Item 2.01 Completion of Acquisition or Disposition of Assets.
On July 19, 2019, Salarius Pharmaceuticals, Inc., formerly known as Flex Pharma, Inc. (the “Registrant”), completed its business combination with Salarius Pharmaceuticals, LLC (“Private Salarius”) in accordance with the terms of the Agreement and Plan of Merger (as amended, the “Merger Agreement”), dated as of January 3, 2019 and amended on June 27, 2019, by and among the Registrant, Falcon Acquisition Sub, LLC (“Merger Sub”), and Private Salarius, pursuant to which Merger Sub merged with and into Private Salarius, with Private Salarius surviving as a wholly owned subsidiary of the Registrant (the “Merger”). Matters relating to this transaction were approved by the Registrant’s stockholders at a special meeting of its stockholders on July 12, 2019 (the “Special Meeting”).
On July 19, 2019, in connection with, and prior to the completion of, the Merger, the Registrant effected a1-for-25 reverse stock split of its then outstanding common stock (the “Reverse Split”) and the Registrant changed its name to “Salarius Pharmaceuticals, Inc.” (the “Name Change”), pursuant to an amendment to its certificate of incorporation filed with the Secretary of State of the State of Delaware on July 18, 2019, which became effective on July 19, 2019. Immediately prior to the Reverse Split, stockholders of the Registrant as of the close of business on July 18, 2019, received one right per share of common stock they held, which right will entitle them to receive a warrant to purchase common stock six months and one day following the closing date of the Merger.
Following the completion of the Merger, the business conducted by the Registrant became primarily the business conducted by Private Salarius, which is a clinical-stage oncology company targeting the epigenetic causes of cancers and is developing treatments for patients that need them the most.
Under the terms of the Merger Agreement, the Registrant issued shares of its common stock to Private Salarius’ common unit, profits interest common unit and Series A unit holders, at the conversion ratio formulae described in the Merger Agreement, in exchange for each Private Salarius common unit, profits interest common unit and Series A unit outstanding immediately prior to the Merger.
The aggregate consideration issuable to unit holders of Private Salarius in connection with the closing of the Merger, after giving effect to the Reverse Split, was 3,045,960 shares of the Registrant’s common stock. Immediately after the Merger, there were approximately 3,747,246 shares of the Registrant’s common stock outstanding. In accordance with the terms of the Merger, Agreement, immediately following the closing of the Merger, former Private Salarius unit holders owned approximately 80.1% of the combined company, and the Registrant’s stockholders immediately prior to the Merger, whose shares of the Registrant’s common stock remain outstanding after the Merger, owned approximately 19.9% of the combined company, in each case on a partially-diluted basis, excluding the effect of certain options, the dividend or distribution of rights and warrants to stockholders of Flex Pharma, Inc. described above and the issuance of a warrant to Wedbush Securities Inc. (“Wedbush”).
The issuance of the shares of the Registrant’s common stock to the former stockholders of Private Salarius was registered with the U.S. Securities and Exchange Commission (the “SEC”) on a Registration Statement on FormS-4 (Reg.No. 333-229666), which was declared effective by the SEC on April 29, 2019 (the “Registration Statement”).
The Registrant’s common stock continued to trade on apre-split basis through the close of business on Friday, July 19, 2019 on the Nasdaq Capital Market under the ticker symbol “FLKS.” Commencing with the open of trading on Monday, July 22, 2019, the post-split shares began trading on the Nasdaq Capital Market under the ticker symbol “SLRX.” The Registrant’s common stock has a new CUSIP number of 79400X107.
The descriptions of the Merger and Merger Agreement included herein are not complete and are subject to and qualified in their entirety by reference to the Merger Agreement, a copy of which was filed as Exhibit 2.1 to the Registrant’s Current Report on Form8-K filed with the SEC on January 4, 2019, Amendment No. 1 to the Merger Agreement, a copy of which was filed as Exhibit 2.1 to the Registrant’s Current Report onForm 8-K filed with the SEC on July 1, 2019, and Waiver No. 1 to the Merger Agreement, a copy of which is attached hereto as Exhibit 2.3, each of which are incorporated herein by reference. The representations, warranties and covenants contained in such documents were made only for purposes of such documents and as of specific dates, were solely for the benefit of the parties to such documents, and are subject to limitations agreed upon by the parties to such documents. Moreover, the representations and warranties contained in such documents were made for the purpose of allocating contractual risk between the parties to such documents instead of establishing matters as facts, and may be subject to standards of materiality applicable to the parties to such documents that differ from those applicable to investors generally. Investors (other than the parties to such documents) are not third-party beneficiaries under such documents and should not rely on the representations, warranties and covenants contained therein or any descriptions thereof as characterizations of the actual state of facts or condition of the Registrant, Private Salarius or any of their respective subsidiaries or affiliates.
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