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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 Inc. for the periods prior to July 19, 2019, the Company 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 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, 2018 included elsewhere in the Company's current report on Form 8-K/A filed with the SEC on September 18, 2019. 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 September 30, 2019 and the results of operations for the three and nine months ended September 30, 2019 and 2018. The interim results of operations are not necessarily indicative of the results that may occur for the full fiscal year. The December 31, 2018 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 GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. On an on-going basis, Salarius’ management evaluates its estimates, including those related to revenue recognition, fair value of tangible and intangible assets, research and development, accrued expenses, contingencies and equity-based compensation. Salarius bases its estimates on historical experience and on various other assumptions that are believed to be reasonable. Actual results could differ from those estimates.

Cash, Cash Equivalents and Restricted Cash

Salarius considers all highly liquid securities with original final maturities of three months or less from the date of purchase to be cash equivalents.

At September 30, 2019 and December 31, 2018, Salarius held restricted cash of $0 and $2,903,493 for the Series A Preferred proceeds, respectively.

At September 30, 2019 and December 31, 2018, Salarius also held approximately $2.0 million and $4.1 million, respectively, for funds received from Cancer Prevention and Research Institution of Texas ("CPRIT"). These funds are to be used for costs for allowable expenses, primarily research and development expenses. The grant has a mandatory fund matching requirement. As of September 30, 2019, the CPRIT fund matching requirements had not been fully met.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred, while costs of major additions and betterments are capitalized. Upon disposal, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the results of operations. Depreciation is recorded,

once assets are placed in service, using the straight-line method over the estimated useful lives of the respective assets, which are as follows:


Asset classification						Useful life
Computer equipment						3 years
Laboratory equipment						5 years

Intangibles

Intangible assets that have finite useful lives are amortized over their useful lives, and are reviewed for impairment when warranted by economic conditions. Intangible assets are included in other assets in the Company's Statements of Financial Position.

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 nine months ended September 30, 2019, impairment charges related to long-lived assets was $0 and $110,474, respectively. There were no impairment charges related to long-lived assets for the three and nine months ended September 30, 2018.

Goodwill

Goodwill is not amortized but is subject to periodic review for impairment. Goodwill is reviewed annually, as of November 30, and whenever events or changes in circumstances indicate that the carrying amount of the goodwill might not be recoverable. Management performs its review of goodwill on its one reporting unit.

The Company performs a one-step test in its evaluation of the carrying value of goodwill, if qualitative factors determine it is necessary to complete a goodwill impairment test. In the evaluation, the fair value of the relevant reporting unit is determined and compared to the carrying value. If the fair value is greater than the carrying value, then the carrying value is deemed to be recoverable, and no further action is required. If the fair value estimate is less than the carrying value, goodwill is considered impaired for the amount by which the carrying amount exceeds the reporting unit’s fair value, and a charge is reported in impairment of goodwill in the Company’s consolidated statements of operations.

The Company has not identified any events or changes in circumstances that indicate that a potential impairment of goodwill occurred during the nine months ended September 30, 2019.

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, restricted cash, 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 measured at fair value on a recurring basis for the nine months ended September 30, 2019:


Description	Balance at December 31, 2018		Established		Change in Fair Value		Balance at September 30, 2019
Warrant liability	$	—	$	1,629,095	$	(1,130,848)	$	498,247

The following table identifies the carrying amounts of such liabilities at September 30, 2019:


	Level 1		Level 2		Level 3		Total
Warrant liability	$	—	$	—	$	498,247	$	498,247
Balance at September 30, 2019	$	—	$	—	$	498,247	$	498,247

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.

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.

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.

Earnings (Loss) Per Share

Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period.

For periods of net income, and when the effects are not anti-dilutive, diluted earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of shares outstanding plus the impact of all potential dilutive common shares, consisting primarily of common shares underlying common stock options and stock purchase warrants using the treasury stock method, and convertible notes using the if-converted method.

For periods of net loss, diluted loss per share is calculated similarly to basic loss per share because the impact of all potential dilutive common shares is antidilutive.

The number of anti-dilutive shares, consisting of common shares underlying (i) common stock options, (ii) stock purchase warrants, (iii) unvested restricted stock and (iv) rights entitling holders to receive warrants to purchase the Company's common shares, which have been excluded from the computation of diluted loss per share, was 389,488 and 51,926 shares as of September 30, 2019 and 2018, respectively.

Reclassification

Certain reclassifications have been made to the prior-year financial statements to conform to the current-year presentation.

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 February 2016, the FASB issued guidance for accounting for leases. The guidance requires lessees to recognize assets and liabilities related to long-term leases on the balance sheet and expands disclosure requirements regarding leasing arrangements. The guidance is effective for reporting periods beginning after December 15, 2018 for public entities. The guidance must be adopted on a modified retrospective basis and provides for certain practical expedients. The Company adopted this guidance effective January 1, 2019 using the following practical expedients:

•the Company did not reassess if any expired or existing contracts are or contain leases; and

•the Company did not reassess the classification of any expired or existing leases.

Upon adoption of the new guidance on January 1, 2019, there was no impact on the Company’s financial statements.

Additionally, the Company made ongoing accounting policy elections whereby the Company (i) does not recognize right-of-use assets or lease liabilities for short-term leases (those with original terms of 12-months or less) and (ii) combines lease and non-lease elements of its operating leases.

REVERSE ACQUISITION AND DISPOSAL

9 Months Ended

Sep. 30, 2019

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 and the surviving company of the merger. 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 formulae 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 6.

The Company accounted for the acquisition as a reverse merger using purchase accounting. Because the merger qualifies 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

Disposition of HOTSHOT Business

On July 24, 2019, the Company sold specified assets related to the HOTSHOT business to Cliff-Cartwright Corporation, an unrelated party, for cash consideration of $299,135. HOTSHOT was a consumer product that prevents and targets exercise-associated muscle cramps. The Company acquired the HOTSHOT business as a result of the reverse acquisition with Flex Pharma. The transaction was treated as a sale of a business. Details of the transaction are as follows:


Proceeds from sale	$	299,135
Carrying value of tangible assets sold	(135,544)
Carrying value of goodwill and intangible assets sold	(71,990)
Cost incurred related to the sale	(94,861)
Liabilities transferred upon sale	3,260
Total gain on sale of HOTSHOT	$	—

The Company had no assets and liabilities presented as discontinued operations as of September 30, 2019 and December 31, 2018.

Unaudited Pro Forma Disclosure

The following unaudited pro forma financial information summarizes the results of operations for the nine months ended September 30, 2019 and 2018 as if the merger and disposal described above had been completed as of January 1, 2018. Pro forma information primarily reflects adjustments relating to the reversal of transaction costs. Assuming that the merger had been completed as of January 1, 2018, the transaction costs would have been expensed in the prior period.


	Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
Revenues	$	2,426,362	$	1,312,752
Net loss	(7,802,709)		(18,034,908)
Net loss per share	(2.08)		(4.81)

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

Reverse Acquisition


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


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

Disposition of HOTSHOT Business


Proceeds from sale	$	299,135
Carrying value of tangible assets sold	(135,544)
Carrying value of goodwill and intangible assets sold	(71,990)
Cost incurred related to the sale	(94,861)
Liabilities transferred upon sale	3,260
Total gain on sale of HOTSHOT	$	—

The Company had no assets and liabilities presented as discontinued operations as of September 30, 2019 and December 31, 2018.

