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, 2024
 
☐
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 9, 2024 was 62,278,125.
 
GALECTIN THERAPEUTICS INC.
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2024

  PART I — FINANCIAL INFORMATION PAGE
ITEM 1.
Unaudited Condensed Consolidated Financial Statements (unaudited)
 
     
 
3
     
 
4
     
 
5
     
 
 6
 


 
8
     
ITEM 2.
17
     
ITEM 3.
24
     
ITEM 4.
25
     
  PART II — OTHER INFORMATION  
     
ITEM 1.
25
     
ITEM 1A.
25
     
ITEM 2.
25
     
ITEM 3.
25
     
ITEM 4.
25
     
ITEM 5.
25
     
ITEM 6.
25
     
27

GALECTIN THERAPEUTICS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 
  
June 30,
2024
    
December 31,
2023
  
 
  
(in thousands)
  
ASSETS
            
Current assets:
            
Cash and cash equivalents
  
$
25,598
    
$
25,660
  
Prepaid expenses and other current assets
    
1,689
      
2,050
  
Total current assets
    
27,287
      
27,710
  
Other assets
    
368
      
490
  
Total assets
  
$
27,655
    
$
28,200
  
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
                
Current liabilities:
                
Accounts payable
  
$
3,698
    
$
6,431
  
Accrued expenses and other
    
10,856
      
9,182
  
Accrued dividends payable
    
63
      
63
  
Total current liabilities
    
14,617
      
15,676
  
Convertible notes payable and accrued interest, net of discounts – related party (Note 3)
   
31,375
      
30,902
  
Derivative liabilities (Note 4)    
1,764
      
1,004
  
Borrowing and accrued interest under convertible line of credit, net of debt discount – related party (Notes 9 and 10)
     62,046       40,839  
Other liabilities
    
—
      
20
  
Total liabilities
    
109,802
      
88,441
  
Commitments and contingencies (Note 11)
            
Series C super dividend redeemable convertible preferred stock; 1,000 shares authorized, 176 shares issued and outstanding at June 30, 2024 and December 31, 2023, redemption value: $8,124,000, liquidation value: $1,760,000 at June 30, 2024
    
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, 2024 and December 31, 2023 respectively
   
—
      
—
  
Series A 12% convertible preferred stock; 1,742,500 shares authorized, 1,235,000 issued and outstanding at June 30, 2024 and December 31, 2023, liquidation value $1,235,000 at June 30, 2024
    
500
      
500
  
Common stock, $0.001 par value; 150,000,000 shares authorized at June 30, 2024 and December 31, 2023, 62,278,125 and 61,852,914 issued and outstanding at June 30, 2024 and December 31, 2023, respectively
    
62
      
61
  
Additional paid-in capital
    
293,872
      
291,847
  
Retained deficit
    
(378,304
)
    
(354,372
)
Total stockholders’ equity (deficit)
    
(83,870
)
    
(61,964
)
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)
  
$
27,655
    
$
28,200
  

See notes to unaudited condensed consolidated financial statements.

3
GALECTIN THERAPEUTICS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 
 
  
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
 
  
2024
    
2023
    
2024
    
2023
  
 
  
(in thousands, except per share
data)
    
(in thousands, except per share
data)
  
Operating expenses:
                        
Research and development
  
$
9,813
    
$
7,371
    
$
17,867
    
$
16,170
  
General and administrative
    
1,478
      
1,632
      
3,072
      
3,175
  
Total operating expenses
    
11,291
      
9,003
      
20,939
      
19,345
  
Total operating loss
    
(11,291
)
    
(9,003
)
    
(20,939
)
    
(19,345
)
Other income (expense):
                                
Interest income
    
80
      
50
      
160
      
93
  
Interest expense
    
(1,269
)
    
(650
)
    
(2,321
)
    
(1,110
)
Change in fair value of derivative
    
109
      
489
      
(760
)
    
(279
)
Total other income (expense)
    
(1,080
)
    
(111
)
    
(2,921
)
    
(1,296
)
Net loss
  
$
(12,371
)
  
$
(9,114
)
  
$
(23,860
)
  
$
(20,641
)
Preferred stock dividends
    
(64
)
    
(63
)
    
(72
)
    
(63
)
Net loss applicable to common stockholders
  
$
(12,435
)
  
$
(9,177
)
  
$
(23,932
)
  
$
(20,704
)
Net loss per common share — basic and diluted
  
$
(0.20
)
  
$
(0.15
)
  
$
(0.39
)
  
$
(0.35
)
Weighted average common shares outstanding — basic and diluted
    
62,233
      
59,582
      
62,104
      
59,531
  

See notes to unaudited condensed consolidated financial statements.

4
GALECTIN THERAPEUTICS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
 
  
Six Months Ended
June 30,
  
 
  
2024
    
2023
  
 
  
(in thousands)
  
CASH FLOWS FROM OPERATING ACTIVITIES:
            
Net loss
  
$
(23,860
)
  
$
(20,641
)
Adjustments to reconcile net loss to net cash flows from operating activities:
                
Stock-based compensation expense
    
1,342
      
1,178
  
Amortization of right to use lease asset
    
18
      
16
  
Non-cash interest expense
    
457
      
313
  
Change in fair value of derivative liabilities
    
760
      
279
  
Changes in operating assets and liabilities:
                
Prepaid expenses and other assets
    
361
      
458
  
Accounts payable, accrued expenses and other liabilities
    
(1,380
)
    
(3,027
)
Accrued interest on convertible debt - related party
     1,864       798  
Net cash from operating activities
    
(20,438
)
    
(20,626
)
CASH FLOWS FROM FINANCING ACTIVITIES:
                
Net proceeds from convertible line of credit – related party
     20,000       20,000  
Net proceeds from exercise of common stock warrants
    376
          
Net cash flows from financing activities
    
20,376
      
20,000
  
NET DECREASE IN CASH AND CASH EQUIVALENTS
    
(62
)
    
(626
)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
25,660
      
18,592
  
CASH AND CASH EQUIVALENTS, END OF PERIOD
  
$
25,598
    
$
17,966
  
NONCASH FINANCING ACTIVITIES:
                
Payment of preferred stock dividends in common stock
   $ 72     $ 62  
Reclassification of accrued bonus to additional paid in capital
    
—
      
210
  
Common stock purchase warrants issued in connection with related party line of credit
     537       477  

See notes to unaudited condensed consolidated financial statements.
 
5
GALECTIN THERAPEUTICS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND
STOCKHOLDERS’ EQUITY (DEFICIT)  (UNAUDITED)
(amounts in thousands except share data)
 
 
  
Series C Super
Dividend Redeemable
Convertible
Preferred Stock
  
 
  
Number of
Shares
    
Amount
  
Balance at December 31, 2022
    
176
    
$
1,723
  
Balance at June 30, 2023
    
176
    
$
1,723
  
Balance at December 31, 2023
    
176
    
$
1,723
  
Balance at June 30, 2024
    
176
    
$
1,723
  

 
  
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, 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
)
Balance at March 31, 2024
    
1,235,000
    
$
500
      
62,148,134
    
$
61
    
$
292,499
    
$
(365,869
)
  
$
(72,809
)
Series A 12% convertible preferred stock dividend
                                            
(38
)
    
(38
)
Series C super dividend redeemable convertible preferred
stock dividend
                                            
(26
)
    
(26
)
Common stock purchase warrants issued in connection
with related party line of credit
                                    260
               260
  
Exercise of common stock options
                    4,898                                  
Exercise of common stock purchase warrants                     125,093
       1
       375               376  
Stock-based compensation expense
                                    
738
              
738
  
Net loss
                                            
(12,371
)
    
(12,371
)
Balance at June 30, 2024
    
1,235,000
    
$
500
      
62,278,125
    
$
62
    
$
293,872
    
$
(378,304
)
  
$
(83,870
)
 
See notes to unaudited condensed consolidated financial statements.

6
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 2024
(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, 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
                                     477
               477
  
Stock-based compensation expense
                    
126,048
              
1,232
              
1,232
  
Net loss
                                            
(20,641
)
    
(20,641
)
Balance at June 30, 2023
    
1,260,000
    
$
510
      
59,582,253
    
$
59
    
$
276,852
    
$
(330,271
)
  
$
(52,850
)
Balance at December 31, 2023
    
1,235,000
    
$
500
      
61,852,914
    
$
61
    
$
291,847
    
$
(354,372
)
  
$
(61,964
)
Series A 12% convertible preferred stock dividend
                    
12,350
              
30
      
(30
)
        
Series C super dividend redeemable convertible preferred stock dividend
                    
17,600
              
42
      
(42
)
        
Exercise of common stock options
                     19,620
                                  
Exercise of common stock purchase warrants
                     125,093
       1
       375
               376
  
Common stock purchase warrants issued in connection with related party line of credit
                                     537               537  
Stock-based compensation expense, net of shares forfeited to cover tax withholding
                    
250,548
              
1,041
              
1,041
  
Net loss
                                            
(23,860
)
    
(23,860
)
Balance at June 30, 2024
    
1,235,000
    
$
500
      
62,278,125
    
$
62
    
$
293,872
    
$
(378,304
)
  
$
(83,870
)

See notes to consolidated financial statements.
 
7
GALECTIN THERAPEUTICS INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation, Liquidity and Going Concern



Galectin Therapeutics Inc. and subsidiaries (the “Company”) is a clinical stage biopharmaceutical company that is applying its leadership in galectin science and drug development to create new therapies for fibrotic disease and cancer. These candidates are based on the Company’s targeting of galectin proteins which are key mediators of biologic and pathologic function. These compounds also may have application for drugs to treat other diseases and chronic health conditions.



The unaudited condensed consolidated financial statements as reported in this Quarterly Report on Form 10-Q reflect all adjustments which are, in the opinion of management, necessary to present fairly the financial position of the Company as of June 30, 2024 and the results of its operations for the three and six months ended June 30, 2024 and 2023 and its cash flows for the six months ended June 30, 2024 and 2023. All adjustments made to the interim financial statements include all those of a normal and recurring nature. Amounts presented in the condensed consolidated balance sheet as of December 31, 2023 are derived from the Company’s audited consolidated financial statements as of that date, but do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date these financial statements are available to be issued. The results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. The unaudited condensed consolidated financial statements of the Company should be read in conjunction with its Annual Report on Form 10-K for the year ended December 31, 2023.



The Company has operated at a loss since its inception and has had no revenues. The Company anticipates that losses will continue for the foreseeable future. At June 30, 2024, the company had $25,598,000 of unrestricted cash and cash equivalents available to fund future operations. In July 2022, the Company entered into a $60 million unsecured line of credit financing, which has been fully drawn at June 30, 2024, with its chairman, Richard E. Uihlein (See Note 9). Additionally, on March 29, 2024, the Company entered into a supplemental unsecured $10 million line of credit financing also provided by our chairman (See Note 10). The Company believes there is sufficient cash, including availability of the line of credit, to fund currently planned operations approximately through May 15, 2025. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of 12 months from the issuance date of these financial statements. The ability of the Company to continue as a going concern is likely dependent on the results of the Interim Analysis of the Company’s NAVIGATE clinical trial expected in December 2024 and its ability to raise capital; however, the Company’s cash position may not be sufficient to support its daily operations in May 2025. To meet its future capital needs, the Company intends to raise additional capital through debt or equity financings, collaborations, partnerships or other strategic transactions. However, there can be no assurance that the Company will be able to complete any such transactions on acceptable terms or otherwise. The inability of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company’s business, results of operations and financial condition. The Company has the ability to delay certain research activities and related clinical expenses if necessary due to liquidity concerns until a date when those concerns are relieved.



The Company was founded in July 2000, was incorporated in the State of Nevada in January 2001 under the name “Pro-Pharmaceuticals, Inc.,” and changed its name to “Galectin Therapeutics Inc.” on May 26, 2011.

2. Accrued Expenses and Other


Accrued expenses consist of the following:
 
 
  
June 30,
2024
    
December 31,
 2023
  
 
  
(in thousands)
  
Legal and accounting fees
  
$
65
    
$
40
  
Accrued compensation
    
865
      
1,129
  
Lease liability
    
44
      
46
  
Accrued research and development costs and other
    
9,882
      
7,967
  
Total
  
$
10,856
    
$
9,182
  



Research and development expenses, including personnel costs, allocated facility costs, lab supplies, outside services, contract laboratory costs related to manufacturing drug product, clinical trials and preclinical studies are charged to research and development expense as incurred. The Company accounts for nonrefundable advance payments for goods and services that will be used in future research and development activities as expense when the service has been performed or when the goods have been received. Our current NAVIGATE clinical trial is being supported by third-party contract research organizations, or CROs, and other vendors. We accrue expenses for clinical trial activities performed by CROs based upon the estimated amount of work completed on each trial. For clinical trial expenses and related expenses associated with the conduct of clinical trials, the significant factors used in estimating accruals include the number of patients enrolled, the number of active clinical sites, and the duration for which the patients have been enrolled in the trial. We monitor patient enrollment levels and related activities to the extent possible through internal reviews, review of contractual terms and correspondence with CROs. We base our estimates on the best information available at the time. We monitor patient enrollment levels and related activities to the extent possible through discussions with CRO personnel and based our estimates of clinical trial costs on the best information available at the time. However, additional information may become available to us which will allow us to make a more accurate estimate in future periods. In that event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain.

8

3. Convertible Notes Payable – Related Party


On April 16, 2021, the Company and Richard E. Uihlein entered into a debt financing arrangement whereby Mr. Uihlein loaned $10,000,000 to the Company. In consideration for the loan, the Company issued a convertible promissory note (the “April 2021 Note”) in the principal amount of ten million dollars.


The April 2021 Note has a maturity date of April 16, 2025, is prepayable at the option of the Company in whole or in part at any time and is convertible into the Company’s common stock at a conversion price equal to $5.00 per share at the option of the noteholder. The April 2021 Note bears interest at the rate of two percent (2%) per annum, compounded annually with an effective interest rate of approximately 3%. For the three months ended June 30, 2024 and 2023, approximately $53,000 and $52,000, respectively, of interest expense was accrued and included with the principal in the financial statements. For the six months ended June 30, 2024 and 2023, approximately $104,000 and $102,000, respectively, of interest expense was accrued and included with the principal in the financial statements.


The April 2021 Note also includes a contingent interest component that requires the Company to pay additional interest at a rate of two and one-half percent (2.5%) per quarter (10% per annum) (the “Additional Interest”) beginning on the date of issuance of this Note and ending on the maturity date, provided however, that such payment is only required if and only if the noteholder elects to convert the entire balance of the April 2021 Note into the Company’s common stock on or prior to maturity. As the contingent event is not based on creditworthiness, such feature is not clearly and closely related to the host instrument and accordingly must be bifurcated and recognized as a derivative liability and a debt discount on the April 2021 Note at its inception. The fair value of the contingent interest derivative liability was $420,000 at note inception (April 16, 2021). The fair value of the contingent interest derivative liability was $789,000 and $366,000 at June 30, 2024 and December 31, 2023, respectively, and is recognized as a derivative liability in the consolidated balance sheet. The change in the fair value of the derivative liability for the three months ended June 30, 2024 and 2023 of $(89,000) and $(221,000), respectively, was charged to other expense/(income) for the three months ended June 30, 2024 and 2023. The change in the fair value of the derivative liability for the six months ended June 30, 2024 and 2023 of $358,000 and $117,000, respectively, was charged to other expense/(income) for the six months ended June 30, 2023 and 2022. The amortization of the original $420,000 debt discount of $26,000 and $26,000 was recorded as additional interest expense for the three months ended June 30, 2024 and 2023, respectively. The amortization of the original $420,000 debt discount of $52,000 and $52,000 was recorded as additional interest expense for the six months ended June 30, 2024 and 2023, respectively.


On May 14, 2024, Mr. Uihlein, as holder of the April 2021 Note irrevocably elected to convert the entire principal amount of such note, plus accrued and unpaid interest, into shares of common stock of the Company at a price of $5.00 per share, effective as of April 16, 2025, which is the maturity date of the April 2021 Note.  The April 2021 Note will remain outstanding and accrue interest until maturity and no shares of common stock will be issued as a result of this election until April 16, 2025.

The September 2021 Note has a maturity date of September 17, 2025, is prepayable at the option of the Company in whole or in part at any time and is convertible into the Company’s common stock at a conversion price equal to $8.64 per share at the option of the noteholder. The September 2021 Note bears interest at the rate of two percent (2%) per annum, compounded annually with an effective interest rate of approximately 3%. For the three months ended June 30, 2024 and 2023, approximately $52,000 and $51,000, respectively, of interest expense was accrued and included with the principal in the financial statements. For the six months ended June 30, 2024 and 2023, approximately $104,000 and $101,000, respectively, of interest expense was accrued and included with the principal in the financial statements.


The September 2021 Note also includes a contingent interest component that requires the Company to pay additional interest at a rate of two and one-half percent (2.5%) per quarter (10% per annum) (the “Additional Interest”) beginning on the date of issuance of this Note and ending on the maturity date, provided however, that such payment is only required if and only if the noteholder elects to convert the entire balance of the September 2021 Note into the Company’s common stock on or prior to maturity. As the contingent event is not based on creditworthiness, such feature is not clearly and closely related to the host instrument and accordingly must be bifurcated and recognized as a derivative liability and a debt discount on the September Note at its inception. The fair value of the contingent interest derivative liability was $433,000 at note inception (September 17, 2021). The fair value of the contingent interest derivative liability was $309,000 and $169,000 and June 30, 2024 and December 31, 2023, respectively, and is recognized as a derivative liability in the consolidated balance sheet. The change in the fair value of the derivative liability for three months ended June 30, 2024 and 2023 of $2,000 and ($116,000), respectively, was recorded to other expense/(income) for three months ended June 30, 2024 and 2023. The change in the fair value of the derivative liability for six months ended June 30, 2024 and 2023 of $140,000 and $50,000, respectively, was recorded to other expense/(income) for six months ended June 30, 2024 and 2023. The amortization of the original $433,000 debt discount of $27,000 and $27,000 was recorded as additional interest expense for the three months ended June 30, 2024 and 2023. The amortization of the original $433,000 debt discount of $54,000 and $54,000 was recorded as additional interest expense for the six months ended June 30, 2024 and 2023.

