UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2023

☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File No. 001-31791

GALECTIN THERAPEUTICS INC.

Nevada	04-3562325
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)

4960 Peachtree Industrial Blvd., Suite 240, Norcross, GA	30071
(Address of Principal Executive Offices)	(Zip Code)

(678) 620 -3186

(Registrant’s Telephone Number, Including Area Code)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	GALT	The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☐

Non-Accelerated Filer	☒	Smaller reporting company	☒

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The number of shares outstanding of the registrant’s common stock as of August 8, 2023 was 59,582,253.

GALECTIN THERAPEUTICS INC.

INDEX TO FORM 10-Q

FOR THE QUARTER ENDED June 30, 2023

	PART I — FINANCIAL INFORMATION	PAGE
ITEM 1.	Unaudited Condensed Consolidated Financial Statements (unaudited)

	Condensed Consolidated Balance Sheets as of June 30, 2023, and December 31, 2022	3

	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2023 and 2022	4

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022	5

	Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2023 and 2022	6

	Notes to Unaudited Condensed Consolidated Financial Statements	9

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	24

ITEM 4.	Controls and Procedures	25

	PART II — OTHER INFORMATION

ITEM 1.	Legal Proceedings	25

ITEM 1A.	Risk Factors	25

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25

ITEM 3.	Defaults Upon Senior Securities	25

ITEM 4.	Mine Safety Disclosures	25

ITEM 5.	Other Information	25

ITEM 6.	Exhibits	25

SIGNATURES		27

Index

GALECTIN THERAPEUTICS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	June 30, 2023			December 31, 2022
	(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	17,966		$	18,592
Prepaid expenses and other current assets		1,502			1,960
Total current assets		19,468			20,552
Other assets		613			733
Total assets	$	20,081		$	21,285
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	1,976		$	3,890
Accrued expenses and other		7,913			9,058
Accrued dividends payable		64			64
Total current liabilities		9,953			13,012
Convertible notes payable and accrued interest, net of discounts – related party (Note 3)		30,433			29,964
Derivative liabilities (Note 4)		852			573
Borrowing and accrued interest under convertible line of credit, net of debt discount – related party (Note 9)		29,926			9,864
Other liabilities		44			66
Total liabilities		71,208			53,479
Commitments and contingencies (Note 10)
Series C super dividend redeemable convertible preferred stock; 1,000 shares authorized, 176 shares issued and outstanding at June 30, 2023 and December 31, 2022, redemption value: $8,282,000, liquidation value: $1,760,000 at June 30, 2023		1,723			1,723
Stockholders’ equity (deficit):
Undesignated stock, $0.01 par value; 20,000,000 shares authorized, 20,000,000 designated at June 30, 2023 and December 31, 2022, respectively		—			—
Series A 12% convertible preferred stock; 1,742,500 shares authorized, 1,260,000 issued and outstanding at June 30, 2023 and December 31, 2022, liquidation value $1,260,000 at June 30, 2023		510			510
Common stock, $0.001 par value; 150,000,000 shares authorized at June 30, 2023 and December 31, 2022, 59,582,253 and 59,426,005 issued and outstanding at June 30, 2023 and December 31, 2022, respectively		59			59
Additional paid-in capital		276,852			275,081
Accumulated deficit		(330,271	)		(309,567	)
Total stockholders’ equity (deficit)		(52,850	)		(33,917	)
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)	$	20,081		$	21,285

See notes to unaudited condensed consolidated financial statements.

Index

GALECTIN THERAPEUTICS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
	(in thousands, except per share data)						(in thousands, except per share data)
Operating expenses:
Research and development	$	7,371		$	8,074		$	16,170		$	16,132
General and administrative		1,632			1,588			3,175			3,465
Total operating expenses		9,003			9,662			19,345			19,597
Total operating loss		(9,003	)		(9,662	)		(19,345	)		(19,597	)
Other income (expense):
Interest income		50			3			93			4
Interest expense		(650	)		(229	)		(1,110	)		(456	)
Change in fair value of derivative		489			275			(279	)		504
Total other income (expense)		(111	)		49			(1,296	)		52
Net loss	$	(9,114	)	$	(9,613	)	$	(20,641	)	$	(19,545	)
Preferred stock dividends		(63	)		(64	)		(63	)		(48	)
Net loss applicable to common stockholders	$	(9,177	)	$	(9,677	)	$	(20,704	)	$	(19,593	)
Net loss per common share — basic and diluted	$	(0.15	)	$	(0.16	)	$	(0.35	)	$	(0.33	)
Weighted average common shares outstanding — basic and diluted		59,582			59,389			59,531			59,372

See notes to unaudited condensed consolidated financial statements.