Unaudited Pro Forma Disclosure


	Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
Revenues	$	2,426,362	$	1,312,752
Net loss	(7,802,709)		(18,034,908)
Net loss per share	(2.08)		(4.81)

PREPAID EXPENSES AND OTHER CURRENT ASSETS

9 Months Ended

Sep. 30, 2019

PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets at September 30, 2019 and December 31, 2018 consisted of the following:


	September 30, 2019		December 31, 2018
Prepaid clinical trial expenses	$	247,460	$	210,333
Prepaid insurance	873,277		16,484

Other prepaid and current assets	118,971		22,269
Total prepaid expenses and other current assets	$	1,239,708	$	249,086

COMMITMENTS AND CONTINGENCIES	9 Months Ended
COMMITMENTS AND CONTINGENCIES	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES License Agreement with the University of Utah Research Foundation In 2011, the Company entered into a license agreement with the University of Utah, under which, the Company acquired license to LSD 1. In exchange for the license, the Company issued 2% equity ownership in the Company based on a fully diluted basis at the effective date of the agreement and subject to certain adjustments specified in the agreement, granted revenue sharing rights on any resulting products or processes to commence on first commercial sale, and milestone payments based upon regulatory approval of any resulting product or process as well as on the second anniversary of first commercial sale. Cancer Prevention and Research Institute of Texas In June 2016, the Company entered into a Cancer Research Grant Contract with CPRIT. Pursuant to the contract, CPRIT awarded the Company a grant up to $18.7 million to fund development of LSD 1 inhibitor. This is a 3-year grant award originally expired on May 31, 2019. A six-month extension was approved by CPRIT in May 2019. The grant now expires on November 30, 2019 with extensions available. The Company will retain ownership over any intellectual property developed under the contract ("Project Result"). With respect to non-commercial use of any Project Result, the Company agreed to grant to CPRIT a nonexclusive, irrevocable, royalty-free, perpetual, worldwide license with right to sublicense any necessary additional intellectual property rights to exploit all Project Results by CPRIT, other governmental entities and agencies of the State of Texas, and private or independent institutions of higher education located in Texas, for education, research and other non-commercial purposes. The Company is obligated to make revenue-sharing payments to CPRIT with respect to net sales of any product covered by the contract, up to a maximum repayment of certain percentage of the aggregate amount paid to the Company by CPRIT under the CPRIT contract. The payments are determined as a percentage of net sales, which may be reduced if the Company is required to obtain a license from a third party to sell any such product. In addition, upon meeting the foregoing limitation on revenue-sharing payments, the Company agreed to make continued revenue-sharing payments to CPRIT of less than 1% of net sales. 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 September 30, 2019, 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. There was no funding received from CPRIT during the nine months ended September 30, 2019. At September 30, 2019 and December 31, 2018, the Company had deferred revenue of $1,580,394 and $4,006,755, respectively, related to CPRIT contract. Lease Agreement The Company presently leases office space under operating lease agreements on a month to month basis.

STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2019

STOCKHOLDERS' EQUITY

The accompanying condensed consolidated statements of shareholders' equity and the footnotes to the 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 722,568 shares after reverse stock-split.

Common Stock

During the nine months ended September 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) of which, $2,869,412 was received in advance, in 2018.

In October 2018, 1,366,448 of Private Salarius' Series 1 preferred units were converted into 355,676 common shares (1,530 Series A preferred units).

In December 2018, the Company agreed to grant an unrelated party 12,907 common shares (91 common units of Private Salarius) to acquire licenses for the DNMT1 inhibitor. The grant was approved in January 2019 and the license was granted in 2018. These common shares were valued at $110,474 based on a third-party valuation report and included in accrued liabilities at December 31, 2018.

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:


	July 19, 2019		September 30, 2019
Discount rate	1.80	%	1.55	%
Expected life (years)	5.50 years		5.31 years
Expected volatility	96.02	%	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 September 30, 2019, all warrants issued to Wedbush were outstanding.

EQUITY-BASED COMPENSATION

9 Months Ended

Sep. 30, 2019

EQUITY-BASED COMPENSATION

Private Salarius' Grants

During the nine months ended September 30, 2019, the Company granted a total of 8,799 restricted common shares (137 profit interest units of Private Salarius) to two employees and one consultant with a vesting period ranging from 9 months to 4 years. These common shares have an aggregated fair value of approximately $83,000 that was calculated using the Backsolve method.

During the nine months ended September 30, 2019, 27,457 shares of common stock for Private Salarius' grants vested. As of September 30, 2019, there were 12,488 unvested restricted common stock issued in the Company.

Compensation expense related to Private Salarius' grants was $47,477 and $52,781 for the nine months ended September 30, 2019 and 2018, respectively. As of September 30, 2019, there was $37,419 of unrecognized compensation cost related to Private Salarius’ non-vested grants.

Equity Incentive Plans

The Company has granted options to employees, directors, and consultants under the Flex Pharma Inc. 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 that continue to be exercisable. 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 September 30, 2019, there were 17 shares remaining available for the grant of stock awards under the 2015 Plan.

The Company has awarded stock options to its employees, directors and consultants, 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.

The following table summarizes stock option activity for employees and non-employees for the nine months ended September 30, 2019:


	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2018	—	$	—	—	$	—
Granted	101,082	8.00
Options from Flex Pharma	90,279	102.22
Exercised	—	—
Forfeited	—	—
Expired	—	—
Outstanding at September 30, 2019	191,361	$	52.45	5.91	$	—
Exercisable at September 30, 2019	91,059	$	101.41	1.45	$	—

As of September 30, 2019, there was approximately $610,114 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 3.22 years.

On September 10, 2019, the Company granted 101,082 stock options, in the aggregate, to certain employees, directors and a consultant. These awards vest monthly over 3 months to 4 years as continuous services are provided, and expense is being recognized over this period.

RELATED PARTIES	9 Months Ended
RELATED PARTIES	Sep. 30, 2019
Related Party Transactions [Abstract]
RELATED PARTIES	RELATED PARTIESAs of September 30, 2019 and December 31, 2018, the Company has $4,429 and $5,946 payable to Iterion Therapeutics (formerly BetaCat), respectively, for expenses Iterion paid on behalf of the Company. The Company's Chairman is a director of Iterion Therapeutics.

LOSS PER SHARE

9 Months Ended

Sep. 30, 2019

LOSS PER SHARE

LOSS PER SHAREThe following table shows the computation of basic and diluted loss per common share for continuing operations for the three and nine-month periods ended September 30, 2019 and 2018. For the periods prior to July 19, 2019, the Company retrospectively adjusted the weighted average shares used in determining loss per common share to reflect the common units, profits interest common units and Series A Preferred Units of Private Salarius that converted into shares of the Company’s common stock, and adjusted to give effect to the 25 to 1 reverse stock split of the Company’s common stock upon closing of the merger.


	Three Months Ended September 30, 2019		Three Months Ended September 30, 2018		Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
Numerator:
Loss from continuing operations	$	(2,630,069)	$	(307,450)	$	(5,055,790)	$	(577,766)
Preferred dividends	—		(24,580)		—		(88,015)
Loss from continuing operations attributable to common stock shareholders	$	(2,630,069)	$	(332,030)	$	(5,055,790)	$	(665,781)

Denominator:
Weighted-average common shares outstanding - basic and diluted	3,605,913		1,653,340		3,002,736		1,407,062
Loss per common share - basic and diluted - continuing operations	(0.73)		(0.20)		(1.68)		(0.47)

For the three and nine-month periods ended September 30, 2018, accrued dividend for Private Salarius' Series 1 preferred units was $24,580 and $88,015, respectively. In October 2018, these Series 1 Preferred Units were converted into Private Salarius' Series A Preferred Units. On July 19, 2019, the Series A Preferred Units were exchanged for the Company's common shares upon the merger with Flex Pharma.