9

On December 20, 2021, the second of the two promissory notes under the Loan Agreement was executed and delivered, (the “December 2021 Note”) to evidence the second loan in the principal amount of $10,000,000. The December 2021 Note has a maturity date of December 20, 2025, is prepayable at the option of the Company in whole or in part at any time and is convertible into the Company’s common stock at a conversion price equal to $5.43 per share at the option of the noteholder. The December Note bears interest at the rate of two percent (2%) per annum, compounded annually with an effective interest rate of approximately 3%. For three months ended June 30, 2024 and 2023, approximately $52,000 and $51,000, respectively, of interest expense was accrued and included with the principal in the financial statements. For six months ended June 30, 2024 and 2023, approximately $104,000 and $101,000, respectively, of interest expense was accrued and included with the principal in the financial statements.


The December 2021 Note also includes a contingent interest component that requires the Company to pay additional interest at a rate of two and one-half percent (2.5%) per quarter (10% per annum) (the “Additional Interest”) beginning on the date of issuance of this Note and ending on the maturity date, provided however, that such payment is only required if and only if the noteholder elects to convert the entire balance of the December 2021 Note into the Company’s common stock on or prior to maturity. As the contingent event is not based on creditworthiness, such feature is not clearly and closely related to the host instrument and accordingly must be bifurcated and recognized as a derivative liability and a debt discount on the December Note at its inception. The fair value of the contingent interest derivative liability was $415,000 at note inception (December 20, 2021). The fair value of the contingent interest derivative liability was $666,000 and $404,000 at June 30, 2024 and December 31, 2023, respectively, and is recognized as a derivative liability in the consolidated balance sheet. The change in the fair value of the derivative liability for three months ended June 30, 2024 and 2023 of $(21,000) and ($152,000), respectively was recorded to other expense/(income) for three months ended June 30, 2024 and 2023. The change in the fair value of the derivative liability for six months ended June 30, 2024 and 2023 of  $262,000 and $112,000, respectively was recorded to other expense/(income) for six months ended June 30, 2024 and 2023. The amortization of the original $415,000 debt discount of $26,000 and $26,000 was recorded as additional interest expense for three months ended June 30, 2024 and 2023, respectively. The amortization of the original $415,000 debt discount of $52,000 and $52,000 was recorded as additional interest expense for six months ended June 30, 2024 and 2023, respectively.



The Company’s contractual cash obligations related to the outstanding convertible notes payable is a repayment of the September 2021 Note of the $10,000,000 plus accrued interest on September 17, 2025 and a repayment of the December 2021 Note of the $10,000,000 plus accrued interest on December 30, 2025, unless converted at the option of the noteholder.
 
4. Fair Value of Financial Instruments


The Company has certain financial assets and liabilities recorded at fair value. Fair values determined by Level 1 inputs utilize observable data such as quoted prices in active markets. Fair values determined by Level 2 inputs utilize data points other than quoted prices in active markets that are observable either directly or indirectly. Fair values determined by Level 3 inputs utilize unobservable data points in which there is little or no market data, which require the reporting entity to develop its own assumptions. The carrying amounts reflected in the consolidated balance sheets for cash equivalents, accounts payable and accrued expenses approximate their carrying value due to their short-term nature. There were no level 1 or 2 assets or liabilities at June 30, 2024 or December 31, 2023. See below for Fair Value of Derivatives related to Convertible Notes Payable at June 30, 2024 and December 31, 2023, which are level 3 liabilities.


Level 3 assets and liabilities measured and recorded at fair value on a recurring basis at June 30, 2024 and December 31, 2023 were as follows:

 
June 30,
2024
    
December 31,
2023
  
Derivative Liability – Contingent Interest April Note
 
$
789,000
    
$
431,000
  
Derivative Liability – Contingent Interest September Note   $ 309,000     $ 169,000  
Derivative Liability – Contingent Interest December Note   $ 666,000     $ 404,000  


The April Note derivative liability – contingent interest was valued using a Monte Carlo Geometric Brownian Stock Path Model. The key assumptions used in the model at June 30, 2024 and December 31, 2023 are as follows:
 

 
June 30,
2024
    
December 31,
2023
  
Stock Price
  
$
2.26
    
$
1.66
  
Conversion Price of conversion feature
  
$
5.00
    
$
5.00
  
Term
  
   0.79 years
   
1.29 years
  
Risk Free Interest Rate
    
5.23
%
    
4.79
%
Credit Adjusted Discount Rate
    
13.76
%
    
12.86
%
Volatility
    
70
%
    
69
%
Dividend Rate
    
0
 %
 		   
0
 %



The roll forward of the April Note derivative liability – contingent interest is as follows for the six months ended June 30, 2024 and 2023:

Balance – December 31, 2023
  
$
431,000
  
Fair Value Adjustment
    
358,000
  
Balance – June 30, 2024
  
$
789,000
  
         
Balance – December 31, 2022
 		  $
249,000  
Fair Value Adjustment     117,000
Balance – June 30, 2023
   $ 366,000  

10

The September Note derivative liability – contingent interest was valued using a Monte Carlo Geometric Brownian Stock Path Model. The key assumptions used in the model at June 30, 2024 and December 31, 2023 are as follows:


 
June 30,
2024
    
December 31,
2023
  
Stock Price
  
$
2.26
    
$
1.66
  
Conversion Price of conversion feature
  
$
8.64
    
$
8.64
  
Term
  
1.22 years
   
1.72 years
  
Risk Free Interest Rate
    
5.12
%
    
4.23
%
Credit Adjusted Discount Rate
    
13.76
%
    
12.86
%
Volatility
    
84
%
    
75
%
Dividend Rate
    
0
 %    
0
 %


The roll forward of the September Note derivative liability – contingent interest is as follows:

Balance – December 31, 2023
   $ 169,000  
Fair Value Adjustment
     140,000  
Balance – June 30, 2024
   $ 309,000  
         
Balance – December 31, 2022
     109,000  
Fair Value Adjustment     50,000
Balance – June 30, 2023   $ 159,000  


The December Note derivative liability – contingent interest was valued using a Monte Carlo Geometric Brownian Stock Path Model. The key assumptions used in the model at June 30, 2024 and December 31, 2023 are as follows:

   
June 30,
2024
    
December 31,
2023
  
Stock Price
  
$
2.26
    
$
1.66
  
Conversion Price of conversion feature
  
$
5.43
    
$
5.43
  
Term
   1.47 years
    
1.97 years
  
Risk Free Interest Rate
    
4.77
%
    
4.23
%
Credit Adjusted Discount Rate
    
13.76
%
    
12.86
%
Volatility
    
71
%
    
72
%
Dividend Rate
    
0
 %    
0
 %


The roll forward of the December Note derivative liability – contingent interest is as follows:

Balance – December 31, 2023
  
$
404,000
  
Fair Value Adjustment
    
262,000
  
Balance – June 30, 2024
  
$
666,000
  
         
Balance – December 31, 2022
   $ 215,000  
Fair Value Adjustment
    
112,000
Balance – June 30, 2023
  
$
327,000
  

5. Stock-Based Compensation



Following is the stock-based compensation expense related to common stock options, restricted common stock, common stock warrants and deferred stock units:
 
 
  
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
 
  
2024
    
2023
    
2024
    
2023
  
 
  
in thousands
  
Research and development
  
$
386
    
$
134
    
$
709
    
$
403
  
General and administrative
    
351
      
382
      
633
      
775
  
Total stock-based compensation expense
  
$
737
    
$
516
    
$
1,342
    
$
1,178
  


11

The following table summarizes the stock option activity in the Company’s equity incentive plans, including non-plan grants to Company executives, from December 31, 2023 through June 30, 2024:
 
 
  
Shares
    
Weighted
Average
Exercise Price
  
Outstanding, December 31, 2023
    
6,333,841
    
$
2.66
  
Granted
    
1,273,000
      
1.81
  
Exercised
     (49,583 )    
(1.22
)
Options forfeited/cancelled
    
(229,583
)
    
(8.53
)
Outstanding, June 30, 2024
    
7,369,758
    
$
2.33
  



As of June 30, 2024, there was $1,568,000 of unrecognized compensation related to 2,574,753 unvested options, which is expected to be recognized over a weighted–average period of approximately 1 year. The weighted-average grant date fair value for options granted during the six months ended June 30, 2024 was $1.23. The Company granted 1,273,000 stock options during the six months ended June 30, 2024.



The fair value of all other options granted is determined using the Black-Scholes option-pricing model. The following weighted average assumptions were used:
 
 
  
Six
Months Ended
  June 30,
    
Six
Months Ended
  June 30,
  
 
  
2024
    
2023
  
Risk-free interest rate
    
3.88
%
    
3.76
%
Expected life of the options
  
5.4 years
    
5.5 years
 
Expected volatility of the underlying stock
    
75
%
    
86
%
Expected dividend rate
    
0
 %    
0
 %


In January 2024, the Company’s board chairman elected to take restricted stock grants in lieu of cash retainers for 2024. A total of 23,256 shares of restricted stock valued at approximately $40,000 is being amortized to expense on a straight-line basis until December 31, 2024 when the stock vests in full. In January 2023, the Company’s board chairman elected to take restricted stock grants in lieu of cash retainers for 2023. A total of 36,036 shares of restricted stock valued at approximately $40,000 was being amortized to expense on a straight-line basis until December 31, 2023 when the stock vested in full.



During the six months ended June 30, 2024, the Company issued 408,000 restricted stock units to its employees valued at $734,000 at the date of grant. These restricted stock units will vest 100% if the Company publicly presents the results of the Interim Analysis of its NAVIGATE clinical trial on or before December 31, 2024. The Company believes that is probable that the vesting condition will be met and is amortizing the restricted stock unit expense ratably in 2024. The amount of expense recorded during the three and six months ended June 30, 2024 was $196,000 and $324,000 respectively.


In September 2020, the Company entered into an employment agreement with its new Chief Executive Officer whereby 20% of his base salary and performance bonuses will be paid in cash, and 80% will be paid in the form of deferred stock units (“DSUs”) through December 31, 2022 in accordance with the terms and subject to the provisions set forth in the DSU Agreement. DSUs credited to Mr. Lewis as of any date shall be fully vested and nonforfeitable at all times. Pursuant to an amendment to the DSU Agreement in July 2022, the Company shall issue the shares earned through December 31, 2022 underlying the outstanding whole number of DSUs credited to Mr. Lewis as follows: twenty five percent shall be issued on March 1, 2023, fifty percent shall be issued on March 1, 2024 and twenty five percent shall be issued on September 1, 2028. Additionally, a 2023 DSU Agreement was executed in July 2022, whereby Mr. Lewis would continue to receive 20% of salary in cash and 80% in DSUs through December 31, 2023. The shares under the 2023 DSU Agreement are to be issued fifty percent on March 1, 2025 and fifty percent on January 5, 2026.


For the three months ended March 31, 2023, approximately $112,000 of his compensation was recorded as stock compensation expense representing 72,440 shares of common stock to be issued under the DSU agreement with a weighted average grant date fair value of $1.55 per share.



On March 1, 2024, fifty percent of the DSU’s were issued to Mr. Lewis in accordance with the DSU Agreement. A total of 367,800 shares were due to be issued; however, 153,288 shares were withheld to cover income tax withholding of $300,445 resulting in 214,512 shares actually issued. On March 1, 2023, twenty five percent of the DSU’s were issued to Mr. Lewis in accordance with the DSU Agreement. A total of 183,900 shares were due to be issued; however, 75,529 shares were withheld to cover income tax withholding of $156,345 resulting in 108,371 shares actually issued.


Also, Mr. Lewis’ bonus for the year ended December 31, 2022 of $210,000 (which was included in accrued compensation at December 31, 2022) was approved in January 2023 and represents 143,836 shares of common stock to be issued under the DSU agreement with a grant date fair value of $1.46 per share. The $210,000 was reclassified from accrued compensation to additional paid in capital in January 2023.



There is no unrecognized compensation expense related to the DSUs.
 
12
6. Common Stock Warrants


The following table summarizes the common stock warrant activity from December 31, 2023 through June 30, 2024:
 
 
  
Shares
    
Weighted Average
Exercise Price
  
Outstanding, December 31, 2023
    
9,256,493
    
$
4.22
  
Granted
    
400,000
      
3.49
  
Exercised
    
(125,093
)
    
3.00
  
Forfeited/cancelled
    
(104,547
)
    
4.49
  
Outstanding, June 30, 2024
    
9,426,853
    
$
4.20
  



The weighted average expiration of the warrants outstanding as of June 30, 2024 is 2.4 years.

7. Loss Per Share


Basic net loss per common share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares and other potential common shares then outstanding. Potential common shares consist of common shares issuable upon the assumed exercise of in-the-money stock options and warrants and potential common shares related to the conversion of the preferred stock. The computation of diluted net loss per share does not assume the issuance of common shares that have an anti-dilutive effect on net loss per share.



Dilutive shares which could exist pursuant to the exercise of outstanding stock instruments and which were not included in the calculation because their affect would have been anti-dilutive are as follows:
 
 
  
June 30,
2024
   
June 30,
2023
  
    (shares)
     (shares)
  
Warrants to purchase shares of common stock
    
9,426,853
      
11,957,964
  
Options to purchase shares of common stock
    
7,369,758
      
6,286,757
  
Restricted stock units
    408,000       —  
Shares of common stock issuable upon conversion of convertible notes payable – related party
    
6,721,188
      
6,117,006
  
Shares of common stock issuable upon conversion of convertible line of credit – related party
     21,016,837       10,170,002  
Shares of common stock issuable upon conversion of preferred stock
    
499,174
      
503,340
  
 
    
45,441,810
      
35,035,069
  

8. Common Stock

2020 At Market Issuance of Common Stock


On May 11, 2020, the Company entered into an At Market Issuance Sales Agreement (the “2020 At Market Agreement”) with a sales agent under which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $40.0 million from time to time through the sales agent. Sales of the Company’s common stock through the sales agent, if any, will be made by any method that is deemed an “at the market” offering as defined by the U.S. Securities and Exchange Commission. The Company will pay to the sales agent a commission rate equal to 3.0% of the gross proceeds from the sale of any shares of common stock sold through the sales agent under the 2020 At Market Agreement. During the six months ended June 30, 2024 and 2023, there were no issuances of shares of common stock under the 2020 At Market Agreement.


For each of the six months ended June 30, 2024 and 2023, the Company issued a total of 29,950 and 30,200 shares of common stock, respectively, for dividends on Series A and Series C Preferred Stock.

13
9. Convertible Line of Credit – Related Party



On July 25, 2022, the Company and Richard E. Uihlein (the “Lender”) entered into a Line of Credit Letter Agreement (the “Credit Agreement”), pursuant to which the Lender shall provide the Company a line of credit of up to $60.0 million (the “Line of Credit”) to finance the Company’s working capital needs. The Company may draw upon the Line of Credit through July 31, 2024.



Each advance made pursuant to the Credit Agreement shall be evidenced by an unsecured, convertible promissory note (individually, a “Promissory Note,” and collectively, the “Promissory Notes”), and bear interest at the Applicable Federal Rate for short term loans, plus two (2%) percent. Principal and interest on the Promissory Notes are due on or before January 31, 2026. Only with the consent of the Lender, may the Promissory Notes be prepaid, in whole or in part, at any time without premium or penalty, but with interest on the amount or amounts prepaid.



At the election of Lender, the principal and accrued interest on Promissory Note(s) may be converted into the number of shares of the Company’s Common Stock equal to the amount of principal and accrued interest on such Promissory Note divided by the price equal to the closing price of the Common Stock on the date of such Promissory Note, but in no event less than $3.00 per share.



In connection with the Credit Agreement, the Company agreed to issue the Lender warrants to purchase up to an aggregate of 1,700,000 shares of the Company’s common stock, par value $0.001 per share (collectively, the “Warrants”). Upon execution of the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 500,000 shares of Company’s Common Stock at an exercise price of $5.00 per share, which Warrant is exercisable upon issuance. Further, pursuant to the Credit Agreement, the Company shall issue to the Lender additional Warrants to purchase up to the remaining 1,200,000 shares of the Company’s common stock, ratably, upon borrowings under the Credit Agreement, with exercise prices equal to 150% of the closing price of the Company’s common Stock on the date of the Promissory Note evidencing such draw, but in no event more than $10.00 per share nor less than $3.00 per share. The Warrants expire on July 31, 2029.



The fair value of the 500,000 warrants vested at closing on July 25, 2022 was $738,000 at the date of issuance based on the following assumptions: an expected life of 7 years, volatility of 92%, risk free interest rate of 3.19% and zero dividends. The fair value of the vested warrants was recorded in other assets (non-current) as a deferred financing cost and will be amortized on a straight-line basis from July 25, 2022 through January 31, 2026. Amortization for the three months ended June 30, 2024 and 2023 of $52,000 and $52,000, respectively, was recorded as interest expense. Amortization for the six months ended June 30, 2024 and 2023 of $104,000 and $104,000, respectively, was recorded as interest expense.



On December 19, 2022, the Company executed a $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 6.46% (Applicable Federal Rate for short term loans on date of draw of 4.46% plus 2%). The effective interest rate is approximately 7.1%. Accrued interest on this draw was $1,038,000 and $349,000 at June 30, 2024 and 2023, respectively. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.00 per share, which Warrant is exercisable upon issuance.



The fair value of the 200,000 warrants vested at closing on December 19, 2022 was $160,780 at the date of issuance based on the following assumptions: an expected life of 7 years, volatility of 91%, risk free interest rate of 4.06% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal to be amortized on a straight-line basis, which is not materially different than the effective interest method, from December 19, 2022 through January 31, 2026. Amortization for the six months ended June 30, 2024 and 2023 of $26,000 in each period and was recorded as interest expense. The fair value of warrants that vest in the future based on borrowings will be computed when those borrowings occur and amortized over the remaining period through January 31, 2026.



On March 31, 2023, the Company executed an additional $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 6.41% (Applicable Federal Rate for short term loans on date of draw of 4.41% plus 2%). The effective interest rate is approximately 7.1%. Accrued interest on this draw was $832,000 and $161,000 at June 30, 2024 and 2023, respectively. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.26 per share, which Warrant is exercisable upon issuance.


The fair value of the 200,000 warrants vested at closing on March 31, 2023 was $296,680 at the date of issuance based on the following assumptions: an expected life of 6.33 years, volatility of 88%, risk free interest rate of 3.94% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal to be amortized on a straight-line basis, which is not materially different than the effective interest method, from March 31, 2023 through January 31, 2026. Amortization for the six months ended June 30, 2024 and 2023 of $52,000 and $26,000, respectively, and was recorded as interest expense.

