq’s initial listing criteria and to complete Nasdaq’s initial listing process, including the payment of all applicable fees.
We must complete the process prior to our stockholder approval for the issuance of 20% or more of our pre-transaction shares in connection with the conversion of the preferred shares issued at the closing of the merger into shares of our common stock.
We may never meet the Nasdaq initial listing standards and we do not intend to submit the initial listing application and call the special meeting of stockholders to approve the conversion of the Preferred Stock into common stock until we expect to be able to meet the initial listing standards.
If we fail to regain compliance through the Hearings Panel process or fail to meet the initial listing requirements following the Merger, Nasdaq will delist our securities.
We cannot assure you that we will be able to regain compliance or meet those initial listing requirements.
Even if our securities are so listed, we may be unable to maintain the listing of our securities in the future.
We are subject to Mandatory Panel Monitor for a period of one year from the date of each respective Hearings Panel letter.
As we have been found out of compliance with the Minimum Bid Price Requirement during this monitoring period, we are currently subject to the delisting procedures described above.
In order to continue listing our securities on Nasdaq following the Merger, we will be required to maintain certain financial, distribution and stock price levels.
If Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange or regain compliance with Nasdaq, our securities could be quoted on an over-the-counter market.
If this were to occur, we could face significant material adverse consequences, including: • a limited availability of market quotations for our securities; • reduced liquidity for our securities; • a determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; • a limited amount of news and analyst coverage; and • a decreased ability to issue additional securities or obtain additional financing in the future.
The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts states from regulating the sale of certain securities, which are referred to as “covered securities.” Since our common stock is listed on Nasdaq, it is a covered security.
Although states are preempted from regulating the sale of covered securities, the federal statute does allow states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then states can regulate or bar the sale of covered securities in a particular case.
If we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities.
Our financial condition raises substantial doubt regarding our ability to continue as a going concern.
Our consolidated financial statements have been prepared assuming that we will continue to operate as a going concern, which contemplates the realization of assets, and the satisfaction of liabilities and commitments in the ordinary course of business.
Based on our current operations and operating plans, however, we believe that our existing cash and cash equivalents will not be sufficient to fund our operating expenses and capital expenditure requirements for the next 12 months.
Included in our anticipated future capital needs will be capital for advancing our research and development activities including our goal to begin a Phase 1 clinical trial for DCOY-101 potentially in the first half of 2027.
As a result, we have determined that there is substantial doubt regarding our ability to continue as a going concern, and our independent registered public accounting firm has included in its audit opinion for the year ended December 31, 2025, an explanatory paragraph about such substantial doubt regarding our ability to continue as a going concern.
The substantial doubt regarding our ability to continue as a going concern may adversely affect our stock price and our ability to raise capital necessary to execute our current operating plans.
If we are unable to obtain additional capital, we may not be able to continue its operations on the scope or scale as currently conducted, and we could be forced to cease operations, in which case you could lose all or most of your investment.
We have never generated revenue from product sales and all of our potential product candidates are currently in the pre-clinical stage, and we may continue to incur significant losses for the foreseeable future and never generate revenue from product sales.
We are a preclinical biopharmaceutical discovery and development company.
We plan to bring certain potential product candidates into the early stages of clinical development beginning in the first half of 2027, however, our ability to do so will depend on factors beyond our control, including our ability to raise capital and to effectively navigate the regulatory requirements, particularly those imposed by the FDA which are described elsewhere in these Risk Factors.
Because of the need to proceed to and complete clinical trials, establish safety and efficacy and obtain regulatory approval, which is an expensive and time-consuming process, we do not anticipate generating revenue from product sales for at least several years and will continue to sustain considerable losses during that time.
We may develop a partnership that could generate income sooner, but there is no guarantee that will be achievable.
Because we have yet to generate revenue from product sales on which to evaluate our potential for future success and to determine if we will be able to execute our business plan, it is difficult to evaluate our prospects and the likelihood of success or failure of our business.
Our ability to generate revenue from product sales and achieve profitability depends on our ability, alone or with partners, to successfully complete the development of, obtain the regulatory approvals for and commercialize pharmaceutical potential product candidates.
We have no pharmaceutical potential product candidates that have proceeded to clinical trials or generated any commercial revenue, do not expect to generate revenues from the commercial sale of pharmaceutical products for the foreseeable future, and may never generate revenues from the sale of pharmaceutical products.
Our ability to generate revenue and achieve profitability will depend on, among other things, the following: • identifying and validating new therapeutic strategies; • entering into and maintaining collaborations and relationships with large pharmaceutical or biotechnology companies; • completing our research and preclinical development of pharmaceutical potential product candidates; • initiating and completing clinical trials for pharmaceutical potential product candidates; • seeking and obtaining regulatory marketing approvals for pharmaceutical potential product candidates that successfully complete clinical trials; • establishing and maintaining supply and manufacturing relationships with third parties; • launching and commercializing pharmaceutical potential product candidates for which we obtain regulatory marketing approval with a partner or, if launched independently, successfully establishing a sales force, marketing and distribution infrastructure; • maintaining, protecting, enforcing, defending and expanding our intellectual property portfolio; and • attracting, hiring and retaining qualified personnel.