SUBSEQUENT EVENTS	9 Months Ended
SUBSEQUENT EVENTS	Sep. 30, 2019
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS Common Stock Purchase with Aspire Capital On October 24, 2019, the Company entered into a common stock purchase agreement with Aspire Capital, which provides that the Company may offer to Aspire Capital up to an aggregate of $10.9 million of the Company's common shares over 30 months. Upon execution of the agreement, the Company sold to Aspire Capital 210,526 shares of common stock at $4.75 per share for proceeds of $1.0 million. In consideration for entering into the purchase agreement, the Company issued to Aspire Capital 101,810 common shares. The purchase agreement may be terminated by the Company at any time, at its discretion, without any cost to the Company. Under the purchase agreement, on any trading day when the closing sale price of the Company’s common stock is more than $0.25 per share, the Company has the right, in its sole discretion, to direct Aspire Capital to purchase up to 50,000 shares of the Company’s common stock per business day, up to $500,000 of the Company’s common stock in the aggregate at a per share price equal to the lesser of: •the lowest sale price of the Company’s common stock on the purchase date; or •the arithmetic average of the three lowest closing sale prices for the Company’s common stock during the ten consecutive trading days ending on the trading day immediately preceding the purchase date. The Company and Aspire Capital also may mutually agree to increase the number of shares that may be sold to as much as an additional 2,000,000 shares per business day. In addition, on any date on which the Company submits a notice to Aspire Capital in an amount equal to 50,000 shares, the Company also has the right, in its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of the Company’s common stock traded on its principal market on the next trading day ("VWAP Purchase Date"), subject to a maximum number of shares the Company may determine. The purchase price per share pursuant to such notice is generally 97% of the volume-weighted average price for the Company’s common stock traded on its principal market on the VWAP Purchase Date. Pursuant to the purchase agreement, in no case may the Company issue more than 750,861 shares of the Company’s common stock (which equals approximately 19.99% of the Company’s common shares outstanding on October 24, 2019) to Aspire Capital unless (i) the average price paid for all shares issued under the agreement is at least $4.75 per share or (ii) the Company receives stockholder approval to issue more shares to Aspire Capital. There are no other trading volume requirements or restrictions under the purchase agreement and the Company will control the timing and amount of the Company’s common shares sell to Aspire Capital. Aspire Capital has no right to require any sales by the Company, but is obligated to make purchases from the Company as directed.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2019

Principles of Consolidation

Basis of Presentation

Use of Estimates

Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted CashSalarius considers all highly liquid securities with original final maturities of three months or less from the date of purchase to be cash equivalents.

Property and Equipment

once assets are placed in service, using the straight-line method over the estimated useful lives of the respective assets, which are as follows:


Asset classification						Useful life
Computer equipment						3 years
Laboratory equipment						5 years

Intangibles

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

Fair Value of Financial Instruments

Level 1-Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 3-Significant unobservable inputs including Salarius’ own assumptions in determining fair value.

Financial Instruments and Credit Risks

Revenue Recognition

Research and Development Costs

Equity-Based Compensation

Earnings (Loss) Per Share

Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period.

For periods of net loss, diluted loss per share is calculated similarly to basic loss per share because the impact of all potential dilutive common shares is antidilutive.

Reclassification

Certain reclassifications have been made to the prior-year financial statements to conform to the current-year presentation.

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

•the Company did not reassess if any expired or existing contracts are or contain leases; and

•the Company did not reassess the classification of any expired or existing leases.

Upon adoption of the new guidance on January 1, 2019, there was no impact on the Company’s financial statements.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2019

Schedule of Property and Equipment Useful Life

Depreciation is recorded,

once assets are placed in service, using the straight-line method over the estimated useful lives of the respective assets, which are as follows:


Asset classification						Useful life
Computer equipment						3 years
Laboratory equipment						5 years

Summary of Changes in Fair Value of Level 3 Liabilities

The following table sets forth a summary of changes in the fair value of Level 3 liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2019:


Description	Balance at December 31, 2018		Established		Change in Fair Value		Balance at September 30, 2019
Warrant liability	$	—	$	1,629,095	$	(1,130,848)	$	498,247

Schedule of Assets and Liabilities Measured at Fair Value

The following table identifies the carrying amounts of such liabilities at September 30, 2019:


	Level 1		Level 2		Level 3		Total
Warrant liability	$	—	$	—	$	498,247	$	498,247
Balance at September 30, 2019	$	—	$	—	$	498,247	$	498,247

REVERSE ACQUISITION AND DISPOSAL (Tables)

9 Months Ended

Sep. 30, 2019

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

Summary of Sale of Business

Details of the transaction are as follows:


Proceeds from sale	$	299,135
Carrying value of tangible assets sold	(135,544)
Carrying value of goodwill and intangible assets sold	(71,990)
Cost incurred related to the sale	(94,861)
Liabilities transferred upon sale	3,260
Total gain on sale of HOTSHOT	$	—

Schedule of Unaudited Pro Forma Results


	Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
Revenues	$	2,426,362	$	1,312,752
Net loss	(7,802,709)		(18,034,908)
Net loss per share	(2.08)		(4.81)

- Definition

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

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+ Details

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables)

9 Months Ended

Sep. 30, 2019

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

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets at September 30, 2019 and December 31, 2018 consisted of the following:


	September 30, 2019		December 31, 2018
Prepaid clinical trial expenses	$	247,460	$	210,333
Prepaid insurance	873,277		16,484

Other prepaid and current assets	118,971		22,269
Total prepaid expenses and other current assets	$	1,239,708	$	249,086

STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2019

Schedule of Variables used in Black-Scholes Model

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


	July 19, 2019		September 30, 2019
Discount rate	1.80	%	1.55	%
Expected life (years)	5.50 years		5.31 years
Expected volatility	96.02	%	103.07	%
Expected dividend	—	%	—	%

EQUITY-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2019

Summary of Stock Option Activity

The following table summarizes stock option activity for employees and non-employees for the nine months ended September 30, 2019:


	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2018	—	$	—	—	$	—
Granted	101,082	8.00
Options from Flex Pharma	90,279	102.22
Exercised	—	—
Forfeited	—	—
Expired	—	—
Outstanding at September 30, 2019	191,361	$	52.45	5.91	$	—
Exercisable at September 30, 2019	91,059	$	101.41	1.45	$	—

LOSS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2019

Schedule of Earnings Per Share, Basic and Diluted

The following table shows the computation of basic and diluted loss per common share for continuing operations for the three and nine-month periods ended September 30, 2019 and 2018. For the periods prior to July 19, 2019, the Company retrospectively adjusted the weighted average shares used in determining loss per common share to reflect the common units, profits interest common units and Series A Preferred Units of Private Salarius that converted into shares of the Company’s common stock, and adjusted to give effect to the 25 to 1 reverse stock split of the Company’s common stock upon closing of the merger.