14

On June 30, 2023, the Company executed an additional $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 6.34% (Applicable Federal Rate for short term loans on date of draw of 4.34% plus 2%). The effective interest rate is approximately 7.1%. Accrued interest on this draw was $653,000 and $0 at June 30, 2024 and 2023, respectively. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.00 per share, which Warrant is exercisable upon issuance.


The fair value of the 200,000 warrants vested at closing on June 30, 2023 was $179,920 at the date of issuance based on the following assumptions: an expected life of 6.08 years, volatility of 85%, risk free interest rate of 3.59% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal amortized on a straight-line basis, which is not materially different than the effective interest method, from June 30, 2023 through January 31, 2026. Amortization for the six months ended June 30, 2024 and 2023 of $34,000 and $0, respectively, and was recorded as interest expense.



On December 29, 2023, the Company executed an additional $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 7.13% (Applicable Federal Rate for short term loans on date of draw of 5.13% plus 2%). The effective interest rate is approximately 7.5%. Accrued interest on this draw was $362,000 June 30, 2024. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.00 per share, which Warrant is exercisable upon issuance.



The fair value of the 200,000 warrants vested at closing on December 31, 2023 was $193,745 at the date of issuance based on the following assumptions: an expected life of 5.7 years, volatility of 79%, risk free interest rate of 4.49% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal amortized on a straight-line basis, which is not materially different than the effective interest method, from December 29, 2023 through January 31, 2026. Amortization for the six months ended June 30, 2024 of $47,000 and was recorded as interest expense.



On March 29, 2024, the Company executed an additional $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 6.62% (Applicable Federal Rate for short term loans on date of draw of 4.62% plus 2%). The effective interest rate is approximately 7.1%. Accrued interest on this draw was $166,000 June 30, 2024. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.59 per share, which Warrant is exercisable upon issuance.


The fair value of the 200,000 warrants vested at closing on March 29, 2024, was $277,389 at the date of issuance based on the following assumptions: an expected life of 5.33 years, volatility of 75%, risk free interest rate of 4.19% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal amortized on a straight-line basis, which is not materially different than the effective interest method, from March 29, 2024 through January 31, 2026. Amortization for the six months ended June 30, 2024 of $38,000 and was recorded as interest expense.



On June 28, 2024, the Company executed an additional $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 7.01% (Applicable Federal Rate for short term loans on date of draw of 5.01% plus 2%). The effective interest rate is approximately 7.4%.  The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.39 per share, which Warrant is exercisable upon issuance.



The fair value of the 200,000 warrants vested at closing on June 28, 2024, was $260,000 at the date of issuance based on the following assumptions: an expected life of 5.03 years, volatility of 77%, risk free interest rate of 4.29% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal amortized on a straight-line basis, which is not materially different than the effective interest method, from June 28, 2024 through January 31, 2026.



The fair value of warrants that vest in the future based on borrowings will be computed when those borrowings occur and amortized over the remaining period through January 31, 2026.

10. Supplemental Convertible Line of Credit – Related Party


On March 29, 2024, the Company and Richard E. Uihlein (the “Lender”) entered into a Supplemental Line of Credit Letter Agreement (the “Supplemental Credit Agreement”), pursuant to which the Lender shall provide the Company a line of credit of up to $10.0 million (the “Supplemental Line of Credit”) to finance the Company’s working capital needs. The Company may draw upon the Supplemental Line of Credit through March 31, 2025.



Each advance made pursuant to the Supplemental Credit Agreement shall be evidenced by an unsecured, convertible promissory note (individually, a “Promissory Note,” and collectively, the “Promissory Notes”), and bear interest at the Applicable Federal Rate for short term loans, plus two (2%) percent. Principal and interest on the Promissory Notes are due on or before March 31, 2026. Only with the consent of the Lender, may the Promissory Notes be prepaid, in whole or in part, at any time without premium or penalty, but with interest on the amount or amounts prepaid.


At the election of Lender, the principal and accrued interest on Promissory Note(s) may be converted into the number of shares of the Company’s Common Stock equal to the amount of principal and accrued interest on such Promissory Note divided by the price equal to the closing price of the Common Stock on the date of such Promissory Note, but in no event less than $3.00 per share.


In connection with the Supplemental Credit Agreement, the Company agreed to issue the Lender warrants to purchase up to an aggregate of 200,000 shares of the Company’s common stock, par value $0.001 per share (collectively, the “Warrants”). The Company shall issue to the Lender Warrants ratably, upon borrowings under the Supplemental Line of Credit, with exercise prices equal to 150% of the closing price of the Company’s common Stock on the date of the Promissory Note evidencing such draw, but in no event more than $10.00 per share nor less than $3.00 per share. The Warrants expire on July 31, 2029.

11. Commitments and Contingencies

Other Legal Proceedings


The Company records accruals for such contingencies to the extent that the Company concludes that their occurrence is probable, and the related damages are estimable. There are no significant pending legal proceedings.

Clinical Trial and Research Commitments


The Company has entered into agreements with contractors for research and development activities to further its product candidates. The contracts generally may be canceled at any time by providing thirty days’ notice.

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12. Leases


The Company has one operating lease for its office space which was amended effective March 1, 2022 for a term of 38 months with no residual value guarantees or material restrictive covenants. The amended lease provided for free rent for the first six and a half months of the lease and continues the security deposit of $6,000. In addition to base rental payments included in the contractual obligations table above, the Company is responsible for our pro-rata share of the operating expenses for the building. Our lease cost for the six-month periods ended June 30, 2024 and 2023 was approximately $26,000 for each period and is included in general and administrative expenses. As of June 30, 2024, the right to use lease asset consisted of $35,000 and is included in other assets. Also, at June 30, 2024, current lease liability of $44,000 is included in accrued expenses.



Maturity of operating lease as of June 30, 2024 in thousands:

2024
  

27
  
2025
     18  
Total
    
45
  
Less imputed interest
    
1
  
Present value of lease liability
  
$
44
  



The discount rate used in calculating the present value of the lease payments was 11%.

13. Galectin Sciences LLC


In January 2014, we created Galectin Sciences, LLC (the “LLC” or “Investee”), a collaborative joint venture co-owned by SBH Sciences, Inc. (“SBH”), to research and develop small organic molecule inhibitors of galectin-3 for oral administration. The LLC was initially capitalized with a $400,000 cash investment to fund future research and development activities, which was provided by the Company, and specific in-process research and development (“IPR&D”) contributed by SBH. The estimated fair value of the IPR&D contributed by SBH, on the date of contribution, was $400,000. Initially, the Company and SBH each had a 50% equity ownership interest in the LLC, with neither party having control over the LLC. Accordingly, from inception through the fourth quarter of 2014, the Company accounted for its investment in the LLC using the equity method of accounting. Under the equity method of accounting, the Company’s investment was initially recorded at cost with subsequent adjustments to the carrying value to recognize additional investments in or distributions from the Investee, as well as the Company’s share of the Investee’s earnings, losses and/or changes in capital. The estimated fair value of the IPR&D contributed to the LLC was immediately expensed upon contribution as there was no alternative future use available at the point of contribution. The operating agreement provides that if either party does not desire to contribute its equal share of funding required after the initial capitalization, then the other party, providing all of the funding, will have its ownership share increased in proportion to the total amount contributed from inception. In the fourth quarter of 2014, after the LLC had expended the $400,000 in cash, SBH decided not to contribute its share of the funding required. Cumulatively, the Company has contributed a total of $4,013,000, including $233,000 for the six months ended June 30, 2024, for expenses of the LLC. Since the end of 2014, SBH has contributed $711,000 for expenses in the LLC. As of June 30, 2024, the Company’s ownership percentage in the LLC was 85%. The Company accounts for the interest in the LLC as a consolidated, less than wholly owned subsidiary. Because the LLC’s equity is immaterial, the value of the non-controlling interest is also deemed to be immaterial.

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

In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements as defined under Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbor created therein for forward-looking statements. Such statements include, but are not limited to, statements concerning our anticipated operating results, research and development, clinical trials, regulatory proceedings, and financial resources, and can be identified by use of words such as, for example, “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and “would,” “should,” “could” or “may.” All statements, other than statements of historical facts, included herein that address activities, events, or developments that the Company expects or anticipates will or may occur in the future, are forward-looking statements, including statements regarding: plans and expectations regarding clinical trials; plans and expectations regarding regulatory approvals; our strategy and expectations for clinical development and commercialization of our products; potential strategic partnerships; expectations regarding the effectiveness of our products; plans for research and development and related costs; statements about accounting assumptions and estimates; expectations regarding liquidity and the sufficiency of cash to fund currently planned operations through at least May 15, 2025; our commitments and contingencies; and our market risk exposure. Forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which Galectin Therapeutics operates, and management’s beliefs and assumptions. These statements are not guarantees of future performance and involve certain known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties are related to and include, without limitation,


 •
our early stage of development,


•
we have incurred significant operating losses since our inception and cannot assure you that we will generate revenue or profit,


•
our dependence on additional outside capital,


•
we may be unable to enter into strategic partnerships for the development, commercialization, manufacturing and distribution of our proposed product candidates,


•
uncertainties related to any litigation,


•
uncertainties related to our technology and clinical trials, including expected dates of availability of clinical data,


•
we may be unable to demonstrate the efficacy and safety of our developmental product candidates in human trials,


•
we may be unable to improve upon, protect and/or enforce our intellectual property,


•
we are subject to extensive and costly regulation by the U.S. Food and Drug Administration (FDA) and by foreign regulatory authorities, which must approve our product candidates in development and could restrict the sales and marketing and pricing of such products,


•
competition and stock price volatility in the biotechnology industry,


•
limited trading volume for our stock, concentration of ownership of our stock, and other risks detailed herein and from time to time in our SEC reports, and


•
the impact resulting from a pandemic or the reemergence of COVID-19, which delayed our clinical trial and development efforts, as well as the impact that such a pandemic has on the volatility of the capital market and our ability to access the capital market and,


•
other risks detailed herein and from time to time in our SEC reports, including our Annual Report on Form 10-K filed with the SEC for the fiscal year ended December 31, 2023, and our subsequent SEC filings.

The following discussion should be read in conjunction with the accompanying consolidated financial statements and notes thereto of Galectin Therapeutics appearing elsewhere herein.

Overview

We are a clinical stage biopharmaceutical company engaged in drug research and development to create new therapies for fibrotic disease, cancer and selected other diseases. Our drug candidates are based on our method of targeting galectin proteins, which are key mediators of biologic and pathologic functions. We use naturally occurring, readily-available plant products as starting material in manufacturing processes to create proprietary, patented complex carbohydrates with specific molecular weights and other pharmaceutical properties. These complex carbohydrate molecules are appropriately formulated into acceptable pharmaceutical formulations. Using these unique carbohydrate-based candidate compounds that largely bind and inhibit galectin proteins, particularly galectin-3, we are undertaking the focused pursuit of therapies for indications where galectin proteins have a demonstrated role in the pathogenesis of a given disease. We focus on diseases with serious, life- threatening consequences and those where current treatment options are limited specifically in MASH (metabolic dysfunction-associated steatohepatitis) (formerly known as non-alcoholic steatohepatitis or NASH) with cirrhosis and certain cancer indications. Our strategy is to establish and implement clinical development programs that add value to our business in the shortest period of time possible and to seek strategic partners when one of our programs becomes advanced and requires significant additional resources.

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Our lead galectin-3 inhibitor is belapectin (GR-MD-02), which has been demonstrated in preclinical models to reverse liver fibrosis and cirrhosis and in clinical studies to decrease portal hypertension and prevent its complication: the development of esophageal varices. Belapectin has the potential to treat many diseases due to galectin-3’s involvement in multiple key biological pathways such as fibrosis, immune cell function and immunity, cell differentiation, cell growth, and apoptosis (cell death). The importance of galectin-3 in the fibrotic process is supported by experimental evidence. Animals with the galectin-3 gene “knocked-out” can no longer develop fibrosis in response to experimental stimuli compared to animals with an intact galectin-3 gene. We are using our galectin-3 inhibitor to treat advanced liver fibrosis and liver cirrhosis in NASH patients. We have completed two Phase 1 clinical studies, a Phase 2 clinical study in MASH patients with advanced fibrosis (NASH-FX) and a second Phase 2b clinical trial in NASH patients with compensated cirrhosis and portal hypertension (NASH-CX).
In February 2023, we completed randomizations totaling 357 patients in a large, global Phase 2b/3 clinical trial, the NAVIGATE trial. Our study protocol was filed with the FDA on April 30, 2020, for a seamless adaptively-designed Phase 2b/3 clinical study evaluating the safety and efficacy of our galectin-3 inhibitor, belapectin, for the prevention of esophageal varices in patients with MASH cirrhosis (Further details are available at www.clinicaltrials.gov under study NCT04365868. In September 2020, the Company received a letter from the FDA providing comments, asking questions and providing guidance on various aspects of the ongoing NAVIGATE trial. These comments were addressed, and the study proceeded accordingly. An interim analysis of NAVIGATE is expected late in the fourth quarter of 2024.
Additionally, a study protocol entitled “A Single-dose, Open-label, Pharmacokinetic Study of Belapectin (GR-MD-02) in Subjects With Normal Hepatic Function and Subjects With Varying Degrees of Hepatic Impairment” has been filed with the FDA to examine the effects of the drug in subjects with normal hepatic function and subjects with varying degrees of hepatic impairment (study details are listed under study NCT04332432 on www.clinicaltrials.gov); this study became fully enrolled in February 2022 and favorable results were reported in 2023.

We endeavor to leverage our scientific and product development expertise as well as established relationships with outside sources to achieve cost-effective and efficient drug development. These outside sources, amongst others, provide us with expertise in preclinical models, pharmaceutical development, toxicology, clinical trial operations, pharmaceutical manufacturing, including physical and chemical drug characterization, and commercial development. We also have established through our majority-owned joint venture subsidiary, Galectin Sciences LLC, a discovery program developing small molecules that inhibit galectin-3 and may afford alternative drug delivery (e.g., oral) and as a result expand the potential uses of galectin-3 inhibitor beyond belapectin. Three chemical series of composition of matter patents have been filed.
We are also pursuing a development pathway to clinical enhancement and commercialization for our lead compounds in immuno-oncology following our previous successful collaboration with Providence Portland Cancer Center. In 2022, we filed a new IND with FDA for advanced or metastatic head and neck cancer using belapectin in combination with a checkpoint (PD-1) inhibitor and received a Study May Proceed letter. The proposed phase 2 trial commencement is dependent on timing of financing.
All of our proposed products are presently in development, including pre-clinical and clinical trials.

Our Drug Development Programs

Galectins are a class of proteins that are made by many cells in the body, but predominantly in cells of the immune system. As a group, these proteins are able to bind to sugar molecules that are attached to other proteins, called glycoproteins that are responsible for various functions within the body, most notably inflammation and fibrosis. Galectins, in particular galectin-3, act as a molecular glue, bringing together molecules that have sugars on them. Galectin-3, is known to be markedly increased in a number of significant diseases including inflammatory diseases leading to organs scarring (e.g. liver, lung, kidney, and heart) and cancers. The increase in galectin-3, by creating the so-called galectin-3 fibrosome, promotes the progression of multiple diseases. Published data substantiating the importance of galectin-3 in the fibrotic process arises from gene knockout experiments in animal studies. For instance, mice genetically altered to eliminate the galectin-3 gene, and thus unable to produce galectin-3, do not develop liver fibrosis in response to toxic insult to the liver.
We have one new proprietary chemical entity (NCE) in development, belapectin, which has shown promise in preclinical and clinical studies for the treatment of liver fibrosis, severe skin disease, and cancer (melanoma and head and neck squamous cell carcinoma). Currently, we are focusing on development of belapectin for the treatment of NASH cirrhosis and head and neck cancer. Belapectin is a proprietary, patented compound derived from natural, plant-based, starting materials, which following chemical processing, exhibits the properties of binding to and inhibiting galectin-3.

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 Our product pipeline is shown below:      
       
Indication
Drug
  
Status
Prevention of esophageal varices
      
in
      
NASH cirrhosis
      
       
Phase 1 interaction trial:
belapectin
  
IND submitted January 2013. Results from the Phase 1 interaction trial were reported
NASH-CX trial and
    
in 2014, with final results reported in January 2015.
NASH-FX trial
    
The Phase 2 NASH FX trial was conducted in patients with advanced fibrosis but not
    
     
cirrhosis. Its principal purpose was to evaluate various imaging modalities. The NASH
     
FX trial top line data was reported in September 2016 and published in Alimentary
     
Pharmacology and Therapeutics in 2016.
     
The Phase 2 NASH CX trial was conducted in patients with compensated cirrhosis and
     
portal hypertension. The NASH CX trial top line data was reported in December 2017
     
and was published in Gastroenterology in 2020.
NASH NAVIGATE
    
Following FDA feedback, the NAVIGATE trial is an adaptive Phase 2b/3 trial for the
     
prevention of esophageal varices in MASH patients with compensated cirrhosis and
     
clinical signs of portal hypertension. A Phase 2b interim efficacy analysis will be
     
incorporated to confirm previous Phase 2 data, select an optimal dose and reaffirm the
     
risk/benefit of belapectin. If required, the Phase 3 end of study analysis will evaluate
     
the development of esophageal varices as the same primary outcome of efficacy and a
     
composite clinical endpoint including progression to varices requiring treatment as a
     
key secondary outcome of efficacy (www.clinicaltrials.gov NCT04365868). The final
     
patient was randomized in February 2023 and an interim analysis is expected late in
     
the fourth quarter of 2024.
Phase 1 study: hepatic insufficiency
    
A hepatic impairment study was conducted in subjects with normal hepatic function
     
and subjects with varying degrees of hepatic impairment (www.clinicaltrials.gov
     
NCT04332432) and began enrolling patients in the second quarter of 2020. The study
     
completed enrollment in February 2022 and favorable results were presented in 2023.
Cancer Immunotherapy
      
       
Melanoma, Head, Neck Squamous
belapectin
  
Investigator IND study was completed. A Phase 1B study began in Q-1 2016. Early
Cell
    
data was reported in February 2017 and additional data were reported in September
Carcinoma (HNSCC)
    
2018. Data from an extension trial was reported in July 2021 for additional melanoma
     
and HNSCC patients which provided a rational basis for additional trials which the
     
Company is exploring. In the third quarter of 2022, the Company announced its IND
     
application for belapectin in combination with a checkpoint inhibitor for the treatment
     
of HNSCC was filed and a Study May Proceed letter was received from FDA. The
     
Company is reviewing options for financing this trial which will determine when such
     
trial could commence.