Index

GALECTIN THERAPEUTICS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Six Months Ended June 30,
	2023			2022
	(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(20,641	)	$	(19,545	)
Adjustments to reconcile net loss to net cash flows from operating activities:
Stock-based compensation expense		1,178			1,505
Amortization of right to use lease asset		16			17
Non-cash interest expense		313			158
Change in fair value of derivative liabilities		279			(504	)
Changes in operating assets and liabilities:
Prepaid expenses and other assets		458			454
Accounts payable, accrued expenses and other liabilities		(3,027	)		2,147
Accrued interest on convertible debt - related party		798			298
Net cash from operating activities		(20,626	)		(15,470	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from convertible line of credit – related party		20,000			—
Net cash flows from financing activities		20,000			—
NET DECREASE IN CASH AND CASH EQUIVALENTS		(626	)		(15,470	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		18,592			39,648
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	17,966		$	24,178
NONCASH FINANCING ACTIVITIES:
Payment of preferred stock dividends in common stock	$	62		$	49
Reclassification of accrued bonus to additional paid in capital		210			200
Common stock purchase warrants issued in connection with related party line of credit		477			—
Noncash right to use lease asset		—			111

See notes to unaudited condensed consolidated financial statements.

Index

GALECTIN THERAPEUTICS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (UNAUDITED)

(amounts in thousands except share data)

	Series C Super Dividend Redeemable Convertible Preferred Stock
	Number of Shares		Amount
Balance at December 31, 2021		176	$	1,723
Balance at June 30, 2022		176	$	1,723
Balance at December 31, 2022		176	$	1,723
Balance at June 30, 2023		176	$	1,723

See notes to unaudited condensed consolidated financial statements.

Index

GALECTIN THERAPEUTICS INC.

CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) — (Continued)

For the Three Months Ended June 30, 2023 and 2022

(amounts in thousands except share data)

	Series A 12% Convertible Preferred Stock						Common Stock
	Number of Shares			Amount			Number of Shares		Amount		Additional Paid-In Capital		Retained Deficit			Total Stockholders’ Equity (Deficit)
Balance at March 31, 2022		1,302,500		$	527			59,388,518	$	59	$	272,108	$	(280,610	)	$	(7,916	)
Series A 12% convertible preferred stock dividend														(38	)		(38	)
Series C super dividend redeemable convertible preferred stock dividend														(26	)		(26	)
Issuance of common stock from conversion of Series A convertible preferred stock		(42,500	)		(17	)		7,289				17
Stock-based compensation expense												647					647
Net loss														(9,613	)		(9,613	)
Balance at June 30, 2022		1,260,000		$	510			59,395,805	$	59	$	272,772	$	(290,287	)	$	(16,946	)
Balance at March 31, 2023		1,260,000		$	510			59,582,253	$	59	$	276,156	$	(321,094	)	$	(44,369	)
Series A 12% convertible preferred stock dividend														(37	)		(37	)
Series C super dividend redeemable convertible preferred stock dividend														(26	)		(26	)
Common stock purchase warrants issued in connection with related party line of credit												180					180
Stock-based compensation expense												516					516
Net loss														(9,114	)		(9,114	)
Balance at June 30, 2023		1,260,000		$	510			59,582,253	$	59	$	276,852	$	(330,271	)	$	(52,850	)

Index

GALECTIN THERAPEUTICS INC.

CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) — (Continued)

For the Six Months Ended June 30, 2023 and 2022

(amounts in thousands except share data)

	Series A 12% Convertible Preferred Stock						Common Stock
	Number of Shares			Amount			Number of Shares		Amount		Additional Paid-In Capital		Retained Deficit			Total Stockholders’ Equity (Deficit)
Balance at December 31, 2021		1,302,500		$	527			59,341,305	$	59	$	271,001	$	(270,694	)	$	893
Series A 12% convertible preferred stock dividend								13,025				20		(20	)
Series C super dividend redeemable convertible preferred stock dividend								17,600				29		(28	)		1
Issuance of common stock from conversion of Series A convertible preferred stock		(42,500	)		(17	)		7,287				17
Stock-based compensation expense								16,588				1,705					1,705
Net loss														(19,545	)		(19,545	)
Balance at June 30, 2022		1,260,000		$	510			59,395,805	$	59	$	272,772	$	(290,287	)	$	(16,946	)
Balance at December 31, 2022		1,260,000		$	510			59,426,005	$	59	$	275,081	$	(309,567	)	$	(33,917	)
Series A 12% convertible preferred stock dividend								12,600				26		(26	)
Series C super dividend redeemable convertible preferred stock dividend								17,600				36		(37	)		(1	)
Common stock purchase warrants issued in connection with related party line of credit

SEC Form 10-Q filed by Galectin Therapeutics Inc.