	Three Months Ended September 30, 2019		Three Months Ended September 30, 2018		Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
Numerator:
Loss from continuing operations	$	(2,630,069)	$	(307,450)	$	(5,055,790)	$	(577,766)
Preferred dividends	—		(24,580)		—		(88,015)
Loss from continuing operations attributable to common stock shareholders	$	(2,630,069)	$	(332,030)	$	(5,055,790)	$	(665,781)

Denominator:
Weighted-average common shares outstanding - basic and diluted	3,605,913		1,653,340		3,002,736		1,407,062
Loss per common share - basic and diluted - continuing operations	(0.73)		(0.20)		(1.68)		(0.47)

ORGANIZATION AND OPERATIONS (Details) - Subsequent Event - Stock Purchase Agreement	Oct. 24, 2019 USD ($)
Subsidiary, Sale of Stock [Line Items]
Aggregate amount issuable	$ 10,900,000
Agreement term	30 months

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details)		3 Months Ended		9 Months Ended
	Jul. 19, 2019	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) numberOfReportableUnits shares	Sep. 30, 2018 USD ($) shares	Dec. 31, 2018 USD ($)
Class of Stock [Line Items]
Restricted cash		$ 0		$ 0		$ 2,903,493
Grant contract amount		2,000,000.0		2,000,000.0		$ 4,100,000
Impairment charges of long-lived assets		$ 0	$ 0	$ 110,474	$ 0
Number of reporting units \| numberOfReportableUnits				1
Antidilutive securities excluded from computation of earnings per share (shares) \| shares				389,488	51,926
Common Stock
Class of Stock [Line Items]
Conversion ratio	25

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Schedule of Property and Equipment Useful Life (Details)	9 Months Ended
	Sep. 30, 2019
Computer equipment
Property, Plant and Equipment [Line Items]
Useful life	3 years
Laboratory equipment
Property, Plant and Equipment [Line Items]
Useful life	5 years

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Summary of Changes in Fair Value of Level 3 Liabilities (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Change in Fair Value	$ (1,130,848)	$ 0	$ (1,130,848)	$ 0
Recurring \| Level 3
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at December 31, 2018			0
Established			1,629,095
Change in Fair Value			(1,130,848)
Balance at September 30, 2019	$ 498,247		$ 498,247

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Schedule of Assets and Liabilities Measured at Fair Value (Details) - Recurring	Sep. 30, 2019 USD ($)
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrant liability	$ 498,247
Total	498,247
Level 1
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrant liability	0
Total	0
Level 2
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrant liability	0
Total	0
Level 3
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrant liability	498,247
Total	$ 498,247

REVERSE ACQUISITION AND DISPOSAL - Narrative (Details)			9 Months Ended
REVERSE ACQUISITION AND DISPOSAL - Narrative (Details)	Jul. 24, 2019 USD ($)	Jul. 19, 2019 shares	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)
Business Acquisition [Line Items]
Period the right is unexercisable		6 months
Proceeds from sale			$ 204,274	$ 0
Disposed of by Sale \| HotShot Business
Business Acquisition [Line Items]
Proceeds from sale	$ 299,135
Common Stock
Business Acquisition [Line Items]
Conversion ratio		25
Number of rights per share \| shares		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
Fair value of assets acquired	14,587,447
Accounts payable, accrued liabilities and other current liabilities	1,862,599
Fair value of liabilities assumed	1,862,599
Net assets acquired	$ 12,724,848

REVERSE ACQUISITION AND DISPOSAL - Summary of Sale of Business (Details) - USD ($)		9 Months Ended
	Jul. 24, 2019	Sep. 30, 2019	Sep. 30, 2018
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from sale		$ 204,274	$ 0
Disposed of by Sale \| HotShot Business
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from sale	$ 299,135
Carrying value of tangible assets sold	(135,544)
Carrying value of goodwill and intangible assets sold	(71,990)
Cost incurred related to the sale	(94,861)
Liabilities transferred upon sale	3,260
Total gain on sale of HOTSHOT	$ 0

REVERSE ACQUISITION AND DISPOSAL - Schedule of Unaudited Pro Forma Results (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Business Combinations [Abstract]
Revenues	$ 2,426,362	$ 1,312,752
Net loss	$ (7,802,709)	$ (18,034,908)
Net loss per share (in dollars per share)	$ (2.08)	$ (4.81)

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid clinical trial expenses	$ 247,460	$ 210,333
Prepaid insurance	873,277	16,484
Other prepaid and current assets	118,971	22,269
Total prepaid expenses and other current assets	$ 1,239,708	$ 249,086

COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	1 Months Ended		9 Months Ended
COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	May 31, 2019	Jun. 30, 2016	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2011
Commitments and Contingencies Disclosure [Abstract]
Ownership percentage by noncontrolling Owner					2.00%
Award amount		$ 18,700,000
Award term		3 years
Extension term	6 months
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			$ 1,580,394	$ 4,006,755

STOCKHOLDERS' EQUITY - Narrative (Details)		1 Months Ended		3 Months Ended		9 Months Ended	12 Months Ended
STOCKHOLDERS' EQUITY - Narrative (Details)	Jul. 19, 2019 USD ($) trading_Days $ / shares shares	Dec. 31, 2018 USD ($) shares	Oct. 31, 2018 shares	Mar. 31, 2019 USD ($) shares	Jun. 30, 2018 USD ($) shares	Sep. 30, 2019 USD ($) shares	Dec. 31, 2018 USD ($) shares	Jun. 30, 2019 shares	Jan. 20, 2019	Sep. 30, 2018 shares	Mar. 31, 2018 shares	Dec. 31, 2017 shares
Class of Stock [Line Items]
Common stock, shares outstanding		2,032,763				3,756,184	2,032,763
Shares issued, value \| $				$ 4,377,591	$ 2,025,269	$ 4,377,591
Offering costs \| $						$ 10,617
Amount received from issuance \| $							$ 2,869,412
Shares issued upon conversion			355,676
Issuance of equity securities for license \| $		$ 110,474		$ 110,474
Number of shares called by warrants	142,711
Expected life (years)	5 years 6 months					5 years 3 months 21 days			5 years
Exercise price (in dollars per share) \| $ / shares	$ 15.17
Consecutive trading days \| trading_Days	10
Common Stock
Class of Stock [Line Items]
Conversion ratio	25
Common stock, shares outstanding		2,032,763		3,015,709	1,653,316	3,756,184	2,032,763	3,024,619		1,665,106	1,190,087	1,178,604
Shares issued				960,489	451,826	960,489
Shares issued, value \| $				$ 960	$ 452
Issuance of equity securities for license (shares)		12,907		12,907
Issuance of equity securities for license \| $				$ 13
Number of rights per share	1
Common Stock \| Flex Pharma
Class of Stock [Line Items]
Conversion ratio	25
Common stock, shares outstanding	722,568
Series A Preferred
Class of Stock [Line Items]
Shares issued upon conversion			1,530
Series A Preferred \| Common Stock
Class of Stock [Line Items]
Shares issued						4,035
Profit Interest Units \| Common Stock
Class of Stock [Line Items]
Shares issued						350
Preferred Units
Class of Stock [Line Items]
Shares converted			1,366,448
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]
Number of shares called by warrants	42,928
Expected life (years)	5 years
Exercise price (in dollars per share) \| $ / shares	$ 18.90
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)	Sep. 30, 2019	Jul. 19, 2019	Jan. 20, 2019
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Expected life (years)	5 years 3 months 21 days	5 years 6 months	5 years
Discount rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants measurement input	1.55%	1.80%
Expected volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants measurement input	103.07%	96.02%
Expected dividend
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants measurement input	0.00%	0.00%

EQUITY-BASED COMPENSATION - Narrative (Details)		9 Months Ended
EQUITY-BASED COMPENSATION - Narrative (Details)	Sep. 10, 2019 shares	Sep. 30, 2019 USD ($) numberOfGrantees shares	Sep. 30, 2018 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense \| $		$ 47,477	$ 52,781
Unrecognized compensation cost \| $		37,419
Unrecognized compensation cost, options \| $		$ 610,114
Unrecognized compensation cost, recognition period		3 years 2 months 19 days
Number of stock options granted (shares)	101,082	101,082
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted		8,799
Fair value \| $		$ 83,000
Shares vested		27,457
Shares issued, unvested		12,488
Employee stock option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options, contractual term		10 years
Employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of grantees \| numberOfGrantees		2
Consultant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of grantees \| numberOfGrantees		1
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 months
Minimum \| Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		9 months
Minimum \| Employee stock option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		1 year
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
Maximum \| Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		4 years
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)		17
Profit Interest Units \| Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted		137