Liver cirrhosis. Belapectin is our lead product candidate for treatment of compensated MASH cirrhosis in patients with portal hypertension. Our preclinical data show that belapectin has a significant therapeutic effect on liver fibrosis as shown in several relevant animal models. In addition, in MASH animal models, belapectin has been shown to reduce liver fat, inflammation, portal pressure, and ballooning degeneration (death of liver cells). Therefore, we chose belapectin as the lead candidate in a development program targeted initially at fibrotic liver disease associated with MASH. In January 2013, an Investigational New Drug (“IND”) was submitted to the FDA with the goal of initiating a Phase 1 study in patients with MASH and advanced liver fibrosis to evaluate the safety of belapectin and pharmacodynamics biomarkers of disease. On March 1, 2013, the FDA indicated we could proceed with a US Phase 1 clinical trial for belapectin with a development program aimed at obtaining support for a proposed indication of belapectin for treatment of MASH with advanced fibrosis. The Phase 1 trial was completed and demonstrated that belapectin up to 8 mg/kg Lean Body Mass (LBM), i.v. was safe and well tolerated.
Additionally, an open label drug-drug phase 1 interaction study was completed in healthy volunteers during the second quarter of 2015 with belapectin and it showed that with 8 mg/kg LBM dose of belapectin and 2 mg/kg LBM dose of midazolam there was no drug-drug interaction, and no serious adverse events or drug-related adverse events were observed. The secondary objective was to assess the safety and tolerability of belapectin when administered concomitantly with midazolam.
Our Phase 2 program in fibrotic disease consisted of two separate human clinical trials. The main clinical trial was the Phase 2b NASH-CX study for one year for patients with MASH with compensated cirrhosis and portal hypertension, which began enrolling patients in June 2015. This study was a randomized, placebo-controlled, double-blind, parallel-group Phase 2b trial to evaluate the safety and efficacy of belapectin for treatment of liver fibrosis and resultant portal hypertension in MASH patients with compensated cirrhosis. A smaller, exploratory NASH-FX trial was conducted to explore potential use of various non-invasive imaging techniques in MASH patients with advanced fibrosis but not cirrhosis.

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NASH-FX Trial: The NASH-FX trial was a Phase 2a pilot trial for patients with MASH and advanced fibrosis that explored use of three non-invasive imaging technologies. It was a short, single site, four-month trial in 30 NASH patients with advanced fibrosis (F3) randomized 1:1 to either 9 bi-weekly doses of 8 mg/kg LBM of belapectin or placebo. The trial did not meet its primary endpoint as measured using multi-parametric magnetic resonance imaging (LiverMultiScan(R), Perspectum Diagnostics). The trial also did not meet secondary endpoints that measure liver stiffness as a surrogate for fibrosis using, magnetic resonance-elastography and FibroScan® score. With a four-month treatment period and a small number of patients per arm the study was not powered to demonstrate efficacy results in established advanced liver fibrosis. In the trial however, belapectin was found to be safe and well tolerated with no serious adverse events and showing evidence of a pharmacodynamic effect. These results provided support for further development in MASH.
NASH-CX Trial: The NASH-CX trial was a larger multi-center clinical trial that explored the use of belapectin for the treatment of patients with well-compensated MASH cirrhosis and portal hypertension. Enrollment was completed in September 2016, and a total of 162 patients at 36 sites in the United States were randomized to receive either 2 mg/kg LBM of belapectin, 8 mg/kg LBM of belapectin or placebo. Approximately 50% of patients at baseline had esophageal varices (a complication of portal hypertension). The primary endpoint was a reduction in hepatic venous pressure gradient (HVPG), a hemodynamic measure that estimates portal hypertension. Patients received an infusion of belapectin or placebo every other week for one year and were evaluated to determine the change in HVPG as compared with placebo. Secondary or exploratory endpoints included evaluation of fibrosis on liver biopsy, measurement of liver stiffness (FibroScan) and assessment of liver metabolism (13C-methacetin breath test). Top line data readout was reported in December 2017. The study demonstrated a favorable safety profile and clinically meaningful efficacy results in patients without esophageal varices at baseline as demonstrated by a decrease in portal pressure associated with the prevention of development of varices when compared to placebo.

In the total patient population, the primary endpoint HVPG showed a trend toward benefit with belapectin treatment, but the difference from placebo was not statistically significant. The mean change in HVPG of placebo from baseline to week 54 was 0.3 mm Hg. The mean change in HVPG from baseline was -0.37 and -0.42 for the 2 mg/kg LBM dose and 8 mg/kg LBM dose of belapectin, respectively.
In those MASH cirrhosis patients with portal hypertension who have not yet developed esophageal varices at baseline (about 50% of the total population), there was a statistically significant effect of the 2 mg/kg LBM dose of belapectin on the absolute change in HVPG (-1.08 mm Hg, p<0.01). The effect of the 8 mg/Kg LBM dose of belapectin on absolute or percent change in HVPG from baseline to week 54 was not significant.
Also because of the clinical relevance of this population, a responder analysis was performed on those patients without esophageal varices at baseline. Analysis was performed looking at two groups: those with an equal to or greater than 2 mm Hg decrease in HVPG from baseline or those with an equal to or greater than 2 mm Hg and a greater than or equal to 20% decrease in HVPG from baseline. In both cases, the change observed in the belapectin 2 mg/kg LBM group was statistically significant (p<0.01) while that of the 8 mg/kg LBM group was not.
Over the 54-week treatment period, in patients without varices at baseline there were also a statistically significantly fewer new varices that developed in the belapectin treatment groups (0% and 4% in the 2 mg/kg LBM and the 8 mg/kg LBM, respectively) vs placebo (18%). This meant that the decrease seen in portal pressure was associated with a decreased incidence of esophageal varices. The results were noticeable in the belapectin 2 mg/Kg LBM group as statistical significance against placebo was achieved for both parameters. As esophageal varices can lead to hemorrhagic complication, which can be fatal, and are a severe complication of liver cirrhosis, we believe the prevention of esophageal varices may represent a clinically relevant measure of clinical efficacy in patients with NASH cirrhosis.

The major conclusions from the NASH-CX trial results were that: (i) belapectin had a statistically significant and clinically meaningful effect in improving HVPG vs placebo in patients with MASH cirrhosis who did not have esophageal varices at baseline, (ii) Belapectin in the total patient population was associated with a statistically significant improvement in hepatocyte ballooning (i.e. cell death), (iii) There was a statistically significant reduction (p=0.02) in the development of new esophageal varices in drug-treated patients compared to placebo. We believe that the prevention of esophageal varices is a clinically relevant endpoint related to patient outcomes, (iv) While there was a drug effect in both the 2 mg/kg LBM and 8 mg/kg LBM groups on the development of varices and liver biopsy there was a consistently greater and statistically significant effect of the 2 mg/kg LBM dose of belapectin, (v) belapectin appears to be safe and well tolerated in this one year clinical trial, a feature that is of prime importance for a cirrhotic population and (vi) This is the first large, randomized clinical trial to demonstrate a clinically meaningful improvement in portal hypertension in patients with compensated MASH cirrhosis who have not yet developed esophageal varices.

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Further information and details on the NASH-CX results is available in public presentations posted to our website and filed with the SEC and in a peer reviewed publication in Gastroenterology 2020;158:1334–1345.
NASH NAVIGATE Trial: Building on the experience of the NASH-CX trial, the NAVIGATE Trial is a seamless adaptively-designed Phase 2b/3 clinical study evaluating the safety and efficacy of our galectin-3 inhibitor, belapectin, for the prevention of esophageal varices in patient with MASH cirrhosis. The major features of this innovative Phase 2b/3 study design are: i) In patients with NASH cirrhosis and clinical signs of portal hypertension but without esophageal varices at baseline, evaluated by an esophago-gastro-duodeno endoscopy, this trial will assess the effect of belapectin on the incidence of new varices (the primary endpoint) – as well as assessing the effect of belapectin on the incidence of additional clinically significant cirrhosis-related outcomes (a key secondary efficacy endpoint), (ii) The study targets MASH patients with a clearly identified unmet medical need: patients with compensated cirrhosis who have clinical signs of portal hypertension and, thus, are at risk of developing esophageal varices, a potentially life-threatening complication of cirrhosis (bleeding varices are a cause of death in about one-third of cirrhotic patients). There is currently no approved treatment for preventing varices in these patients. In addition, the development of esophageal varices reflects the progression of hepatic cirrhosis and thus portends the development of other cirrhosis complications such as ascites, hepatic encephalopathy, and liver failure, and (iii) During the first 18 months, two belapectin dose levels (2 mg/kg LBM and 4 mg/kg LBM) will be compared to placebo (phase 2b). Then, at the interim analysis (IA), assuming the study continues to the next stage, the best belapectin dose will be selected, based on efficacy and safety, for continued evaluation (Phase 3). The belapectin doses selected for the phase 2b/3 were based on the analysis of the NASH-CX trial. Prior belapectin clinical studies have also indicated the good tolerance and safety profile of belapectin with doses of up to 8 mg/kg LBM for up to 52 weeks, an important feature to inform the future risk benefit analysis in patients with MASH cirrhosis.

An interim analysis (IA) of efficacy and safety data will be conducted after all planned subjects in Phase 2b component have completed at least 78 weeks (18 months) of treatment and a second esophago-gastro-duodeno endoscopic assessment has been performed. The purpose of the IA is to allow potential seamless adaptive modifications of the phase 3 stage of the study, including: (1) the selection of the optimal dose of belapectin for Phase 3, (2) the re-estimation of the study sample size, (3) the modification of the randomization ratio in favor of the active treatment, (4) and/or termination of the study for overwhelming efficacy or for futility. The IA results are expected late in the fourth quarter of 2024.
The trial design also included a blinded sample size re-estimation (“SSR”) during the Phase 2b, prior to the IA, to allow for potential sample size readjustment. The SSR was conducted when 50% of the patients completed 18 months of therapy. The study design also minimizes invasive testing requirements, such as the measurement of HVPG or repeated liver biopsies, which we believe are particularly risky in patients with portal hypertension and facilitated enrollment of patients and should facilitate their retention. It also provides for a seamless transition of patients from the Phase 2b stage into the phase 3 stage, including the potential addition of new patients. The trial design introduces the notion of esophageal varices prevention as a primary pivotal outcome previously discussed with FDA.

We believe that these adaptations taken together are innovative and optimize conduct of the NAVIGATE trial with a clinically relevant primary outcome giving belapectin the best opportunity to show a positive therapeutic effect to address an unmet medical need. As a testimony of this innovation, the NAVIGATE trial design was presented to the hepatology community and featured during the meeting of the American Association for the Study of Liver Diseases, in November 2021. If the IA results of the NAVIGATE trial are compelling, there could be the potential for accelerated FDA approval pathway and/or partnership opportunity with a pharmaceutical company.
In this trial, as proposed in the protocol, secondary endpoints include a composite clinical outcomes endpoint, including varices requiring treatment (development of large varices or varices with a red wale), decompensating events, all-cause mortality, MELD score increase, liver transplant. Also, MASH non-invasive biomarkers will be evaluated. To target a population at risk of developing esophageal varices, patient selection was based on clinical signs of portal hypertension, including, but not limited to, a low platelet count, an increased spleen size, an increased liver stiffness, and/or evidence of abdominal collaterals circulation.
The focus and goal of the therapeutic program is to stop the progression of and/or reverse portal hypertension and thereby prevent the development of varices, potentially one of the most life-threatening complications of cirrhosis. Based on the results of the NASH-CX trial and subject to confirmation in later stage clinical trials, we believe that this goal is achievable in a significant portion of the MASH cirrhosis patient population i.e. those MASH cirrhosis patients with clinical signs of portal hypertension for whom, currently, apart from a liver transplantation, no specific liver targeted, treatments are available.

21
We activated more than 150 clinical trial sites in 14 countries for the NAVIGATE trial.
The COVID-19 pandemic delayed our regulatory and ethics approvals, recruitment of sites, and enrollment of patients for our NAVIGATE trial. For several reasons, the pandemic made enrolling patients for the NAVIGATE trial more challenging, notably because patients eligible for the NAVIGATE trial have liver cirrhosis and, as such, were at a greater health risk of complications from COVID-19 and needed to be vaccinated before taking the risk of infection associated with a visit to a healthcare facility. As we emerged from the COVID-19 pandemic, site recruitment and patient enrollment accelerated and we experienced increases in the speed of enrollment, particularly in the United States. However, we did not see the enrollment in Europe that we anticipated. Consequently, we activated multiple sites in Latin America. A resurgence of the COVID pandemic could again delay the regulatory, ethical and clinical milestones that we need to meet to conduct our NAVIGATE trial. The last patient from the phase 2b stage was randomized in February 2023, and consequently we expect topline results from the IA late in the fourth quarter of 2024.

Further details on the NAVIGATE trial can be found on www.clinicaltrials.gov under study NCT04365868 and on our NAVIGATE website (navigatenash.com).

The Company also has completed a Hepatic Impairment Study, which ran in parallel with the phase 2b/3 trial as part of the development program. The Hepatic Impairment Study was conducted at three sites and involved approximately 40 patients (divided amongst normal healthy volunteers, and patients with hepatic impairment categorized as Child-Turcotte-Pugh (CTP) classes A (mild), B (moderate), and C (severe). Each subject received a single infusion of belapectin (4 mg/kg LBM) and their serum belapectin levels were monitored for up to approximately two weeks to define the effects of various stages of cirrhosis on serum belapectin levels. The tolerance and safety of belapectin was evaluated. Enrollment in this study was completed in February 2022, and the final results were presented the The Liver Meeting™ 2023, hosted by the American Association for the Study of Liver Diseases. The data indicated that belapectin exposure did not increase with the degree of hepatic insufficiency, a property that is consistent with the observed distribution of the drug into activated macrophages.Further details on this hepatic impairment study can be found on www.clinicaltrials.gov study NCT04332432.

Cancer Immunotherapy. We believe there is potential for galectin inhibition to play a key role in the innovative area of cancer immunotherapy. For example, there have been several recent approvals of drugs that enhance a patient’s immune system to fight cancer. It is our goal to use ourgalectin-3 inhibitor to further enhance the immune system function to help the body to fight cancer in a way that complements other approaches to this type of therapy. This hypothesis is supported by the fact that galectin-3 is expressed at high levels in multiple types of tumors and their micro-environment, where it fosters the malignant nature of the tumors, and protects the tumors from immune attack by the patient’s own defense mechanism. Our drug candidates provide a promising new therapeutic approach to enhance the activity of the immune system against cancer cells. Preclinical studies have indicated that belapectin enhances the immune response to cancer cells, increased tumor shrinkage and enhanced survival in immune competent mice with prostate, breast, melanoma and sarcoma cancers when combined with one of the immune checkpoint inhibitors, anti-CTLA-4 or anti-PD-1, or with the immune cell activator anti-OX40. These preclinical data led to the filing of two Investigator-sponsored INDs and the initiation of Phase 1B studies of belapectin in combination with Yervoy® (ipilimumab) in metastatic melanoma and another phase 1B study in combination with KEYTRUDA (pembrolizumab) in patients with metastatic melanoma and head and neck squamous cell carcinoma. These studies were conducted under the sponsorship of Providence Portland Medical Center’s Earle A. Chiles Research Institute (EACRI).

The phase IB study in combination with Yervoy was rapidly discontinued after the first patients were recruited because of the availability of new treatment in the selected population.
Promising results were reported in the Phase 1b trial combining belapectin with pembrolizumab (KEYTRUDA®). When aggregated cohorts are combined, in advanced melanoma, a 50% objective response rate with belapectin in combination with KEYTRUDA, was documented. In addition, a 33% response rate was documented in patients with head and neck cancer. The results have been published in 2021 in a highly rated peer reviewed journal (Curti et al. Journal of Immunotherapy of cancer 2021;9:e002371). There was also a suggestion that the combination of belapectin with pembrolizumab could decrease the auto-immune side-effect induced by pembrolizumab. These side-effects, which are directly linked to the mechanism of action of pembrolizumab, can be poorly tolerated and even severe enough to lead to treatment interruption, even if the effect on the cancer was encouraging. This is, a very frustrating situation for patients who have to discontinue an active treatment but have no other options available to them. We believe these data, taken together with the observed favorable safety and tolerability of the combination, provide a rationale to move the belapectin program in oncology forward.
Late in 2021, we engaged three noted physicians – Dr. Chetan Bettegowda, from Johns Hopkins, and Dr. Nishant Agrawal and Dr. Ari Rosenberg, both from University of Chicago Medical Center – as consultants to help define the path forward in oncology. In consultation with our oncology experts, we have now selected the treatment of recurrent or metastatic head and neck cancer as the lead indication to pursue for belapectin in combination with an immune checkpoint inhibitor. The decision is notably based on the lack of available treatments for these patients, the limited number of therapies in development, and the resulting very high medical need. We filed an IND with FDA and are planning a phase 2 trial to be filed with the FDA oncology division.

22
Results of Operations

Three and Six Months Ended June 30, 2024 Compared to Three and Six Months Ended June 30, 2023

Research and Development Expense.

                          
   
Three Months Ended
    
Six Months Ended
          
2024 as Compared to 2023
        
   
June 30,
          
June 30,
    
Three Months
    
Six Months
  
   
2024
    
2023
    
2024
    
2023
    
$ Change
    
% Change
    
$ Change
    
% Change
  
                     
(In thousands, except %)
                    
Research and development
  
$
9,813
    
$
7,371
    
$
17,867
    
$
16,170
    
$
2,442
      
33
%
$
 
1,697
      
10
%

We generally categorize research and development expenses as either direct external expenses, comprised of amounts paid to third party vendors for services, or all other research and development expenses, comprised of employee payroll and general overhead allocable to research and development. We consider a clinical program to have begun upon acceptance by the FDA, or similar agency outside of the United States, to commence a clinical trial in humans, at which time we begin tracking expenditures by the product candidate. Clinical program expenses comprise payments to vendors related to preparation for, and conduct of, all phases of the clinical trial, including costs for drug manufacture, patient dosing and monitoring, data collection and management, oversight of the trials and reports of results. Pre-clinical expenses comprise all research and development amounts incurred before human trials begin, including payments to vendors for services related to product experiments and discovery, toxicology, pharmacology, metabolism, and efficacy studies, as well as manufacturing process development for a drug candidate.