Because of the numerous risks and uncertainties associated with pharmaceutical product development, we cannot predict the timing or amount of increased expenses and when we will be able to achieve or maintain profitability, if ever.
Our expenses could increase beyond expectations if we are required by regulatory agencies to perform additional unanticipated studies and trials.
Even if one or more pharmaceutical potential product candidates we independently develop is approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved pharmaceutical product candidate.
Moreover, even if we can generate revenues from the sale of any approved pharmaceutical products, we may not become profitable and may need to obtain additional funding to continue operations.

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Gone since FY2024

Risks Related to the Merger The Merger may be completed even though certain events occur prior to Merger Closing that materially and adversely affect Salarius.
The Merger Agreement provides that either Salarius or Decoy can refuse to complete the Merger if there is a material adverse change affecting the other party between January 10, 2025, the date of the Merger Agreement, and the Merger Closing.
However, certain types of changes do not permit either party to refuse to complete the Merger, even if such change could be said to have a material adverse effect on Salarius or Decoy, including: • general business or economic conditions affecting the industry in which Salarius or Decoy or their subsidiaries, as applicable, operate; • acts of war, armed hostilities or terrorism, acts of God or comparable events, epidemic, pandemic or disease outbreak (including the COVID-19 virus) or any worsening of the foregoing, or any declaration of martial law, quarantine or similar directive, policy or guidance or law or other action by any governmental body in response thereto; • changes in financial, banking or securities markets; • any change in, or any compliance with or action taken for the purpose of complying with, any law or generally accepted accounting principles (“GAAP”) (or interpretations of any law or GAAP); • changes resulting from the announcement of the Merger Agreement or the pendency of the transactions contemplated by the Merger Agreement; or • changes resulting from the taking of any action required to be taken under the Merger Agreement.
If adverse changes occur and Salarius and Decoy still complete the Merger, the market price of the combined company’s common stock may suffer.
This in turn may reduce the value of the Merger to the stockholders of Salarius.
The Exchange Ratio set forth in the Merger Agreement is adjustable based on the Parent Cash Amount and the Company Cash Amount, each of which will be impacted by, among other things, unexpected expenses that could be experienced by Salarius or Decoy during the pre-Merger Closing period, which could result in Salarius stockholders owning significantly less of the combined company than currently estimated.
The Exchange Ratio formula in the Merger Agreement is subject to adjustment based on the Parent Cash Amount and Company Cash Amount on the anticipated Merger Closing Date (each as defined in the Merger Agreement).
For example, if the Parent Cash Amount is $0 and the Company Cash Amount is $2.0 million, stockholders of Salarius would own approximately 14.1% of the fully diluted common stock, and stockholders of Decoy would own, or hold rights to acquire, approximately 85.9% of Salarius common stock, in each case calculated on a fully-diluted basis for in-the-money options and warrants (and in each case, prior to taking into account any dilution from the Qualified Financing).
The calculation of the Exchange Ratio under the Merger Agreement and post-Merger Closing ownership of Salarius stockholders are subject to adjustment based on an assumed value of Salarius at Merger Closing based on the Parent Cash Amount and Company Cash Amount as of the anticipated Merger Closing Date.
To the extent the Parent Cash Amount falls below $0, Salarius’ assumed value would be reduced or increased by $100,000 for every $100,000 below the threshold.
To the extent the Company Cash Amount falls below $2.0 million, Decoy’s assumed value would be reduced by $100,000 for every $100,000 below the threshold.
Based on Salarius’ current estimates, Salarius anticipates delivering a Parent Cash Amount of approximately $0; however, the final Parent Cash Amount will not be calculated until the anticipated Merger Closing Date, and may vary significantly depending on, among other things, Salarius’ ability to control and correctly estimate its operating expenses, and if the amount is significantly less, Salarius stockholders would experience additional dilution, subject to a floor of 10% of the combined company, regardless of the Parent Cash Amount on the anticipated Merger Closing Date.
Further, these ownership percentages do not give effect to the shares of Salarius common stock that will be issued to investors in the Qualified Financing prior to the Merger Closing, and do not account for any additional shares of Salarius common stock that may be issued to investors following the effective time of the Merger.
As a result, current stockholders of Salarius will own less of the combined company than currently contemplated.
Stockholders of the combined company may not realize a benefit from the Merger commensurate with the ownership dilution they will experience in connection with the Merger and the Qualified Financing.