EQUITY-BASED COMPENSATION - Summary of stock option activity (Details) - USD ($)		9 Months Ended
	Sep. 10, 2019	Sep. 30, 2019	Dec. 31, 2018
Shares
Shares outstanding, Beginning Balance (shares)		0
Shares granted (shares)	101,082	101,082
Options from Flex Pharma (shares)		90,279
Shares exercised (shares)		0
Shares forfeited (shares)		0
Shares expired (shares)		0
Shares outstanding, Ending Balance (shares)		191,361
Shares exercisable (shares)		91,059
Weighted-Average Exercise Price
Shares outstanding, weighted-average exercise price, Beginning Balance (in usd per share)		$ 0
Shares granted, weighted-average exercise price (in usd per share)		8.00
Options from Flex Pharma, weighted-average exercise price (in usd per share)		102.22
Shares exercised, weighted-average exercise price (in usd per share)		0
Shares forfeited, weighted-average exercise price (in usd per share)		0
Shares expired, weighted-average exercise price (in usd per share)		0
Shares outstanding, weighted-average exercise price, Ending Balance (in usd per share)		52.45
Shares exercisable, weighted-average exercise price (in usd per share)		$ 101.41
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Outstanding, weighted-average remaining contractual term		5 years 10 months 28 days
Exercisable, weighted-average remaining contractual term		1 year 5 months 12 days
Outstanding, aggregate intrinsic value		$ 0	$ 0
Exercisable, aggregate intrinsic value		$ 0

RELATED PARTIES (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Related Party Transactions [Abstract]
Due to related parties	$ 4,429	$ 5,946

LOSS PER SHARE (Details) - USD ($)	3 Months Ended		9 Months Ended
LOSS PER SHARE (Details) - USD ($)	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Numerator:
Loss from continuing operations	$ (2,630,069)	$ (307,450)	$ (5,055,790)	$ (577,766)
Preferred dividends	0	(24,580)	0	(88,015)
Loss from continuing operations attributable to common stock shareholders	$ (2,630,069)	$ (332,030)	$ (5,055,790)	$ (665,781)
Denominator:
Weighted-average number of common shares outstanding — basic and diluted	3,605,913	1,653,340	3,002,736	1,407,062
Loss per common share - basic and diluted - continuing operations (usd per share)	$ (0.73)	$ (0.20)	$ (1.68)	$ (0.47)

SUBSEQUENT EVENTS (Details) - Subsequent Event	Oct. 24, 2019 USD ($) sales_Price $ / shares shares
Subsequent Event [Line Items]
Number of lowest closing sale prices during ten consecutive trading days \| sales_Price	3
Stock Purchase Agreement
Subsequent Event [Line Items]
Aggregate amount issuable \| $	$ 10,900,000
Agreement term	30 months
Number of shares issued	210,526
Price per share (usd per share) \| $ / shares	$ 4.75
Proceeds \| $	$ 1,000,000.0
Stock price trigger (usd per share) \| $ / shares	$ 0.25
Maximum shares purchasable per business day	50,000
Aggregate maximum amount \| $	$ 500,000
Additional shares purchasable per business day	2,000,000
Shares purchased per business day	50,000
Threshold percentage of aggregate shares of stock traded next trading day	30.00%
Threshold percentage of aggregate shares traded on principle market next day	97.00%
Maximum shares issuable	750,861
Maximum Shares issuable, percentage of shares outstanding	19.99%
Minimum price (in dollars per share) \| $ / shares	$ 4.75
Registration Rights Agreement
Subsequent Event [Line Items]
Number of shares issued	101,810

COVER PAGE - shares	9 Months Ended
COVER PAGE - shares	Sep. 30, 2019	Nov. 11, 2019
Cover page.
Entity Registrant Name	SALARIUS PHARMACEUTICALS, INC.
Entity Central Index Key	0001615219
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Common Stock, Shares Outstanding		4,068,520
Entity Current Reporting Status	Yes
Entity Shell Company	false
Title of 12(b) Security	Common Stock, $ 0.0001 par value
Trading Symbol	SLRX
Security Exchange Name	NASDAQ
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-36812
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	2450 Holcombe Blvd
Entity Address, Address Line Two	Suite J 608
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77021
Entity Tax Identification Number	46-5087339
City Area Code	346
Local Phone Number	772-0346
Entity Interactive Data Current	Yes

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 3,999,676	$ 3,228,288
Restricted cash	0	2,903,493
Prepaid Expense and Other Assets, Current	1,239,708	249,086
Total current assets	5,239,384	6,380,867
Property and equipment, net	28,144	37,525
Goodwill	8,865,909	0
Other assets	324,509	195,431
Total assets	14,457,946	6,613,823
Current liabilities:
Accounts payable	1,643,083	373,834
Accrued expenses and other current liabilities	245,603	628,990
Due to related parties	4,429	5,946
Private Salarius accrued series A preferred units	0	2,869,412
Note payable	749,157	0
Deferred revenue	1,580,394	4,006,755
Warrant liability	498,247	0
Total liabilities	4,720,913	7,884,937
Commitments and Contingencies
Stockholders' equity (deficit):
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; none issued or outstanding	0	0
Common stock, $0.0001 par value; 100,000,000 shares authorized; 3,768,672 and 2,338,899 shares issued at September 30, 2019 and December 31, 2018, and 3,756,184 and 2,032,763 shares outstanding at September 30, 2019 and December 31, 2018, respectively	3,756	2,033
Additional paid-in capital	19,927,156	3,867,290
Accumulated deficit	(10,193,879)	(5,140,437)
Total stockholders' equity (deficit)	9,737,033	(1,271,114)
Total liabilities and stockholders' equity (deficit)	$ 14,457,946	$ 6,613,823

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
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	3,768,672	2,338,899
Common stock, shares outstanding	3,756,184	2,032,763

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Statement [Abstract]
Revenue	$ 874,949	$ 469,051	$ 2,426,362	$ 1,312,752
Operating expenses:
Research and development	1,140,909	353,607	2,680,982	803,846
General and administrative	3,494,205	428,958	5,950,431	1,093,596
Total operating expenses	4,635,114	782,565	8,631,413	1,897,442
Loss before other income (expense)	(3,760,165)	(313,514)	(6,205,051)	(584,690)
Change in fair value of warrant liability	1,130,848	0	1,130,848	0
Interest income (expense), net	(752)	6,064	18,413	6,924
Loss from continuing operations	(2,630,069)	(307,450)	(5,055,790)	(577,766)
Income from discontinued operations	2,348	0	2,348	0
Net loss	(2,627,721)	(307,450)	(5,053,442)	(577,766)
Preferred dividends	0	(24,580)	0	(88,015)
Loss from continuing operations attributable to common stock shareholders	$ (2,630,069)	$ (332,030)	$ (5,055,790)	$ (665,781)
Loss per common share — basic and diluted
Continuing operations (usd per share)	$ (0.73)	$ (0.20)	$ (1.68)	$ (0.47)
Discontinued operations (usd per share)	0	0	0	0
Total net loss per share (usd per share)	$ (0.73)	$ (0.20)	$ (1.68)	$ (0.47)
Weighted-average number of common shares outstanding — basic and diluted	3,605,913	1,653,340	3,002,736	1,407,062