Our research and development expenses were as follows:

   
Three Months Ended
    
Six Months Ended
  
   
June 30,
          
June 30,
        
   
2024
    
2023
    
2024
    
2023
  
Direct external expenses:
        
(in thousands)
              
                       
Clinical programs
  
$
7,858
    
$
5,494
    
$
13,729
    
$
12,314
  
Pre-clinical activities
    
182
      
776
      
743
      
1,548
  
All other research and development expenses
    
1,773
      
1,100
      
3,395
      
2,308
  
   
$
9,813
    
$
7,371
    
$
17,867
    
$
16,170
  

Clinical activities increased primarily due to timing of incurrence of expenditures related to our NAVIGATE clinical trial. Other research and development expenses increased primarily due to additional employees hired after the first and second quarters of 2023.
Both the time required and costs we may incur in order to commercialize a drug candidate that would result in material net cash inflow are subject to numerous variables, and therefore we are unable at this stage of our development to forecast useful estimates. Variables that make estimates difficult include the number of clinical trials we may undertake, the number of patients needed to participate in the clinical trial, patient recruitment uncertainties, trial results as to the safety and efficacy of our product, and uncertainties as to the regulatory agency response to our trial data prior to receipt of marketing approval. Moreover, the FDA or other regulatory agencies may suspend clinical trials if we or an agency believes patients in the trial are subject to unacceptable risks or find deficiencies in the conduct of the clinical trial. Delays or rejections may also occur if governmental regulation or policy changes during our clinical trials or in the course of review of our clinical data. Due to these uncertainties, accurate and meaningful estimates of the ultimate cost to bring a product to market, the timing of costs and completion of our program and the period during which material net cash inflows will commence are unavailable at this time.

23
General and Administrative Expense.
                          
                           
   
Three Months
    
Six Months
          
2024 as Compared to 2023
        
   
Ended June 30,
    
Ended June 30,
    
Three Months
    
Six Months
  
   
2024
    
2023
    
2024
    
2023
    
$ Change
    
% Change
    
$ Change
    
% Change
  
                     
(In thousands, except %)
                    
General and administrative
  
$
1,478
    
$
1,632
    
$
3,072
    
$
3,175
    
$
(154
)
    
(9
)%
$  
(103
)
    
(3
)%

General and administrative expenses consist primarily of salaries including stock-based compensation, legal and accounting fees, insurance, investor relations, business development and other office related expenses. The primary reasons for the decrease in general and administrative expenses for the three-months ended June 30, 2024 as compared to the same period in 2023 is due to a decrease in stock compensation expense of $31,000 and a decrease in investor relations/business development of $95,000.   The primary reasons for the decrease in general and administrative expenses for the six-months ended June 30, 2024 as compared to the same period in 2023 is due to a decrease in legal expense of $69,000 and a decrease in insurance expense of $65,000.
Liquidity and Capital Resources

Since our inception on July 10, 2000, we have financed our operations from proceeds of public and private offerings of debt and equity. As of March 31, 2024, we raised a net total of $304.5 million from these offerings. At June 30, 2024, the Company had $25.6 million of unrestricted cash and cash equivalents in addition to $10 million remaining available under two lines of credit provided by our chairman available to fund future operations. The Company believes there is sufficient cash to fund currently planned operations approximately through May 15, 2025. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of 12 months from the issuance date of this Form 10-Q. The ability of the Company to continue as a going concern is likely dependent on the results of the Interim Analysis of the Company’s NAVIGATE clinical trial expected in December 2024 and its ability to raise capital; however, the Company’s cash position may not be sufficient to support its daily operations in May 2025. We will require more cash to fund our operations after May 15, 2025 and believe we will be able to obtain additional financing. The currently planned operations include costs related to our adaptively designed NAVIGATE Phase 2b/3 clinical trial. However, there can be no assurance that we will be successful in obtaining such new financing or, if available, that such financing will be on terms favorable to us.
Net cash used in operations decreased by $188,000 to $20,438,000 for the six months ended June 30, 2024, as compared to $20,626,000 for the six months ended June 30, 2023. Cash operating expenses decreased principally due to timing of payment of expenses related to our NAVIGATE clinical trial with belapectin.
Off-Balance Sheet Arrangements

We have not created, and are not a party to, any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating parts of our business that are not consolidated into our financial statements. We do not have any arrangements or relationships with entities that are not consolidated into our financial statements that are reasonably likely to materially affect our liquidity or the availability of capital resources.

Application of Critical Accounting Policies and Estimates

The preparation of condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to accrued expenses, stock-based compensation, contingencies and litigation. We base our estimates on historical experience, terms of existing contracts, our observance of trends in the industry, information available from other outside sources and on various other factors that we believe to be appropriate under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting policies are those policies that affect our more significant judgments and estimates used in preparation of our consolidated financial statements. We believe our critical accounting policies include our policies regarding stock-based compensation, accrued expenses and income taxes. For a more detailed discussion of our critical accounting policies, please refer to our 2023 Annual Report on Form 10-K.

Item 3.
Quantitative and Qualitative Disclosures about Market Risk

Market risk represents the risk of loss that may impact our financial position, operating results or cash flows due to changes in the U.S. interest rates. The primary objective of our investment activities is to preserve cash until it is required to fund operations. To minimize risk, we maintain our portfolio of cash and cash equivalents in operating bank accounts and money market funds. Since our investments are short-term in duration, we believe that we are not subject to any material market risk exposure.

24
Item 4.
Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934) and concluded that, as of June 30, 2024, our disclosure controls and procedures were effective.
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

Changes in Internal Control Over Financial Reporting

During the quarter ended June 30, 2024, no change in our internal control over financial reporting has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1.
Legal Proceedings

None.

Item 1A.
Risk Factors

The information set forth in this report should be read in conjunction with the risk factors set forth in Item 1A, “Risk Factors,” of Part I of our Annual Report on Form 10-K for the year ended December 31, 2023, which could materially impact our business, financial condition or future results.

Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3.
Defaults Upon Senior Securities

None

Item 4.
Mine Safety Disclosures

Not Applicable

Item 5.
Other Information

Securities Trading Plans of Directors and Executive Officers

No officers or directors, as defined in Rule 16a-1(f), adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as defined in Regulation S-K Item 408, during the fiscal quarter ended June 30, 2024.
2024 Annual Meeting of Shareholders and Shareholder Nominations

On August 8, 2024, the Company’s board of directors of established January 23, 2025 as the date of the Company’s 2024 annual meeting of shareholders (the “Annual Meeting”).

Because the date of the Annual Meeting has changed by more than 30 days from the anniversary of the date of the Company’s 2023 annual meeting of shareholders, in accordance with Rule 14a-5(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company is informing stockholders of such change. Additionally, new deadlines have been set for submission of proposals by shareholders intended to be presented at the Annual Meeting and included in the Company’s proxy statement for the Annual Meeting.
 
In accordance with Rule 14a-8 under the Exchange Act (“Rule 14a-8”), if a stockholder wishes to present a proposal for inclusion in the proxy materials for the Annual Meeting, the Company’s Secretary must receive written notice of such proposal at the Company’s principal executive offices no later than the close of business on November 14, 2024, which the Company has determined to be a reasonable time before it expects to begin to print and send its proxy materials. Any such proposal must (i) meet the requirements set forth in the rules and regulations of the Securities and Exchange Commission (the “SEC”), including Rule 14a-8, in order to be eligible for inclusion in the proxy materials for the Annual Meeting and (ii) contain the information specified in, and otherwise comply with, the Company’s Amended and Restated Bylaws (the “Bylaws”).
 
In addition to satisfying the procedures set forth in the Bylaws, to comply with the universal proxy rules under the Exchange Act, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act, no later than November 24, 2024, which is 60 calendar days prior to the date of the Annual Meeting.

Item 6.
Exhibits

Exhibit
Number
   
 
Description of Document
   
Note
Reference
         
 
Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
    
         
 
Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
    
         
 
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    
         
 
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    
         
101.INS
  
Inline XBRL Instance Document** (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
    

25
Exhibit
Number
   
 
Description of Document
   
Note
Reference
         
101.SCH
  
Inline XBRL Taxonomy Extension Schema Document**
    
         
101.CAL
  
Inline XBRL Taxonomy Calculation Linkbase Document**
    
         
101.DEF
  
Inline XBRL Taxonomy Extension Definition Linkbase Document**
    
         
101.LAB
  
Inline XBRL Taxonomy Label Linkbase Document**
    
         
101.PRE
  
Inline XBRL Taxonomy Presentation Linkbase Document**
    
         
104*
  
Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document and included in Exhibit 101)
    


*
Filed herewith.

**
Furnished herewith and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

26
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on August 13, 2024.

 
GALECTIN THERAPEUTICS INC.
     
 
By:
/s/ Joel Lewis
 
Name:
Joel Lewis
 
Title:
Chief Executive Officer and President
   
(principal executive officer)
     
 
By:
/s/ Jack W. Callicutt
 
Name:
Jack W. Callicutt
 
Title:
Chief Financial Officer
   
(principal financial and accounting officer)


27
Exhibit 31.1

Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934

I, Joel Lewis, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of Galectin Therapeutics Inc;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

  (a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 13, 2024
  
/s/ Joel Lewis
 
Name:
Joel Lewis
 
Title:
Chief Executive Officer and President
   
(principal executive officer)


Exhibit 31.2

Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934

I, Jack W. Callicutt, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of Galectin Therapeutics Inc;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:


(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 13, 2024
  
/s/ Jack W. Callicutt
 
Name:
Jack W. Callicutt
 
Title:
Chief Financial Officer
   
(principal financial and accounting officer)


Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Galectin Therapeutics Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joel Lewis, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes- Oxley Act of 2002, that, to my knowledge:


 (1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 13, 2024
  
/s/ Joel Lewis
 
Name
Joel Lewis
 
Title :
Chief Executive Officer and President
   
(principal executive officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Galectin Therapeutics Inc. and will be retained by Galectin Therapeutics Inc. and furnished to the Securities and Exchange Commission or its staff upon request.


Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Galectin Therapeutics Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jack W. Callicutt, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:


 (1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 13, 2024
  
/s/ Jack W. Callicutt
 
Name:
Jack W. Callicutt
 
Title:
Chief Financial Officer
   
(principal financial and accounting officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Galectin Therapeutics Inc. and will be retained by Galectin Therapeutics Inc. and furnished to the Securities and Exchange Commission or its staff upon request.


v3.24.2.u1
Document and Entity Information - shares
 6 Months Ended
Jun. 30, 2024
Aug. 09, 2024
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2024  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q2  
Document Transition Report false  
Entity File Number 001-31791  
Entity Registrant Name GALECTIN THERAPEUTICS INC.  
Entity Central Index Key 0001133416  
Entity Incorporation, State or Country Code NV  
Entity Tax Identification Number 04-3562325  
Entity Address, Address Line One 4960 Peachtree Industrial Blvd.  
Entity Address, Address Line Two Suite 240  
Entity Address, City or Town Norcross  
Entity Address, State or Province GA  
Entity Address, Postal Zip Code 30071  
City Area Code 678  
Local Phone Number 620 -3186  
Title of 12(b) Security Common Stock  
Trading Symbol GALT  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   62,278,125
v3.24.2.u1
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Current assets:    
Cash and cash equivalents $ 25,598 $ 25,660
Prepaid expenses and other current assets 1,689 2,050
Total current assets 27,287 27,710
Other assets 368 490
Total assets 27,655 28,200
Current liabilities:    
Accounts payable 3,698 6,431
Accrued expenses and other 10,856 9,182
Accrued dividends payable 63 63
Total current liabilities 14,617 15,676
Convertible notes payable and accrued interest, net of discounts - related party (Note 3) 31,375 30,902
Derivative liabilities (Note 4) 1,764 1,004
Borrowing and accrued interest under convertible line of credit, net of debt discount - related party (Notes 9 and 10) 62,046 40,839
Other liabilities 0 20
Total liabilities 109,802 88,441
Commitments and contingencies (Note 11)
Series C super dividend redeemable convertible preferred stock; 1,000 shares authorized, 176 shares issued and outstanding at June 30, 2024 and December 31, 2023, redemption value: $8,124,000, liquidation value: $1,760,000 at June 30, 2024 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, 2024 and December 31, 2023, respectively 0 0
Series A 12% convertible preferred stock; 1,742,500 shares authorized, 1,235,000 issued and outstanding at June 30, 2024 and December 31, 2023, liquidation value $1,235,000 at June 30, 2024 500 500
Common stock, $0.001 par value; 150,000,000 shares authorized at June 30, 2024 and December 31, 2023, 62,148,134 and 61,852,914 issued and outstanding at June 30, 2024 and December 31, 2023, respectively 62 61
Additional paid-in capital 293,872 291,847
Retained deficit (378,304) (354,372)
Total stockholders' equity (deficit) (83,870) (61,964)
Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit) $ 27,655 $ 28,200
v3.24.2.u1
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)    
Series C super dividend redeemable convertible preferred stock, shares authorized (in shares) 1,000 1,000
Series C super dividend redeemable convertible preferred stock, shares issued (in shares) 176 176
Series C super dividend redeemable convertible preferred stock, shares outstanding (in shares) 176 176
Series C super dividend redeemable convertible preferred stock, redemption value $ 8,124,000  
Series C super dividend redeemable convertible preferred stock liquidation value $ 1,760,000  
Stockholders' equity (deficit):    
Undesignated stock, par value (in dollars per share) $ 0.01 $ 0.01
Undesignated stock, shares authorized (in shares) 20,000,000 20,000,000
Undesignated stock, shares designated (in shares) 20,000,000 20,000,000
Series A 12% convertible preferred stock, shares authorized (in shares) 1,742,500 1,742,500
Series A 12% convertible preferred stock, shares issued (in shares) 1,235,000 1,235,000
Series A 12% convertible preferred stock, shares outstanding (in shares) 1,235,000 1,235,000
Series A 12% convertible preferred stock, liquidation value $ 1,235,000  
Common stock, par value (in dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized (in shares) 150,000,000 150,000,000
Common stock, issued (in shares) 62,278,125 61,852,914
Common stock, outstanding (in shares) 62,278,125 61,852,914
v3.24.2.u1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Operating expenses:        
Research and development $ 9,813 $ 7,371 $ 17,867 $ 16,170
General and administrative 1,478 1,632 3,072 3,175
Total operating expenses 11,291 9,003 20,939 19,345
Total operating loss (11,291) (9,003) (20,939) (19,345)
Other income (expense):        
Interest income 80 50 160 93
Interest expense (1,269) (650) (2,321) (1,110)
Change in fair value of derivative 109 489 (760) (279)
Total other income (expense) (1,080) (111) (2,921) (1,296)
Net loss (12,371) (9,114) (23,860) (20,641)
Preferred stock dividends (64) (63) (72) (63)
Net loss applicable to common stockholders $ (12,435) $ (9,177) $ (23,932) $ (20,704)
Net loss per common share - basic (in dollars per share) $ (0.2) $ (0.15) $ (0.39) $ (0.35)
Net loss per common share - diluted (in dollars per share) $ (0.2) $ (0.15) $ (0.39) $ (0.35)
Weighted average common shares outstanding - basic (in shares) 62,233 59,582 62,104 59,531
Weighted average common shares outstanding - diluted (in shares) 62,233 59,582 62,104 59,531
v3.24.2.u1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
$ in Thousands
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (23,860) $ (20,641)
Adjustments to reconcile net loss to net cash flows from operating activities:    
Stock-based compensation expense 1,342 1,178
Amortization of right to use lease asset 18 16
Non-cash interest expense 457 313
Change in fair value of derivative liabilities 760 279
Changes in operating assets and liabilities:    
Prepaid expenses and other assets 361 458
Accounts payable, accrued expenses and other liabilities (1,380) (3,027)
Accrued interest on convertible debt - related party 1,864 798
Net cash from operating activities (20,438) (20,626)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Net proceeds from convertible line of credit - related party 20,000 20,000
Net proceeds from exercise of common stock warrants 376  
Net cash flows from financing activities 20,376 20,000
NET DECREASE IN CASH AND CASH EQUIVALENTS (62) (626)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 25,660 18,592
CASH AND CASH EQUIVALENTS, END OF PERIOD 25,598 17,966
NONCASH FINANCING ACTIVITIES:    
Payment of preferred stock dividends in common stock 72 62
Reclassification of accrued bonus to additional paid in capital 0 210
Common stock purchase warrants issued in connection with related party line of credit $ 537 $ 477
v3.24.2.u1
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED) - USD ($)
$ in Thousands
Preferred Stock [Member]
Series A 12% Convertible Preferred Stock [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Deficit [Member]
Total
Beginning balance at Dec. 31, 2022         $ 1,723
Beginning balance (in shares) at Dec. 31, 2022         176
Ending balance at Jun. 30, 2023         $ 1,723
Ending balance (in shares) at Jun. 30, 2023         176
Beginning balance at Dec. 31, 2022 $ 510 $ 59 $ 275,081 $ (309,567) $ (33,917)
Beginning balance (in shares) at Dec. 31, 2022 1,260,000 59,426,005      
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Series A 12% convertible preferred stock dividend     26 (26)  
Series A 12% convertible preferred stock dividend (in shares)   12,600      
Series C super dividend redeemable convertible preferred stock dividend     36 (37) (1)
Series C super dividend redeemable convertible preferred stock dividend (in shares)   17,600      
Common stock purchase warrants issued in connection with related party line of credit     477   477
Stock-based compensation expense     1,232   1,232
Stock-based compensation expense (in shares)   126,048      
Net loss       (20,641) (20,641)
Ending balance at Jun. 30, 2023 $ 510 $ 59 276,852 (330,271) (52,850)
Ending balance (in shares) at Jun. 30, 2023 1,260,000 59,582,253      
Ending balance at Jun. 30, 2023         $ 1,723
Ending balance (in shares) at Jun. 30, 2023         176
Beginning balance at Mar. 31, 2023 $ 510 $ 59 276,156 (321,094) $ (44,369)
Beginning balance (in shares) at Mar. 31, 2023 1,260,000 59,582,253      
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
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)
Ending balance at Jun. 30, 2023 $ 510 $ 59 276,852 (330,271) (52,850)
Ending balance (in shares) at Jun. 30, 2023 1,260,000 59,582,253      
Beginning balance at Dec. 31, 2023         $ 1,723
Beginning balance (in shares) at Dec. 31, 2023         176
Ending balance at Jun. 30, 2024         $ 1,723
Ending balance (in shares) at Jun. 30, 2024         176
Beginning balance at Dec. 31, 2023 $ 500 $ 61 291,847 (354,372) $ (61,964)
Beginning balance (in shares) at Dec. 31, 2023 1,235,000 61,852,914      
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Series A 12% convertible preferred stock dividend     30 (30)  
Series A 12% convertible preferred stock dividend (in shares)   12,350      
Series C super dividend redeemable convertible preferred stock dividend     42 (42)  
Series C super dividend redeemable convertible preferred stock dividend (in shares)   17,600      
Common stock purchase warrants issued in connection with related party line of credit     537   $ 537
Exercise of common stock options (in shares)   19,620     49,583
Common stock purchase warrants issued in connection with related party line of credit   $ 1 375   $ 376
Common stock purchase warrants issued in connection with related party line of credit (in shares)   125,093      
Stock-based compensation expense     1,041   1,041
Stock-based compensation expense (in shares)   250,548      
Net loss       (23,860) (23,860)
Ending balance at Jun. 30, 2024 $ 500 $ 62 293,872 (378,304) (83,870)
Ending balance (in shares) at Jun. 30, 2024 1,235,000 62,278,125      
Ending balance at Jun. 30, 2024         $ 1,723
Ending balance (in shares) at Jun. 30, 2024         176
Beginning balance at Mar. 31, 2024 $ 500 $ 61 292,499 (365,869) $ (72,809)
Beginning balance (in shares) at Mar. 31, 2024 1,235,000 62,148,134      
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Series A 12% convertible preferred stock dividend       (38) (38)
Series C super dividend redeemable convertible preferred stock dividend       (26) (26)
Common stock purchase warrants issued in connection with related party line of credit     260   260
Exercise of common stock options (in shares)   4,898      
Common stock purchase warrants issued in connection with related party line of credit   $ 1 375   376
Common stock purchase warrants issued in connection with related party line of credit (in shares)   125,093      
Stock-based compensation expense     738   738
Net loss       (12,371) (12,371)
Ending balance at Jun. 30, 2024 $ 500 $ 62 $ 293,872 $ (378,304) $ (83,870)
Ending balance (in shares) at Jun. 30, 2024 1,235,000 62,278,125      
v3.24.2.u1
Basis of Presentation, Liquidity and Going Concern
 6 Months Ended
Jun. 30, 2024
Basis of Presentation, Liquidity and Going Concern [Abstract]  
Basis of Presentation, Liquidity and Going Concern
1. Basis of Presentation, Liquidity and Going Concern