If the combined company is unable to realize the full strategic and financial benefits currently anticipated from the Merger, Salarius stockholders and Decoy stockholders will have experienced substantial dilution of their ownership interests in their respective companies.
The Qualified Financing will cause substantial dilution to Salarius and Decoy stockholders which may result in such stockholders not receiving any commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined company is able to realize only part of the strategic and financial benefits currently anticipated from the Qualified Financing.
During the pendency of the Merger, Salarius may not be able to enter into a business combination with another party at a favorable price because of restrictions in the Merger Agreement, which could adversely affect its business.
Covenants in the Merger Agreement impede the ability of Salarius and Decoy to make acquisitions, subject to certain exceptions relating to fiduciary duties, as set forth below, or to complete other transactions that are not in the ordinary course of business pending completion of the Merger.
As a result, if the Merger is not completed, the parties may be at a disadvantage to their competitors during such period.
In addition, while the Merger Agreement is in effect, each party is generally prohibited from soliciting, initiating, encouraging or entering into certain extraordinary transactions, such as a merger, sale of assets, or other business combination outside the ordinary course of business with any third party, subject to certain exceptions relating to fiduciary duties.
Any such transactions could be favorable to such party’s stockholders.
Certain provisions of the Merger Agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Merger Agreement.
The terms of the Merger Agreement prohibit each of Salarius and Decoy from soliciting alternative takeover proposals or cooperating with persons making unsolicited takeover proposals, except in limited circumstances when such party’s board of directors determines in good faith that an unsolicited alternative takeover proposal is or is reasonably likely to lead to a superior takeover proposal and that failure to cooperate with the proponent of the proposal would be reasonably likely to be inconsistent with the applicable board’s fiduciary duties.
In addition, if Salarius terminates the Merger Agreement under certain circumstances, including terminating because of a decision of Salarius to enter into definitive agreement with respect to a superior offer, Salarius would be required to pay a termination fee of $300,000 to Decoy.
This termination fee described above may discourage third parties from submitting alternative takeover proposals to Salarius stockholders.
Pursuant to the terms of the Merger Agreement, Salarius is required to recommend that its stockholders approve the conversion of all outstanding shares of its Series A Preferred Stock into shares of its Common Stock.
Salarius cannot guarantee that its stockholders will approve this matter, and if they fail to do so its operations may be materially harmed.
Under the terms of the Merger Agreement, Salarius agreed following the consummation of the Merger to use reasonable best efforts to call and hold a meeting of Salarius stockholders to obtain the requisite approval for the conversion of all outstanding shares of Series A Preferred Stock issued in the Merger into shares of Salarius Common Stock, as required by the Nasdaq listing rules, as soon as practicable after the Merger Closing of the Merger and, if such approval is not obtained at that meeting, to seek to obtain such approval at an annual or special stockholders meeting to be held at least every four months thereafter until such approval is obtained, which would be time-consuming and costly and could significantly negatively affect Salarius’ projected cash position.
Because the lack of a public market for Decoy’s capital stock makes it difficult to evaluate the value of Decoy’s capital stock, the stockholders of Decoy may receive shares of Salarius common stock in the Merger that have a value that is greater than, the fair market value of Decoy’s capital stock.
The outstanding capital stock of Decoy is privately held and is not traded in any public market.
The lack of a public market makes it extremely difficult to determine the fair market value of Decoy.
Because the percentage of Salarius common stock to be issued to Decoy’s stockholders was determined based on negotiations between the parties, it is possible that Salarius may pay more than the aggregate fair market value for Decoy.
The combined company may become involved in securities class action litigation that could divert management’s attention and harm the combined company’s business and insurance coverage may not be sufficient to cover all costs and damages.
In the past, securities class action or shareholder derivative litigation often follows certain significant business transactions, such as the sale of a business division or announcement of a merger.
The combined company may become involved in this type of litigation in the future.
Litigation is often expensive and diverts management’s attention and resources, which could adversely affect the combined organization’s business.
The Merger Agreement between Salarius and Decoy may be terminated in accordance with its terms and the Merger may not be completed.
The Merger Agreement is subject to a number of conditions which must be fulfilled in order to complete the Merger.
Those conditions include, among other things: (i) the lack of a Material Adverse Effect on the respective businesses of Salarius and Decoy; (ii) the continued listing of Salarius’ Common Stock on The Nasdaq Capital Market (“Nasdaq”) through the Merger Closing; (iii) the absence of any order, injunction, decree or other legal restraint preventing the consummation of the Merger or any of the other transactions contemplated by the Merger Agreement or making the completion of the Merger or any of the other transactions contemplated by the Merger Agreement illegal; (iv) completion of the Qualified Financing and (v) the accuracy of the respective parties’ representations and warranties contained in the Merger Agreement (subject to certain customary qualifications) and compliance by Salarius and Decoy with its respective agreements and covenants contained in the Merger Agreement.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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