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Operating activities
Net loss	$ (5,053,442)	$ (577,766)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation, amortization and impairment	123,174	12,713
Equity-based compensation expense	579,721	52,781
Change in fair value of warrant liability	(1,130,848)	0
Changes in operating assets and liabilities:
Accounts receivable	690	0
Inventory	1,169	0
Prepaid expenses and other current assets	(206,956)	(274,432)
Accounts payable	(593,351)	(452,102)
Accrued expenses and other current liabilities	(235,817)	29,383
Due to/from related party	(1,517)
Due to/from related party		21,728
Deferred revenue	(2,426,361)	3,687,248
Private Salarius accrued Series A investment	0	1,290,098
Net cash provided by (used in) operating activities	(8,943,538)	3,789,651
Investing activities
Net cash received in reverse acquisition	5,403,634	0
Net proceeds received from disposal of discontinued operations	204,274	0
Net cash provided by investing activities	5,607,908	0
Financing activities
Payments to redeem equity securities	0	(250,000)
Proceeds from issuance of equity securities	1,508,179	2,050,269
Payment of dividends	(133,594)	(58,959)
Payments on note payable	(171,060)	0
Net cash provided by financing activities	1,203,525	1,741,310
Net (decrease) increase in cash, cash equivalents and restricted cash	(2,132,105)	5,530,961
Cash, cash equivalents and restricted cash at beginning of period	6,131,781	519,337
Cash, cash equivalents and restricted cash at end of period	$ 3,999,676	$ 6,050,298

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Supplemental disclosure of cash flow information:
Cash paid for interest	$ 6,867	$ 0
Cash paid for income taxes	0	0
Non-cash investing and financing activities:
Shares issued	110,474	0
Conversion of liabilities to equity securities	2,869,412	0
Prepaid expense financed by note payable	920,217	0
Business combinations
Non-cash investing and financing activities:
Shares issued	$ 11,093,561	$ 0

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($)	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit
Common stock, beginning balance (shares) at Dec. 31, 2017		1,178,604
Equity, beginning balance at Dec. 31, 2017	$ (2,900,426)	$ 1,179	$ 569,195	$ (3,470,800)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation expense (shares)		11,483
Equity-based compensation expense	0	$ 11	(11)
Distribution to stockholders	(33,896)		(33,896)
Net loss	(381,549)			(381,549)
Equity, ending balance at Mar. 31, 2018	(3,315,871)	$ 1,190	535,288	(3,852,349)
Common stock, ending balance (shares) at Mar. 31, 2018		1,190,087
Common stock, beginning balance (shares) at Dec. 31, 2017		1,178,604
Equity, beginning balance at Dec. 31, 2017	(2,900,426)	$ 1,179	569,195	(3,470,800)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(577,766)
Equity, ending balance at Sep. 30, 2018	(1,488,157)	$ 1,665	2,558,744	(4,048,566)
Common stock, ending balance (shares) at Sep. 30, 2018		1,665,106
Common stock, beginning balance (shares) at Mar. 31, 2018		1,190,087
Equity, beginning balance at Mar. 31, 2018	(3,315,871)	$ 1,190	535,288	(3,852,349)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation expense (shares)		11,403
Equity-based compensation expense	24,768	$ 11	24,757
Distribution to stockholders	(29,539)		(29,539)
Issuance of equity securities (shares)		451,826
Issuance of equity securities	2,025,269	$ 452	2,024,817
Net loss	111,233			111,233
Equity, ending balance at Jun. 30, 2018	(1,184,140)	$ 1,653	2,555,323	(3,741,116)
Common stock, ending balance (shares) at Jun. 30, 2018		1,653,316
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation expense (shares)		11,790
Equity-based compensation expense	28,013	$ 12	28,001
Distribution to stockholders	(24,580)		(24,580)
Net loss	(307,450)			(307,450)
Equity, ending balance at Sep. 30, 2018	$ (1,488,157)	$ 1,665	2,558,744	(4,048,566)
Common stock, ending balance (shares) at Sep. 30, 2018		1,665,106
Common stock, beginning balance (shares) at Dec. 31, 2018	2,032,763	2,032,763
Equity, beginning balance at Dec. 31, 2018	$ (1,271,114)	$ 2,033	3,867,290	(5,140,437)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation expense (shares)		9,550
Equity-based compensation expense	35,407	$ 10	35,397
Issuance of equity securities (shares)		960,489
Issuance of equity securities	4,377,591	$ 960	4,376,631
Issuance of equity securities for license (shares)		12,907
Issuance of equity securities for license	110,474	$ 13	110,461
Net loss	(1,522,076)			(1,522,076)
Equity, ending balance at Mar. 31, 2019	$ 1,730,282	$ 3,016	8,389,779	(6,662,513)
Common stock, ending balance (shares) at Mar. 31, 2019		3,015,709
Common stock, beginning balance (shares) at Dec. 31, 2018	2,032,763	2,032,763
Equity, beginning balance at Dec. 31, 2018	$ (1,271,114)	$ 2,033	3,867,290	(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	(5,053,442)
Equity, ending balance at Sep. 30, 2019	$ 9,737,033	$ 3,756	19,927,156	(10,193,879)
Common stock, ending balance (shares) at Sep. 30, 2019	3,756,184	3,756,184
Common stock, beginning balance (shares) at Mar. 31, 2019		3,015,709
Equity, beginning balance at Mar. 31, 2019	$ 1,730,282	$ 3,016	8,389,779	(6,662,513)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation expense (shares)		8,910
Equity-based compensation expense	(99,758)		(99,758)
Distribution to stockholders	6,034	$ 9	6,025
Net loss	(903,645)			(903,645)
Equity, ending balance at Jun. 30, 2019	732,913	$ 3,025	8,296,046	(7,566,158)
Common stock, ending balance (shares) at Jun. 30, 2019		3,024,619
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation expense (shares)		8,997
Equity-based compensation expense	538,280	$ 9	538,271
Effect of reverse acquisition (shares)		722,568
Effect of reverse acquisition	11,093,561	$ 722	11,092,839
Net loss	(2,627,721)			(2,627,721)
Equity, ending balance at Sep. 30, 2019	$ 9,737,033	$ 3,756	$ 19,927,156	$ (10,193,879)
Common stock, ending balance (shares) at Sep. 30, 2019	3,756,184	3,756,184

ORGANIZATION AND OPERATIONS	9 Months Ended
ORGANIZATION AND OPERATIONS	Sep. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND OPERATIONS	ORGANIZATION AND OPERATIONS Nature of Business Salarius Pharmaceuticals, Inc. (“Salarius” or the “Company”), together with its subsidiaries, Salarius Pharmaceuticals, LLC, Flex Innovation Group LLC, and TK Pharma, Inc., is a clinical-stage biotechnology company focused on developing effective epigenetic-based cancer treatments for indications with high unmet medical need. Salarius’ lead epigenetic enzyme technology was licensed from the University of Utah Research Foundation in 2011. The Company is located in Houston, Texas. 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 and the surviving company of the merger. 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. Going Concern and Management's Plan Salarius has no products approved for commercial sale, has not generated any revenue from product sales to date and has suffered recurring losses from operations since its inception. The lack of revenue from product sales to date and recurring losses from operations since its inception raise substantial doubt as to the Company's ability to continue as a going concern. The accompanying financial statements are prepared using accounting principles generally accepted in the United States applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities should the Company be unable to continue as a going concern. Salarius will require substantial additional capital to fund its research and development expenses related to its oncology drug Seclidemstat. Based on Salarius’ expected cash requirements, Salarius believes that there is substantial doubt that its existing cash and cash equivalents, including the cash resources obtained from the merger with Flex Pharma, will be sufficient to fund its operations through one year from the financial statements issuance date. On October 24, 2019, the Company entered into a common stock purchase agreement with Aspire Capital Fund, LLC (“Aspire Capital”), which provides that the Company may offer to Aspire Capital up to an aggregate of $10.9 million of the Company's common shares over 30 months. See Note 10. The Company intends to obtain additional capital through the sale of equity securities in one or more offerings or through issuances of debt instruments. The Company may also consider new collaborations or selectively partnering its technology. However, the Company cannot provide any assurance that it will be successful in accomplishing any of its plans.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2019

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Principles of Consolidation

Unaudited Interim Financial Information

Use of Estimates

Cash, Cash Equivalents and Restricted Cash

Salarius considers all highly liquid securities with original final maturities of three months or less from the date of purchase to be cash equivalents.