Galectin Therapeutics Inc. and subsidiaries (the “Company”) is a clinical stage biopharmaceutical company that is applying its leadership in galectin science and drug development to create new therapies for fibrotic disease and cancer. These candidates are based on the Company’s targeting of galectin proteins which are key mediators of biologic and pathologic function. These compounds also may have application for drugs to treat other diseases and chronic health conditions.



The unaudited condensed consolidated financial statements as reported in this Quarterly Report on Form 10-Q reflect all adjustments which are, in the opinion of management, necessary to present fairly the financial position of the Company as of June 30, 2024 and the results of its operations for the three and six months ended June 30, 2024 and 2023 and its cash flows for the six months ended June 30, 2024 and 2023. All adjustments made to the interim financial statements include all those of a normal and recurring nature. Amounts presented in the condensed consolidated balance sheet as of December 31, 2023 are derived from the Company’s audited consolidated financial statements as of that date, but do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date these financial statements are available to be issued. The results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. The unaudited condensed consolidated financial statements of the Company should be read in conjunction with its Annual Report on Form 10-K for the year ended December 31, 2023.



The Company has operated at a loss since its inception and has had no revenues. The Company anticipates that losses will continue for the foreseeable future. At June 30, 2024, the company had $25,598,000 of unrestricted cash and cash equivalents available to fund future operations. In July 2022, the Company entered into a $60 million unsecured line of credit financing, which has been fully drawn at June 30, 2024, with its chairman, Richard E. Uihlein (See Note 9). Additionally, on March 29, 2024, the Company entered into a supplemental unsecured $10 million line of credit financing also provided by our chairman (See Note 10). The Company believes there is sufficient cash, including availability of the line of credit, to fund currently planned operations approximately through May 15, 2025. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of 12 months from the issuance date of these financial statements. The ability of the Company to continue as a going concern is likely dependent on the results of the Interim Analysis of the Company’s NAVIGATE clinical trial expected in December 2024 and its ability to raise capital; however, the Company’s cash position may not be sufficient to support its daily operations in May 2025. To meet its future capital needs, the Company intends to raise additional capital through debt or equity financings, collaborations, partnerships or other strategic transactions. However, there can be no assurance that the Company will be able to complete any such transactions on acceptable terms or otherwise. The inability of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company’s business, results of operations and financial condition. The Company has the ability to delay certain research activities and related clinical expenses if necessary due to liquidity concerns until a date when those concerns are relieved.

The Company was founded in July 2000, was incorporated in the State of Nevada in January 2001 under the name “Pro-Pharmaceuticals, Inc.,” and changed its name to “Galectin Therapeutics Inc.” on May 26, 2011.
v3.24.2.u1
Accrued Expenses and Other
 6 Months Ended
Jun. 30, 2024
Accrued Expenses and Other [Abstract]  
Accrued Expenses and Other
2. Accrued Expenses and Other


Accrued expenses consist of the following:
 
 
  
June 30,
2024
    
December 31,
 2023
  
 
  
(in thousands)
  
Legal and accounting fees
  
$
65
    
$
40
  
Accrued compensation
    
865
      
1,129
  
Lease liability
    
44
      
46
  
Accrued research and development costs and other
    
9,882
      
7,967
  
Total
  
$
10,856
    
$
9,182
  



Research and development expenses, including personnel costs, allocated facility costs, lab supplies, outside services, contract laboratory costs related to manufacturing drug product, clinical trials and preclinical studies are charged to research and development expense as incurred. The Company accounts for nonrefundable advance payments for goods and services that will be used in future research and development activities as expense when the service has been performed or when the goods have been received. Our current NAVIGATE clinical trial is being supported by third-party contract research organizations, or CROs, and other vendors. We accrue expenses for clinical trial activities performed by CROs based upon the estimated amount of work completed on each trial. For clinical trial expenses and related expenses associated with the conduct of clinical trials, the significant factors used in estimating accruals include the number of patients enrolled, the number of active clinical sites, and the duration for which the patients have been enrolled in the trial. We monitor patient enrollment levels and related activities to the extent possible through internal reviews, review of contractual terms and correspondence with CROs. We base our estimates on the best information available at the time. We monitor patient enrollment levels and related activities to the extent possible through discussions with CRO personnel and based our estimates of clinical trial costs on the best information available at the time. However, additional information may become available to us which will allow us to make a more accurate estimate in future periods. In that event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain.
v3.24.2.u1
Convertible Notes Payable - Related Party
 6 Months Ended
Jun. 30, 2024
Convertible Notes Payable - Related Party [Member]  
Debt Instrument [Line Items]  
Convertible Notes Payable - Related Party

3. Convertible Notes Payable – Related Party

On April 16, 2021, the Company and Richard E. Uihlein entered into a debt financing arrangement whereby Mr. Uihlein loaned $10,000,000 to the Company. In consideration for the loan, the Company issued a convertible promissory note (the “April 2021 Note”) in the principal amount of ten million dollars.

The April 2021 Note has a maturity date of April 16, 2025, is prepayable at the option of the Company in whole or in part at any time and is convertible into the Company’s common stock at a conversion price equal to $5.00 per share at the option of the noteholder. The April 2021 Note bears interest at the rate of two percent (2%) per annum, compounded annually with an effective interest rate of approximately 3%. For the three months ended June 30, 2024 and 2023, approximately $53,000 and $52,000, respectively, of interest expense was accrued and included with the principal in the financial statements. For the six months ended June 30, 2024 and 2023, approximately $104,000 and $102,000, respectively, of interest expense was accrued and included with the principal in the financial statements.


The April 2021 Note also includes a contingent interest component that requires the Company to pay additional interest at a rate of two and one-half percent (2.5%) per quarter (10% per annum) (the “Additional Interest”) beginning on the date of issuance of this Note and ending on the maturity date, provided however, that such payment is only required if and only if the noteholder elects to convert the entire balance of the April 2021 Note into the Company’s common stock on or prior to maturity. As the contingent event is not based on creditworthiness, such feature is not clearly and closely related to the host instrument and accordingly must be bifurcated and recognized as a derivative liability and a debt discount on the April 2021 Note at its inception. The fair value of the contingent interest derivative liability was $420,000 at note inception (April 16, 2021). The fair value of the contingent interest derivative liability was $789,000 and $366,000 at June 30, 2024 and December 31, 2023, respectively, and is recognized as a derivative liability in the consolidated balance sheet. The change in the fair value of the derivative liability for the three months ended June 30, 2024 and 2023 of $(89,000) and $(221,000), respectively, was charged to other expense/(income) for the three months ended June 30, 2024 and 2023. The change in the fair value of the derivative liability for the six months ended June 30, 2024 and 2023 of $358,000 and $117,000, respectively, was charged to other expense/(income) for the six months ended June 30, 2023 and 2022. The amortization of the original $420,000 debt discount of $26,000 and $26,000 was recorded as additional interest expense for the three months ended June 30, 2024 and 2023, respectively. The amortization of the original $420,000 debt discount of $52,000 and $52,000 was recorded as additional interest expense for the six months ended June 30, 2024 and 2023, respectively.


On May 14, 2024, Mr. Uihlein, as holder of the April 2021 Note irrevocably elected to convert the entire principal amount of such note, plus accrued and unpaid interest, into shares of common stock of the Company at a price of $5.00 per share, effective as of April 16, 2025, which is the maturity date of the April 2021 Note.  The April 2021 Note will remain outstanding and accrue interest until maturity and no shares of common stock will be issued as a result of this election until April 16, 2025.

The September 2021 Note has a maturity date of September 17, 2025, is prepayable at the option of the Company in whole or in part at any time and is convertible into the Company’s common stock at a conversion price equal to $8.64 per share at the option of the noteholder. The September 2021 Note bears interest at the rate of two percent (2%) per annum, compounded annually with an effective interest rate of approximately 3%. For the three months ended June 30, 2024 and 2023, approximately $52,000 and $51,000, respectively, of interest expense was accrued and included with the principal in the financial statements. For the six months ended June 30, 2024 and 2023, approximately $104,000 and $101,000, respectively, of interest expense was accrued and included with the principal in the financial statements.


The September 2021 Note also includes a contingent interest component that requires the Company to pay additional interest at a rate of two and one-half percent (2.5%) per quarter (10% per annum) (the “Additional Interest”) beginning on the date of issuance of this Note and ending on the maturity date, provided however, that such payment is only required if and only if the noteholder elects to convert the entire balance of the September 2021 Note into the Company’s common stock on or prior to maturity. As the contingent event is not based on creditworthiness, such feature is not clearly and closely related to the host instrument and accordingly must be bifurcated and recognized as a derivative liability and a debt discount on the September Note at its inception. The fair value of the contingent interest derivative liability was $433,000 at note inception (September 17, 2021). The fair value of the contingent interest derivative liability was $309,000 and $169,000 and June 30, 2024 and December 31, 2023, respectively, and is recognized as a derivative liability in the consolidated balance sheet. The change in the fair value of the derivative liability for three months ended June 30, 2024 and 2023 of $2,000 and ($116,000), respectively, was recorded to other expense/(income) for three months ended June 30, 2024 and 2023. The change in the fair value of the derivative liability for six months ended June 30, 2024 and 2023 of $140,000 and $50,000, respectively, was recorded to other expense/(income) for six months ended June 30, 2024 and 2023. The amortization of the original $433,000 debt discount of $27,000 and $27,000 was recorded as additional interest expense for the three months ended June 30, 2024 and 2023. The amortization of the original $433,000 debt discount of $54,000 and $54,000 was recorded as additional interest expense for the six months ended June 30, 2024 and 2023.


On December 20, 2021, the second of the two promissory notes under the Loan Agreement was executed and delivered, (the “December 2021 Note”) to evidence the second loan in the principal amount of $10,000,000. The December 2021 Note has a maturity date of December 20, 2025, is prepayable at the option of the Company in whole or in part at any time and is convertible into the Company’s common stock at a conversion price equal to $5.43 per share at the option of the noteholder. The December Note bears interest at the rate of two percent (2%) per annum, compounded annually with an effective interest rate of approximately 3%. For three months ended June 30, 2024 and 2023, approximately $52,000 and $51,000, respectively, of interest expense was accrued and included with the principal in the financial statements. For six months ended June 30, 2024 and 2023, approximately $104,000 and $101,000, respectively, of interest expense was accrued and included with the principal in the financial statements.


The December 2021 Note also includes a contingent interest component that requires the Company to pay additional interest at a rate of two and one-half percent (2.5%) per quarter (10% per annum) (the “Additional Interest”) beginning on the date of issuance of this Note and ending on the maturity date, provided however, that such payment is only required if and only if the noteholder elects to convert the entire balance of the December 2021 Note into the Company’s common stock on or prior to maturity. As the contingent event is not based on creditworthiness, such feature is not clearly and closely related to the host instrument and accordingly must be bifurcated and recognized as a derivative liability and a debt discount on the December Note at its inception. The fair value of the contingent interest derivative liability was $415,000 at note inception (December 20, 2021). The fair value of the contingent interest derivative liability was $666,000 and $404,000 at June 30, 2024 and December 31, 2023, respectively, and is recognized as a derivative liability in the consolidated balance sheet. The change in the fair value of the derivative liability for three months ended June 30, 2024 and 2023 of $(21,000) and ($152,000), respectively was recorded to other expense/(income) for three months ended June 30, 2024 and 2023. The change in the fair value of the derivative liability for six months ended June 30, 2024 and 2023 of  $262,000 and $112,000, respectively was recorded to other expense/(income) for six months ended June 30, 2024 and 2023. The amortization of the original $415,000 debt discount of $26,000 and $26,000 was recorded as additional interest expense for three months ended June 30, 2024 and 2023, respectively. The amortization of the original $415,000 debt discount of $52,000 and $52,000 was recorded as additional interest expense for six months ended June 30, 2024 and 2023, respectively.



The Company’s contractual cash obligations related to the outstanding convertible notes payable is a repayment of the September 2021 Note of the $10,000,000 plus accrued interest on September 17, 2025 and a repayment of the December 2021 Note of the $10,000,000 plus accrued interest on December 30, 2025, unless converted at the option of the noteholder.
v3.24.2.u1
Fair Value of Financial Instruments
 6 Months Ended
Jun. 30, 2024
Fair Value of Financial Instruments [Abstract]  
Fair Value of Financial Instruments
4. Fair Value of Financial Instruments

The Company has certain financial assets and liabilities recorded at fair value. Fair values determined by Level 1 inputs utilize observable data such as quoted prices in active markets. Fair values determined by Level 2 inputs utilize data points other than quoted prices in active markets that are observable either directly or indirectly. Fair values determined by Level 3 inputs utilize unobservable data points in which there is little or no market data, which require the reporting entity to develop its own assumptions. The carrying amounts reflected in the consolidated balance sheets for cash equivalents, accounts payable and accrued expenses approximate their carrying value due to their short-term nature. There were no level 1 or 2 assets or liabilities at June 30, 2024 or December 31, 2023. See below for Fair Value of Derivatives related to Convertible Notes Payable at June 30, 2024 and December 31, 2023, which are level 3 liabilities.


Level 3 assets and liabilities measured and recorded at fair value on a recurring basis at June 30, 2024 and December 31, 2023 were as follows:

 
June 30,
2024
    
December 31,
2023
  
Derivative Liability – Contingent Interest April Note
 
$
789,000
    
$
431,000
  
Derivative Liability – Contingent Interest September Note   $ 309,000     $ 169,000  
Derivative Liability – Contingent Interest December Note   $ 666,000     $ 404,000  


The April Note derivative liability – contingent interest was valued using a Monte Carlo Geometric Brownian Stock Path Model. The key assumptions used in the model at June 30, 2024 and December 31, 2023 are as follows:
 

  
June 30,
2024
    
December 31,
2023
  
Stock Price
  
$
2.26
    
$
1.66
  
Conversion Price of conversion feature
  
$
5.00
    
$
5.00
  
Term
  
   0.79 years
   
1.29 years
  
Risk Free Interest Rate
    
5.23
%
    
4.79
%
Credit Adjusted Discount Rate
    
13.76
%
    
12.86
%
Volatility
    
70
%
    
69
%
Dividend Rate
    
0
 %
 		   
0
 %



The roll forward of the April Note derivative liability – contingent interest is as follows for the six months ended June 30, 2024 and 2023:

Balance – December 31, 2023
  
$
431,000
  
Fair Value Adjustment
    
358,000
  
Balance – June 30, 2024
  
$
789,000
  
         
Balance – December 31, 2022
 		  $
249,000  
Fair Value Adjustment     117,000
Balance – June 30, 2023
   $ 366,000  


The September Note derivative liability – contingent interest was valued using a Monte Carlo Geometric Brownian Stock Path Model. The key assumptions used in the model at June 30, 2024 and December 31, 2023 are as follows:

 
June 30,
2024
    
December 31,
2023
  
Stock Price
  
$
2.26
    
$
1.66
  
Conversion Price of conversion feature
  
$
8.64
    
$
8.64
  
Term
  
1.22 years
   
1.72 years
  
Risk Free Interest Rate
    
5.12
%
    
4.23
%
Credit Adjusted Discount Rate
    
13.76
%
    
12.86
%
Volatility
    
84
%
    
75
%
Dividend Rate
    
0
 %    
0
 %


The roll forward of the September Note derivative liability – contingent interest is as follows:

Balance – December 31, 2023
   $ 169,000  
Fair Value Adjustment
     140,000  
Balance – June 30, 2024
   $ 309,000  
         
Balance – December 31, 2022
     109,000  
Fair Value Adjustment     50,000
Balance – June 30, 2023   $ 159,000  


The December Note derivative liability – contingent interest was valued using a Monte Carlo Geometric Brownian Stock Path Model. The key assumptions used in the model at June 30, 2024 and December 31, 2023 are as follows:

   
June 30,
2024
    
December 31,
2023
  
Stock Price
  
$
2.26
    
$
1.66
  
Conversion Price of conversion feature
  
$
5.43
    
$
5.43
  
Term
   1.47 years
    
1.97 years
  
Risk Free Interest Rate
    
4.77
%
    
4.23
%
Credit Adjusted Discount Rate
    
13.76
%
    
12.86
%
Volatility
    
71
%
    
72
%
Dividend Rate
    
0
 %    
0
 %


The roll forward of the December Note derivative liability – contingent interest is as follows:

Balance – December 31, 2023
  
$
404,000
  
Fair Value Adjustment
    
262,000
  
Balance – June 30, 2024
  
$
666,000
  
         
Balance – December 31, 2022
   $ 215,000  
Fair Value Adjustment
    
112,000
Balance – June 30, 2023
  
$
327,000
  
v3.24.2.u1
Stock-Based Compensation
 6 Months Ended
Jun. 30, 2024
Stock-Based Compensation [Abstract]  
Stock-Based Compensation
5. Stock-Based Compensation



Following is the stock-based compensation expense related to common stock options, restricted common stock, common stock warrants and deferred stock units:
 
 
  
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
 
  
2024
    
2023
    
2024
    
2023
  
 
  
in thousands
  
Research and development
  
$
386
    
$
134
    
$
709
    
$
403
  
General and administrative
    
351
      
382
      
633
      
775
  
Total stock-based compensation expense
  
$
737
    
$
516
    
$
1,342
    
$
1,178
  



The following table summarizes the stock option activity in the Company’s equity incentive plans, including non-plan grants to Company executives, from December 31, 2023 through June 30, 2024:
 
 
  
Shares
    
Weighted
Average
Exercise Price
  
Outstanding, December 31, 2023
    
6,333,841
    
$
2.66
  
Granted
    
1,273,000
      
1.81
  
Exercised
     (49,583 )    
(1.22
)
Options forfeited/cancelled
    
(229,583
)
    
(8.53
)
Outstanding, June 30, 2024
    
7,369,758
    
$
2.33
  



As of June 30, 2024, there was $1,568,000 of unrecognized compensation related to 2,574,753 unvested options, which is expected to be recognized over a weighted–average period of approximately 1 year. The weighted-average grant date fair value for options granted during the six months ended June 30, 2024 was $1.23. The Company granted 1,273,000 stock options during the six months ended June 30, 2024.



The fair value of all other options granted is determined using the Black-Scholes option-pricing model. The following weighted average assumptions were used:
 
 
  
Six
Months Ended
  June 30,
    
Six
Months Ended
  June 30,
  
 
  
2024
    
2023
  
Risk-free interest rate
    
3.88
%
    
3.76
%
Expected life of the options
  
5.4 years
    
5.5 years
 
Expected volatility of the underlying stock
    
75
%
    
86
%
Expected dividend rate
    
0
 %    
0
 %


In January 2024, the Company’s board chairman elected to take restricted stock grants in lieu of cash retainers for 2024. A total of 23,256 shares of restricted stock valued at approximately $40,000 is being amortized to expense on a straight-line basis until December 31, 2024 when the stock vests in full. In January 2023, the Company’s board chairman elected to take restricted stock grants in lieu of cash retainers for 2023. A total of 36,036 shares of restricted stock valued at approximately $40,000 was being amortized to expense on a straight-line basis until December 31, 2023 when the stock vested in full.



During the six months ended June 30, 2024, the Company issued 408,000 restricted stock units to its employees valued at $734,000 at the date of grant. These restricted stock units will vest 100% if the Company publicly presents the results of the Interim Analysis of its NAVIGATE clinical trial on or before December 31, 2024. The Company believes that is probable that the vesting condition will be met and is amortizing the restricted stock unit expense ratably in 2024. The amount of expense recorded during the three and six months ended June 30, 2024 was $196,000 and $324,000 respectively.


In September 2020, the Company entered into an employment agreement with its new Chief Executive Officer whereby 20% of his base salary and performance bonuses will be paid in cash, and 80% will be paid in the form of deferred stock units (“DSUs”) through December 31, 2022 in accordance with the terms and subject to the provisions set forth in the DSU Agreement. DSUs credited to Mr. Lewis as of any date shall be fully vested and nonforfeitable at all times. Pursuant to an amendment to the DSU Agreement in July 2022, the Company shall issue the shares earned through December 31, 2022 underlying the outstanding whole number of DSUs credited to Mr. Lewis as follows: twenty five percent shall be issued on March 1, 2023, fifty percent shall be issued on March 1, 2024 and twenty five percent shall be issued on September 1, 2028. Additionally, a 2023 DSU Agreement was executed in July 2022, whereby Mr. Lewis would continue to receive 20% of salary in cash and 80% in DSUs through December 31, 2023. The shares under the 2023 DSU Agreement are to be issued fifty percent on March 1, 2025 and fifty percent on January 5, 2026.


For the three months ended March 31, 2023, approximately $112,000 of his compensation was recorded as stock compensation expense representing 72,440 shares of common stock to be issued under the DSU agreement with a weighted average grant date fair value of $1.55 per share.



On March 1, 2024, fifty percent of the DSU’s were issued to Mr. Lewis in accordance with the DSU Agreement. A total of 367,800 shares were due to be issued; however, 153,288 shares were withheld to cover income tax withholding of $300,445 resulting in 214,512 shares actually issued. On March 1, 2023, twenty five percent of the DSU’s were issued to Mr. Lewis in accordance with the DSU Agreement. A total of 183,900 shares were due to be issued; however, 75,529 shares were withheld to cover income tax withholding of $156,345 resulting in 108,371 shares actually issued.


Also, Mr. Lewis’ bonus for the year ended December 31, 2022 of $210,000 (which was included in accrued compensation at December 31, 2022) was approved in January 2023 and represents 143,836 shares of common stock to be issued under the DSU agreement with a grant date fair value of $1.46 per share. The $210,000 was reclassified from accrued compensation to additional paid in capital in January 2023.



There is no unrecognized compensation expense related to the DSUs.
v3.24.2.u1
Common Stock Warrants
 6 Months Ended
Jun. 30, 2024
Common Stock Warrants [Abstract]  
Common Stock Warrants
6. Common Stock Warrants


The following table summarizes the common stock warrant activity from December 31, 2023 through June 30, 2024:
 
 
  
Shares
    
Weighted Average
Exercise Price
  
Outstanding, December 31, 2023
    
9,256,493
    
$
4.22
  
Granted
    
400,000
      
3.49
  
Exercised
    
(125,093
)
    
3.00
  
Forfeited/cancelled
    
(104,547
)
    
4.49
  
Outstanding, June 30, 2024
    
9,426,853
    
$
4.20
  



The weighted average expiration of the warrants outstanding as of June 30, 2024 is 2.4 years.
v3.24.2.u1
Loss Per Share
 6 Months Ended
Jun. 30, 2024
Loss Per Share [Abstract]  
Loss Per Share
7. Loss Per Share


Basic net loss per common share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares and other potential common shares then outstanding. Potential common shares consist of common shares issuable upon the assumed exercise of in-the-money stock options and warrants and potential common shares related to the conversion of the preferred stock. The computation of diluted net loss per share does not assume the issuance of common shares that have an anti-dilutive effect on net loss per share.



Dilutive shares which could exist pursuant to the exercise of outstanding stock instruments and which were not included in the calculation because their affect would have been anti-dilutive are as follows:
 
 
  
June 30,
2024
   
June 30,
2023
  
    (shares)
     (shares)
  
Warrants to purchase shares of common stock
    
9,426,853
      
11,957,964
  
Options to purchase shares of common stock
    
7,369,758
      
6,286,757
  
Restricted stock units
    408,000       —  
Shares of common stock issuable upon conversion of convertible notes payable – related party
    
6,721,188
      
6,117,006
  
Shares of common stock issuable upon conversion of convertible line of credit – related party
     21,016,837       10,170,002  
Shares of common stock issuable upon conversion of preferred stock
    
499,174
      
503,340
  
 
    
45,441,810
      
35,035,069
  
v3.24.2.u1
Common Stock
 6 Months Ended
Jun. 30, 2024
Common Stock [Abstract]  
Common Stock
8. Common Stock

2020 At Market Issuance of Common Stock


On May 11, 2020, the Company entered into an At Market Issuance Sales Agreement (the “2020 At Market Agreement”) with a sales agent under which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $40.0 million from time to time through the sales agent. Sales of the Company’s common stock through the sales agent, if any, will be made by any method that is deemed an “at the market” offering as defined by the U.S. Securities and Exchange Commission. The Company will pay to the sales agent a commission rate equal to 3.0% of the gross proceeds from the sale of any shares of common stock sold through the sales agent under the 2020 At Market Agreement. During the six months ended June 30, 2024 and 2023, there were no issuances of shares of common stock under the 2020 At Market Agreement.


For each of the six months ended June 30, 2024 and 2023, the Company issued a total of 29,950 and 30,200 shares of common stock, respectively, for dividends on Series A and Series C Preferred Stock.
v3.24.2.u1
Convertible Line of Credit - Related Party
 6 Months Ended
Jun. 30, 2024
Line of Credit [Member]  
Debt Instrument [Line Items]  
Convertible Line of Credit - Related Party
9. Convertible Line of Credit – Related Party



On July 25, 2022, the Company and Richard E. Uihlein (the “Lender”) entered into a Line of Credit Letter Agreement (the “Credit Agreement”), pursuant to which the Lender shall provide the Company a line of credit of up to $60.0 million (the “Line of Credit”) to finance the Company’s working capital needs. The Company may draw upon the Line of Credit through July 31, 2024.

Each advance made pursuant to the Credit Agreement shall be evidenced by an unsecured, convertible promissory note (individually, a “Promissory Note,” and collectively, the “Promissory Notes”), and bear interest at the Applicable Federal Rate for short term loans, plus two (2%) percent. Principal and interest on the Promissory Notes are due on or before January 31, 2026. Only with the consent of the Lender, may the Promissory Notes be prepaid, in whole or in part, at any time without premium or penalty, but with interest on the amount or amounts prepaid.

At the election of Lender, the principal and accrued interest on Promissory Note(s) may be converted into the number of shares of the Company’s Common Stock equal to the amount of principal and accrued interest on such Promissory Note divided by the price equal to the closing price of the Common Stock on the date of such Promissory Note, but in no event less than $3.00 per share.

In connection with the Credit Agreement, the Company agreed to issue the Lender warrants to purchase up to an aggregate of 1,700,000 shares of the Company’s common stock, par value $0.001 per share (collectively, the “Warrants”). Upon execution of the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 500,000 shares of Company’s Common Stock at an exercise price of $5.00 per share, which Warrant is exercisable upon issuance. Further, pursuant to the Credit Agreement, the Company shall issue to the Lender additional Warrants to purchase up to the remaining 1,200,000 shares of the Company’s common stock, ratably, upon borrowings under the Credit Agreement, with exercise prices equal to 150% of the closing price of the Company’s common Stock on the date of the Promissory Note evidencing such draw, but in no event more than $10.00 per share nor less than $3.00 per share. The Warrants expire on July 31, 2029.

The fair value of the 500,000 warrants vested at closing on July 25, 2022 was $738,000 at the date of issuance based on the following assumptions: an expected life of 7 years, volatility of 92%, risk free interest rate of 3.19% and zero dividends. The fair value of the vested warrants was recorded in other assets (non-current) as a deferred financing cost and will be amortized on a straight-line basis from July 25, 2022 through January 31, 2026. Amortization for the three months ended June 30, 2024 and 2023 of $52,000 and $52,000, respectively, was recorded as interest expense. Amortization for the six months ended June 30, 2024 and 2023 of $104,000 and $104,000, respectively, was recorded as interest expense.

On December 19, 2022, the Company executed a $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 6.46% (Applicable Federal Rate for short term loans on date of draw of 4.46% plus 2%). The effective interest rate is approximately 7.1%. Accrued interest on this draw was $1,038,000 and $349,000 at June 30, 2024 and 2023, respectively. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.00 per share, which Warrant is exercisable upon issuance.

The fair value of the 200,000 warrants vested at closing on December 19, 2022 was $160,780 at the date of issuance based on the following assumptions: an expected life of 7 years, volatility of 91%, risk free interest rate of 4.06% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal to be amortized on a straight-line basis, which is not materially different than the effective interest method, from December 19, 2022 through January 31, 2026. Amortization for the six months ended June 30, 2024 and 2023 of $26,000 in each period and was recorded as interest expense. The fair value of warrants that vest in the future based on borrowings will be computed when those borrowings occur and amortized over the remaining period through January 31, 2026.



On March 31, 2023, the Company executed an additional $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 6.41% (Applicable Federal Rate for short term loans on date of draw of 4.41% plus 2%). The effective interest rate is approximately 7.1%. Accrued interest on this draw was $832,000 and $161,000 at June 30, 2024 and 2023, respectively. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.26 per share, which Warrant is exercisable upon issuance.


The fair value of the 200,000 warrants vested at closing on March 31, 2023 was $296,680 at the date of issuance based on the following assumptions: an expected life of 6.33 years, volatility of 88%, risk free interest rate of 3.94% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal to be amortized on a straight-line basis, which is not materially different than the effective interest method, from March 31, 2023 through January 31, 2026. Amortization for the six months ended June 30, 2024 and 2023 of $52,000 and $26,000, respectively, and was recorded as interest expense.


On June 30, 2023, the Company executed an additional $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 6.34% (Applicable Federal Rate for short term loans on date of draw of 4.34% plus 2%). The effective interest rate is approximately 7.1%. Accrued interest on this draw was $653,000 and $0 at June 30, 2024 and 2023, respectively. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.00 per share, which Warrant is exercisable upon issuance.


The fair value of the 200,000 warrants vested at closing on June 30, 2023 was $179,920 at the date of issuance based on the following assumptions: an expected life of 6.08 years, volatility of 85%, risk free interest rate of 3.59% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal amortized on a straight-line basis, which is not materially different than the effective interest method, from June 30, 2023 through January 31, 2026. Amortization for the six months ended June 30, 2024 and 2023 of $34,000 and $0, respectively, and was recorded as interest expense.



On December 29, 2023, the Company executed an additional $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 7.13% (Applicable Federal Rate for short term loans on date of draw of 5.13% plus 2%). The effective interest rate is approximately 7.5%. Accrued interest on this draw was $362,000 June 30, 2024. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.00 per share, which Warrant is exercisable upon issuance.



The fair value of the 200,000 warrants vested at closing on December 31, 2023 was $193,745 at the date of issuance based on the following assumptions: an expected life of 5.7 years, volatility of 79%, risk free interest rate of 4.49% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal amortized on a straight-line basis, which is not materially different than the effective interest method, from December 29, 2023 through January 31, 2026. Amortization for the six months ended June 30, 2024 of $47,000 and was recorded as interest expense.



On March 29, 2024, the Company executed an additional $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 6.62% (Applicable Federal Rate for short term loans on date of draw of 4.62% plus 2%). The effective interest rate is approximately 7.1%. Accrued interest on this draw was $166,000 June 30, 2024. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.59 per share, which Warrant is exercisable upon issuance.


The fair value of the 200,000 warrants vested at closing on March 29, 2024, was $277,389 at the date of issuance based on the following assumptions: an expected life of 5.33 years, volatility of 75%, risk free interest rate of 4.19% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal amortized on a straight-line basis, which is not materially different than the effective interest method, from March 29, 2024 through January 31, 2026. Amortization for the six months ended June 30, 2024 of $38,000 and was recorded as interest expense.



On June 28, 2024, the Company executed an additional $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 7.01% (Applicable Federal Rate for short term loans on date of draw of 5.01% plus 2%). The effective interest rate is approximately 7.4%.  The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.39 per share, which Warrant is exercisable upon issuance.



The fair value of the 200,000 warrants vested at closing on June 28, 2024, was $260,000 at the date of issuance based on the following assumptions: an expected life of 5.03 years, volatility of 77%, risk free interest rate of 4.29% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal amortized on a straight-line basis, which is not materially different than the effective interest method, from June 28, 2024 through January 31, 2026.



The fair value of warrants that vest in the future based on borrowings will be computed when those borrowings occur and amortized over the remaining period through January 31, 2026.
v3.24.2.u1
Supplemental Convertible Line of Credit - Related Party
 6 Months Ended
Jun. 30, 2024
Supplemental Convertible Line of Credit - Related Party [Abstract]  
Supplemental Convertible Line of Credit - Related Party
10. Supplemental Convertible Line of Credit – Related Party


On March 29, 2024, the Company and Richard E. Uihlein (the “Lender”) entered into a Supplemental Line of Credit Letter Agreement (the “Supplemental Credit Agreement”), pursuant to which the Lender shall provide the Company a line of credit of up to $10.0 million (the “Supplemental Line of Credit”) to finance the Company’s working capital needs. The Company may draw upon the Supplemental Line of Credit through March 31, 2025.



Each advance made pursuant to the Supplemental Credit Agreement shall be evidenced by an unsecured, convertible promissory note (individually, a “Promissory Note,” and collectively, the “Promissory Notes”), and bear interest at the Applicable Federal Rate for short term loans, plus two (2%) percent. Principal and interest on the Promissory Notes are due on or before March 31, 2026. Only with the consent of the Lender, may the Promissory Notes be prepaid, in whole or in part, at any time without premium or penalty, but with interest on the amount or amounts prepaid.


At the election of Lender, the principal and accrued interest on Promissory Note(s) may be converted into the number of shares of the Company’s Common Stock equal to the amount of principal and accrued interest on such Promissory Note divided by the price equal to the closing price of the Common Stock on the date of such Promissory Note, but in no event less than $3.00 per share.


In connection with the Supplemental Credit Agreement, the Company agreed to issue the Lender warrants to purchase up to an aggregate of 200,000 shares of the Company’s common stock, par value $0.001 per share (collectively, the “Warrants”). The Company shall issue to the Lender Warrants ratably, upon borrowings under the Supplemental Line of Credit, with exercise prices equal to 150% of the closing price of the Company’s common Stock on the date of the Promissory Note evidencing such draw, but in no event more than $10.00 per share nor less than $3.00 per share. The Warrants expire on July 31, 2029.
v3.24.2.u1
Commitments and Contingencies
 6 Months Ended
Jun. 30, 2024
Commitments and Contingencies [Abstract]  
Commitments and Contingencies
11. Commitments and Contingencies

Other Legal Proceedings


The Company records accruals for such contingencies to the extent that the Company concludes that their occurrence is probable, and the related damages are estimable. There are no significant pending legal proceedings.