At September 30, 2019 and December 31, 2018, Salarius held restricted cash of $0 and $2,903,493 for the Series A Preferred proceeds, respectively.

Property and Equipment

once assets are placed in service, using the straight-line method over the estimated useful lives of the respective assets, which are as follows:


Asset classification						Useful life
Computer equipment						3 years
Laboratory equipment						5 years

Intangibles

Impairment of Long-Lived Assets

Goodwill

The Company has not identified any events or changes in circumstances that indicate that a potential impairment of goodwill occurred during the nine months ended September 30, 2019.

Fair Value of Financial Instruments

Level 1-Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 3-Significant unobservable inputs including Salarius’ own assumptions in determining fair value.

The following table sets forth a summary of changes in the fair value of Level 3 liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2019:


Description	Balance at December 31, 2018		Established		Change in Fair Value		Balance at September 30, 2019
Warrant liability	$	—	$	1,629,095	$	(1,130,848)	$	498,247

The following table identifies the carrying amounts of such liabilities at September 30, 2019:


	Level 1		Level 2		Level 3		Total
Warrant liability	$	—	$	—	$	498,247	$	498,247
Balance at September 30, 2019	$	—	$	—	$	498,247	$	498,247

Financial Instruments and Credit Risks

Revenue Recognition

Research and Development Costs

Equity-Based Compensation

Earnings (Loss) Per Share

Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period.

For periods of net loss, diluted loss per share is calculated similarly to basic loss per share because the impact of all potential dilutive common shares is antidilutive.

Reclassification

Certain reclassifications have been made to the prior-year financial statements to conform to the current-year presentation.

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

•the Company did not reassess if any expired or existing contracts are or contain leases; and

•the Company did not reassess the classification of any expired or existing leases.

Upon adoption of the new guidance on January 1, 2019, there was no impact on the Company’s financial statements.

REVERSE ACQUISITION AND DISPOSAL

9 Months Ended

Sep. 30, 2019

Reverse Acquisition


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


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

Disposition of HOTSHOT Business


Proceeds from sale	$	299,135
Carrying value of tangible assets sold	(135,544)
Carrying value of goodwill and intangible assets sold	(71,990)
Cost incurred related to the sale	(94,861)
Liabilities transferred upon sale	3,260
Total gain on sale of HOTSHOT	$	—

The Company had no assets and liabilities presented as discontinued operations as of September 30, 2019 and December 31, 2018.

Unaudited Pro Forma Disclosure


	Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
Revenues	$	2,426,362	$	1,312,752
Net loss	(7,802,709)		(18,034,908)
Net loss per share	(2.08)		(4.81)

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

Reverse Acquisition


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


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

Disposition of HOTSHOT Business


Proceeds from sale	$	299,135
Carrying value of tangible assets sold	(135,544)
Carrying value of goodwill and intangible assets sold	(71,990)
Cost incurred related to the sale	(94,861)
Liabilities transferred upon sale	3,260
Total gain on sale of HOTSHOT	$	—

The Company had no assets and liabilities presented as discontinued operations as of September 30, 2019 and December 31, 2018.

Unaudited Pro Forma Disclosure


	Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
Revenues	$	2,426,362	$	1,312,752
Net loss	(7,802,709)		(18,034,908)
Net loss per share	(2.08)		(4.81)

PREPAID EXPENSES AND OTHER CURRENT ASSETS

9 Months Ended

Sep. 30, 2019

PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets at September 30, 2019 and December 31, 2018 consisted of the following:


	September 30, 2019		December 31, 2018
Prepaid clinical trial expenses	$	247,460	$	210,333
Prepaid insurance	873,277		16,484

Other prepaid and current assets	118,971		22,269
Total prepaid expenses and other current assets	$	1,239,708	$	249,086

COMMITMENTS AND CONTINGENCIES	9 Months Ended
COMMITMENTS AND CONTINGENCIES	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES License Agreement with the University of Utah Research Foundation In 2011, the Company entered into a license agreement with the University of Utah, under which, the Company acquired license to LSD 1. In exchange for the license, the Company issued 2% equity ownership in the Company based on a fully diluted basis at the effective date of the agreement and subject to certain adjustments specified in the agreement, granted revenue sharing rights on any resulting products or processes to commence on first commercial sale, and milestone payments based upon regulatory approval of any resulting product or process as well as on the second anniversary of first commercial sale. Cancer Prevention and Research Institute of Texas In June 2016, the Company entered into a Cancer Research Grant Contract with CPRIT. Pursuant to the contract, CPRIT awarded the Company a grant up to $18.7 million to fund development of LSD 1 inhibitor. This is a 3-year grant award originally expired on May 31, 2019. A six-month extension was approved by CPRIT in May 2019. The grant now expires on November 30, 2019 with extensions available. The Company will retain ownership over any intellectual property developed under the contract ("Project Result"). With respect to non-commercial use of any Project Result, the Company agreed to grant to CPRIT a nonexclusive, irrevocable, royalty-free, perpetual, worldwide license with right to sublicense any necessary additional intellectual property rights to exploit all Project Results by CPRIT, other governmental entities and agencies of the State of Texas, and private or independent institutions of higher education located in Texas, for education, research and other non-commercial purposes. The Company is obligated to make revenue-sharing payments to CPRIT with respect to net sales of any product covered by the contract, up to a maximum repayment of certain percentage of the aggregate amount paid to the Company by CPRIT under the CPRIT contract. The payments are determined as a percentage of net sales, which may be reduced if the Company is required to obtain a license from a third party to sell any such product. In addition, upon meeting the foregoing limitation on revenue-sharing payments, the Company agreed to make continued revenue-sharing payments to CPRIT of less than 1% of net sales. 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 September 30, 2019, 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. There was no funding received from CPRIT during the nine months ended September 30, 2019. At September 30, 2019 and December 31, 2018, the Company had deferred revenue of $1,580,394 and $4,006,755, respectively, related to CPRIT contract. Lease Agreement The Company presently leases office space under operating lease agreements on a month to month basis.

STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2019

STOCKHOLDERS' EQUITY

Common Stock

In October 2018, 1,366,448 of Private Salarius' Series 1 preferred units were converted into 355,676 common shares (1,530 Series A preferred units).

Right to Warrants

price volatility.

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


	July 19, 2019		September 30, 2019
Discount rate	1.80	%	1.55	%
Expected life (years)	5.50 years		5.31 years
Expected volatility	96.02	%	103.07	%
Expected dividend	—	%	—	%

Wedbush Warrant

EQUITY-BASED COMPENSATION

9 Months Ended

Sep. 30, 2019

EQUITY-BASED COMPENSATION

Private Salarius' Grants

Equity Incentive Plans

The following table summarizes stock option activity for employees and non-employees for the nine months ended September 30, 2019:


	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2018	—	$	—	—	$	—
Granted	101,082	8.00
Options from Flex Pharma	90,279	102.22
Exercised	—	—
Forfeited	—	—
Expired	—	—
Outstanding at September 30, 2019	191,361	$	52.45	5.91	$	—
Exercisable at September 30, 2019	91,059	$	101.41	1.45	$	—

RELATED PARTIES	9 Months Ended
RELATED PARTIES	Sep. 30, 2019
Related Party Transactions [Abstract]
RELATED PARTIES	RELATED PARTIESAs of September 30, 2019 and December 31, 2018, the Company has $4,429 and $5,946 payable to Iterion Therapeutics (formerly BetaCat), respectively, for expenses Iterion paid on behalf of the Company. The Company's Chairman is a director of Iterion Therapeutics.

LOSS PER SHARE

9 Months Ended

Sep. 30, 2019

LOSS PER SHARE


	Three Months Ended September 30, 2019		Three Months Ended September 30, 2018		Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
Numerator:
Loss from continuing operations	$	(2,630,069)	$	(307,450)	$	(5,055,790)	$	(577,766)
Preferred dividends	—		(24,580)		—		(88,015)
Loss from continuing operations attributable to common stock shareholders	$	(2,630,069)	$	(332,030)	$	(5,055,790)	$	(665,781)

Denominator:
Weighted-average common shares outstanding - basic and diluted	3,605,913		1,653,340		3,002,736		1,407,062
Loss per common share - basic and diluted - continuing operations	(0.73)		(0.20)		(1.68)		(0.47)

SUBSEQUENT EVENTS	9 Months Ended
SUBSEQUENT EVENTS	Sep. 30, 2019
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS Common Stock Purchase with Aspire Capital On October 24, 2019, the Company entered into a common stock purchase agreement with Aspire Capital, which provides that the Company may offer to Aspire Capital up to an aggregate of $10.9 million of the Company's common shares over 30 months. Upon execution of the agreement, the Company sold to Aspire Capital 210,526 shares of common stock at $4.75 per share for proceeds of $1.0 million. In consideration for entering into the purchase agreement, the Company issued to Aspire Capital 101,810 common shares. The purchase agreement may be terminated by the Company at any time, at its discretion, without any cost to the Company. Under the purchase agreement, on any trading day when the closing sale price of the Company’s common stock is more than $0.25 per share, the Company has the right, in its sole discretion, to direct Aspire Capital to purchase up to 50,000 shares of the Company’s common stock per business day, up to $500,000 of the Company’s common stock in the aggregate at a per share price equal to the lesser of: •the lowest sale price of the Company’s common stock on the purchase date; or •the arithmetic average of the three lowest closing sale prices for the Company’s common stock during the ten consecutive trading days ending on the trading day immediately preceding the purchase date. The Company and Aspire Capital also may mutually agree to increase the number of shares that may be sold to as much as an additional 2,000,000 shares per business day. In addition, on any date on which the Company submits a notice to Aspire Capital in an amount equal to 50,000 shares, the Company also has the right, in its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of the Company’s common stock traded on its principal market on the next trading day ("VWAP Purchase Date"), subject to a maximum number of shares the Company may determine. The purchase price per share pursuant to such notice is generally 97% of the volume-weighted average price for the Company’s common stock traded on its principal market on the VWAP Purchase Date. Pursuant to the purchase agreement, in no case may the Company issue more than 750,861 shares of the Company’s common stock (which equals approximately 19.99% of the Company’s common shares outstanding on October 24, 2019) to Aspire Capital unless (i) the average price paid for all shares issued under the agreement is at least $4.75 per share or (ii) the Company receives stockholder approval to issue more shares to Aspire Capital. There are no other trading volume requirements or restrictions under the purchase agreement and the Company will control the timing and amount of the Company’s common shares sell to Aspire Capital. Aspire Capital has no right to require any sales by the Company, but is obligated to make purchases from the Company as directed.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2019

Principles of Consolidation

Basis of Presentation

Use of Estimates

Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted CashSalarius considers all highly liquid securities with original final maturities of three months or less from the date of purchase to be cash equivalents.

Property and Equipment

once assets are placed in service, using the straight-line method over the estimated useful lives of the respective assets, which are as follows:


Asset classification						Useful life
Computer equipment						3 years
Laboratory equipment						5 years

Intangibles

Impairment of Long-Lived Assets

Goodwill

Fair Value of Financial Instruments

Level 1-Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 3-Significant unobservable inputs including Salarius’ own assumptions in determining fair value.

Financial Instruments and Credit Risks

Revenue Recognition

Research and Development Costs

Equity-Based Compensation

Earnings (Loss) Per Share

Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period.

For periods of net loss, diluted loss per share is calculated similarly to basic loss per share because the impact of all potential dilutive common shares is antidilutive.

Reclassification

Certain reclassifications have been made to the prior-year financial statements to conform to the current-year presentation.

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

•the Company did not reassess if any expired or existing contracts are or contain leases; and

•the Company did not reassess the classification of any expired or existing leases.

Upon adoption of the new guidance on January 1, 2019, there was no impact on the Company’s financial statements.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2019

Schedule of Property and Equipment Useful Life

Depreciation is recorded,

once assets are placed in service, using the straight-line method over the estimated useful lives of the respective assets, which are as follows:


Asset classification						Useful life
Computer equipment						3 years
Laboratory equipment						5 years

Summary of Changes in Fair Value of Level 3 Liabilities

The following table sets forth a summary of changes in the fair value of Level 3 liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2019:


Description	Balance at December 31, 2018		Established		Change in Fair Value		Balance at September 30, 2019
Warrant liability	$	—	$	1,629,095	$	(1,130,848)	$	498,247

Schedule of Assets and Liabilities Measured at Fair Value

The following table identifies the carrying amounts of such liabilities at September 30, 2019:


	Level 1		Level 2		Level 3		Total
Warrant liability	$	—	$	—	$	498,247	$	498,247
Balance at September 30, 2019	$	—	$	—	$	498,247	$	498,247

REVERSE ACQUISITION AND DISPOSAL (Tables)

9 Months Ended

Sep. 30, 2019

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

Summary of Sale of Business

Details of the transaction are as follows:


Proceeds from sale	$	299,135
Carrying value of tangible assets sold	(135,544)
Carrying value of goodwill and intangible assets sold	(71,990)
Cost incurred related to the sale	(94,861)
Liabilities transferred upon sale	3,260
Total gain on sale of HOTSHOT	$	—

Schedule of Unaudited Pro Forma Results


	Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
Revenues	$	2,426,362	$	1,312,752
Net loss	(7,802,709)		(18,034,908)
Net loss per share	(2.08)		(4.81)

- Definition

+ References

+ Details

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables)

9 Months Ended

Sep. 30, 2019

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

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets at September 30, 2019 and December 31, 2018 consisted of the following:


	September 30, 2019		December 31, 2018
Prepaid clinical trial expenses	$	247,460	$	210,333
Prepaid insurance	873,277		16,484

Other prepaid and current assets	118,971		22,269
Total prepaid expenses and other current assets	$	1,239,708	$	249,086

STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2019

Schedule of Variables used in Black-Scholes Model

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


	July 19, 2019		September 30, 2019
Discount rate	1.80	%	1.55	%
Expected life (years)	5.50 years		5.31 years
Expected volatility	96.02	%	103.07	%
Expected dividend	—	%	—	%

EQUITY-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2019

Summary of Stock Option Activity

The following table summarizes stock option activity for employees and non-employees for the nine months ended September 30, 2019:


	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2018	—	$	—	—	$	—
Granted	101,082	8.00
Options from Flex Pharma	90,279	102.22
Exercised	—	—
Forfeited	—	—
Expired	—	—
Outstanding at September 30, 2019	191,361	$	52.45	5.91	$	—
Exercisable at September 30, 2019	91,059	$	101.41	1.45	$	—

LOSS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2019