Clinical Trial and Research Commitments


The Company has entered into agreements with contractors for research and development activities to further its product candidates. The contracts generally may be canceled at any time by providing thirty days’ notice.
v3.24.2.u1
Leases
 6 Months Ended
Jun. 30, 2024
Leases [Abstract]  
Leases
12. Leases


The Company has one operating lease for its office space which was amended effective March 1, 2022 for a term of 38 months with no residual value guarantees or material restrictive covenants. The amended lease provided for free rent for the first six and a half months of the lease and continues the security deposit of $6,000. In addition to base rental payments included in the contractual obligations table above, the Company is responsible for our pro-rata share of the operating expenses for the building. Our lease cost for the six-month periods ended June 30, 2024 and 2023 was approximately $26,000 for each period and is included in general and administrative expenses. As of June 30, 2024, the right to use lease asset consisted of $35,000 and is included in other assets. Also, at June 30, 2024, current lease liability of $44,000 is included in accrued expenses.



Maturity of operating lease as of June 30, 2024 in thousands:

2024
  

27
  
2025
     18  
Total
    
45
  
Less imputed interest
    
1
  
Present value of lease liability
  
$
44
  



The discount rate used in calculating the present value of the lease payments was 11%.
v3.24.2.u1
Galectin Sciences LLC
 6 Months Ended
Jun. 30, 2024
Galectin Sciences LLC [Abstract]  
Galectin Sciences LLC
13. Galectin Sciences LLC


In January 2014, we created Galectin Sciences, LLC (the “LLC” or “Investee”), a collaborative joint venture co-owned by SBH Sciences, Inc. (“SBH”), to research and develop small organic molecule inhibitors of galectin-3 for oral administration. The LLC was initially capitalized with a $400,000 cash investment to fund future research and development activities, which was provided by the Company, and specific in-process research and development (“IPR&D”) contributed by SBH. The estimated fair value of the IPR&D contributed by SBH, on the date of contribution, was $400,000. Initially, the Company and SBH each had a 50% equity ownership interest in the LLC, with neither party having control over the LLC. Accordingly, from inception through the fourth quarter of 2014, the Company accounted for its investment in the LLC using the equity method of accounting. Under the equity method of accounting, the Company’s investment was initially recorded at cost with subsequent adjustments to the carrying value to recognize additional investments in or distributions from the Investee, as well as the Company’s share of the Investee’s earnings, losses and/or changes in capital. The estimated fair value of the IPR&D contributed to the LLC was immediately expensed upon contribution as there was no alternative future use available at the point of contribution. The operating agreement provides that if either party does not desire to contribute its equal share of funding required after the initial capitalization, then the other party, providing all of the funding, will have its ownership share increased in proportion to the total amount contributed from inception. In the fourth quarter of 2014, after the LLC had expended the $400,000 in cash, SBH decided not to contribute its share of the funding required. Cumulatively, the Company has contributed a total of $4,013,000, including $233,000 for the six months ended June 30, 2024, for expenses of the LLC. Since the end of 2014, SBH has contributed $711,000 for expenses in the LLC. As of June 30, 2024, the Company’s ownership percentage in the LLC was 85%. The Company accounts for the interest in the LLC as a consolidated, less than wholly owned subsidiary. Because the LLC’s equity is immaterial, the value of the non-controlling interest is also deemed to be immaterial.
v3.24.2.u1
Insider Trading Arrangements
 3 Months Ended
Jun. 30, 2024
Insider Trading Arrangements [Line Items]  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.2.u1
Accrued Expenses and Other (Tables)
 6 Months Ended
Jun. 30, 2024
Accrued Expenses and Other [Abstract]  
Accrued Expenses

Accrued expenses consist of the following:
 
 
  
June 30,
2024
    
December 31,
 2023
  
 
  
(in thousands)
  
Legal and accounting fees
  
$
65
    
$
40
  
Accrued compensation
    
865
      
1,129
  
Lease liability
    
44
      
46
  
Accrued research and development costs and other
    
9,882
      
7,967
  
Total
  
$
10,856
    
$
9,182
  
v3.24.2.u1
Fair Value of Financial Instruments (Tables)
 6 Months Ended
Jun. 30, 2024
Fair Value of Financial Instruments [Abstract]  
Assets and Liabilities Measured and Recorded at Fair Value on Recurring Basis

Level 3 assets and liabilities measured and recorded at fair value on a recurring basis at June 30, 2024 and December 31, 2023 were as follows:

 
June 30,
2024
    
December 31,
2023
  
Derivative Liability – Contingent Interest April Note
 
$
789,000
    
$
431,000
  
Derivative Liability – Contingent Interest September Note   $ 309,000     $ 169,000  
Derivative Liability – Contingent Interest December Note   $ 666,000     $ 404,000  
April Note [Member]  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Key Assumptions Used in Model at Inception

The April Note derivative liability – contingent interest was valued using a Monte Carlo Geometric Brownian Stock Path Model. The key assumptions used in the model at June 30, 2024 and December 31, 2023 are as follows:
 

  
June 30,
2024
    
December 31,
2023
  
Stock Price
  
$
2.26
    
$
1.66
  
Conversion Price of conversion feature
  
$
5.00
    
$
5.00
  
Term
  
   0.79 years
   
1.29 years
  
Risk Free Interest Rate
    
5.23
%
    
4.79
%
Credit Adjusted Discount Rate
    
13.76
%
    
12.86
%
Volatility
    
70
%
    
69
%
Dividend Rate
    
0
 %
 		   
0
 %
Roll Forward of Derivative Liability - Contingent Interest

The roll forward of the April Note derivative liability – contingent interest is as follows for the six months ended June 30, 2024 and 2023:

Balance – December 31, 2023
  
$
431,000
  
Fair Value Adjustment
    
358,000
  
Balance – June 30, 2024
  
$
789,000
  
         
Balance – December 31, 2022
 		  $
249,000  
Fair Value Adjustment     117,000
Balance – June 30, 2023
   $ 366,000  
September Note [Member]  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Key Assumptions Used in Model at Inception

The September Note derivative liability – contingent interest was valued using a Monte Carlo Geometric Brownian Stock Path Model. The key assumptions used in the model at June 30, 2024 and December 31, 2023 are as follows:

 
June 30,
2024
    
December 31,
2023
  
Stock Price
  
$
2.26
    
$
1.66
  
Conversion Price of conversion feature
  
$
8.64
    
$
8.64
  
Term
  
1.22 years
   
1.72 years
  
Risk Free Interest Rate
    
5.12
%
    
4.23
%
Credit Adjusted Discount Rate
    
13.76
%
    
12.86
%
Volatility
    
84
%
    
75
%
Dividend Rate
    
0
 %    
0
 %
Roll Forward of Derivative Liability - Contingent Interest

The roll forward of the September Note derivative liability – contingent interest is as follows:

Balance – December 31, 2023
   $ 169,000  
Fair Value Adjustment
     140,000  
Balance – June 30, 2024
   $ 309,000  
         
Balance – December 31, 2022
     109,000  
Fair Value Adjustment     50,000
Balance – June 30, 2023   $ 159,000  
December Note [Member]  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Key Assumptions Used in Model at Inception

The December Note derivative liability – contingent interest was valued using a Monte Carlo Geometric Brownian Stock Path Model. The key assumptions used in the model at June 30, 2024 and December 31, 2023 are as follows:

   
June 30,
2024
    
December 31,
2023
  
Stock Price
  
$
2.26
    
$
1.66
  
Conversion Price of conversion feature
  
$
5.43
    
$
5.43
  
Term
   1.47 years
    
1.97 years
  
Risk Free Interest Rate
    
4.77
%
    
4.23
%
Credit Adjusted Discount Rate
    
13.76
%
    
12.86
%
Volatility
    
71
%
    
72
%
Dividend Rate
    
0
 %    
0
 %
Roll Forward of Derivative Liability - Contingent Interest

The roll forward of the December Note derivative liability – contingent interest is as follows:

Balance – December 31, 2023
  
$
404,000
  
Fair Value Adjustment
    
262,000
  
Balance – June 30, 2024
  
$
666,000
  
         
Balance – December 31, 2022
   $ 215,000  
Fair Value Adjustment
    
112,000
Balance – June 30, 2023
  
$
327,000
  
v3.24.2.u1
Stock-Based Compensation (Tables)
 6 Months Ended
Jun. 30, 2024
Stock-Based Compensation [Abstract]  
Components of Stock-Based Compensation Expense

Following is the stock-based compensation expense related to common stock options, restricted common stock, common stock warrants and deferred stock units:
 
 
  
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
 
  
2024
    
2023
    
2024
    
2023
  
 
  
in thousands
  
Research and development
  
$
386
    
$
134
    
$
709
    
$
403
  
General and administrative
    
351
      
382
      
633
      
775
  
Total stock-based compensation expense
  
$
737
    
$
516
    
$
1,342
    
$
1,178
  
Stock Option Activity

The following table summarizes the stock option activity in the Company’s equity incentive plans, including non-plan grants to Company executives, from December 31, 2023 through June 30, 2024:
 
 
  
Shares
    
Weighted
Average
Exercise Price
  
Outstanding, December 31, 2023
    
6,333,841
    
$
2.66
  
Granted
    
1,273,000
      
1.81
  
Exercised
     (49,583 )    
(1.22
)
Options forfeited/cancelled
    
(229,583
)
    
(8.53
)
Outstanding, June 30, 2024
    
7,369,758
    
$
2.33
  
Weighted Average Assumptions Used to Determine Fair Value of Options Granted

The fair value of all other options granted is determined using the Black-Scholes option-pricing model. The following weighted average assumptions were used:
 
 
  
Six
Months Ended
  June 30,
    
Six
Months Ended
  June 30,
  
 
  
2024
    
2023
  
Risk-free interest rate
    
3.88
%
    
3.76
%
Expected life of the options
  
5.4 years
    
5.5 years
 
Expected volatility of the underlying stock
    
75
%
    
86
%
Expected dividend rate
    
0
 %    
0
 %
v3.24.2.u1
Common Stock Warrants (Tables)
 6 Months Ended
Jun. 30, 2024
Common Stock Warrants [Abstract]  
Common Stock Warrant Activity

The following table summarizes the common stock warrant activity from December 31, 2023 through June 30, 2024:
 
 
  
Shares
    
Weighted Average
Exercise Price
  
Outstanding, December 31, 2023
    
9,256,493
    
$
4.22
  
Granted
    
400,000
      
3.49
  
Exercised
    
(125,093
)
    
3.00
  
Forfeited/cancelled
    
(104,547
)
    
4.49
  
Outstanding, June 30, 2024
    
9,426,853
    
$
4.20
  
v3.24.2.u1
Loss Per Share (Tables)
 6 Months Ended
Jun. 30, 2024
Loss Per Share [Abstract]  
Antidilutive Securities Excluded from Computation of Earnings Per Share

Dilutive shares which could exist pursuant to the exercise of outstanding stock instruments and which were not included in the calculation because their affect would have been anti-dilutive are as follows:
 
 
  
June 30,
2024
   
June 30,
2023
  
    (shares)
     (shares)
  
Warrants to purchase shares of common stock
    
9,426,853
      
11,957,964
  
Options to purchase shares of common stock
    
7,369,758
      
6,286,757
  
Restricted stock units
    408,000       —  
Shares of common stock issuable upon conversion of convertible notes payable – related party
    
6,721,188
      
6,117,006
  
Shares of common stock issuable upon conversion of convertible line of credit – related party
     21,016,837       10,170,002  
Shares of common stock issuable upon conversion of preferred stock
    
499,174
      
503,340
  
 
    
45,441,810
      
35,035,069
  
v3.24.2.u1
Leases (Tables)
 6 Months Ended
Jun. 30, 2024
Leases [Abstract]  
Maturity of Operating Lease

Maturity of operating lease as of June 30, 2024 in thousands:

2024
  

27
  
2025
     18  
Total
    
45
  
Less imputed interest
    
1
  
Present value of lease liability
  
$
44
  
v3.24.2.u1
Basis of Presentation, Liquidity and Going Concern (Details) - USD ($)
 6 Months Ended
May 14, 2024
Jul. 25, 2022
Apr. 16, 2021
Jun. 30, 2024
Mar. 29, 2024
Dec. 31, 2023
Basis of Presentation and Liquidity [Abstract]            
Cash and cash equivalents       $ 25,598,000   $ 25,660,000
Richard E. Uihlein [Member] | April 2021 Note [Member]            
Basis of Presentation and Liquidity [Abstract]            
Convertible note principal     $ 10,000,000      
Maturity date Apr. 16, 2025     Apr. 16, 2025    
Conversion price (in dollars per share) $ 5     $ 5    
Richard E. Uihlein [Member] | Line of Credit [Member]            
Basis of Presentation and Liquidity [Abstract]            
Line of credit   $ 60,000,000        
Maturity date   Jan. 31, 2026        
Richard E. Uihlein [Member] | Supplemental Line of Credit [Member]            
Basis of Presentation and Liquidity [Abstract]            
Line of credit         $ 10,000,000  
Maturity date       Mar. 31, 2026    
v3.24.2.u1
Accrued Expenses and Other (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Accrued Expenses and Other [Abstract]    
Legal and accounting fees $ 65,000 $ 40,000
Accrued compensation 865,000 1,129,000
Lease liability $ 44,000 $ 46,000
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] Total Total
Accrued research and development costs and other $ 9,882,000 $ 7,967,000
Total $ 10,856,000 $ 9,182,000
v3.24.2.u1
Convertible Notes Payable - Related Party (Details)
 3 Months Ended 6 Months Ended
Dec. 30, 2025
USD ($)
Sep. 17, 2025
USD ($)
May 14, 2024
$ / shares
shares
Dec. 20, 2021
USD ($)
PromissoryNote
$ / shares
Apr. 16, 2021
USD ($)
Jun. 30, 2024
USD ($)
$ / shares
Jun. 30, 2023
USD ($)
Jun. 30, 2024
USD ($)
$ / shares
Jun. 30, 2023
USD ($)
Dec. 31, 2023
USD ($)
Sep. 17, 2021
USD ($)
Convertible Notes Payable - Related Party [Abstract]                      
Fair value of derivative liability           $ 1,764,000   $ 1,764,000   $ 1,004,000  
Change in fair value of derivative           109,000 $ 489,000 (760,000) $ (279,000)    
April 2021 Note [Member]                      
Convertible Notes Payable - Related Party [Abstract]                      
Change in fair value of derivative           (89,000) (221,000) 358,000 117,000    
Amortization of debt discount           420,000   420,000      
Additional interest expense           $ 26,000 26,000 $ 52,000 52,000    
April 2021 Note [Member] | Richard E. Uihlein [Member]                      
Convertible Notes Payable - Related Party [Abstract]                      
Debt financing arrangement         $ 10,000,000            
Convertible note principal         $ 10,000,000            
Maturity date     Apr. 16, 2025         Apr. 16, 2025      
Conversion price (in dollars per share) | $ / shares     $ 5     $ 5   $ 5      
Common stock, shares issued (in shares) | shares     0                
Interest rate compounded annually           2.00%   2.00%      
Effective interest rate           3.00%   3.00%      
Accrued interest expense           $ 53,000 52,000 $ 104,000 102,000    
Additional interest rate per quarter         2.50%            
Additional interest rate per annum from issuance date to maturity date period         10.00%            
Fair value of derivative liability         $ 420,000 789,000   789,000   366,000  
September 2021 Note [Member]                      
Convertible Notes Payable - Related Party [Abstract]                      
Change in fair value of derivative           2,000 (116,000) 140,000 50,000    
Amortization of debt discount           433,000   433,000      
Additional interest expense           $ 27,000 27,000 $ 54,000 54,000    
September 2021 Note [Member] | Forecast [Member]                      
Convertible Notes Payable - Related Party [Abstract]                      
Convertible note payable repayment   $ 10,000,000                  
September 2021 Note [Member] | Richard E. Uihlein [Member]                      
Convertible Notes Payable - Related Party [Abstract]                      
Maturity date               Sep. 17, 2025      
Conversion price (in dollars per share) | $ / shares           $ 8.64   $ 8.64      
Interest rate compounded annually           2.00%   2.00%      
Effective interest rate           3.00%   3.00%      
Accrued interest expense           $ 52,000 51,000 $ 104,000 101,000    
Additional interest rate per quarter                     2.50%
Additional interest rate per annum from issuance date to maturity date period                     10.00%
Fair value of derivative liability           309,000   $ 309,000   169,000 $ 433,000
December 2021 Note [Member]                      
Convertible Notes Payable - Related Party [Abstract]                      
Convertible note principal       $ 10,000,000              
Maturity date               Dec. 20, 2025      
Number of promissory notes evidenced by loans agreement | PromissoryNote       2              
Conversion price (in dollars per share) | $ / shares       $ 5.43              
Interest rate compounded annually       2.00%              
Effective interest rate       3.00%              
Accrued interest expense           52,000 51,000 $ 104,000 101,000    
Additional interest rate per quarter       2.50%              
Additional interest rate per annum from issuance date to maturity date period       10.00%              
Fair value of derivative liability       $ 415,000   666,000   666,000   $ 404,000  
Change in fair value of derivative           (21,000) (152,000) 262,000 112,000    
Amortization of debt discount           415,000   415,000      
Additional interest expense           $ 26,000 $ 26,000 $ 52,000 $ 52,000    
December 2021 Note [Member] | Forecast [Member]                      
Convertible Notes Payable - Related Party [Abstract]                      
Convertible note payable repayment $ 10,000,000                    
v3.24.2.u1
Fair Value of Financial Instruments, Assets and Liabilities Measured at Fair Value (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Jun. 30, 2023
Dec. 31, 2022
Assets and Liabilities Measured at Fair Value [Abstract]        
Derivative Liability - Contingent Interest $ 1,764,000 $ 1,004,000    
April Note [Member]        
Assets and Liabilities Measured at Fair Value [Abstract]        
Derivative Liability - Contingent Interest 789,000 431,000 $ 366,000 $ 249,000
September Note [Member]        
Assets and Liabilities Measured at Fair Value [Abstract]        
Derivative Liability - Contingent Interest 309,000 169,000 159,000 109,000
December Note [Member]        
Assets and Liabilities Measured at Fair Value [Abstract]        
Derivative Liability - Contingent Interest 666,000 404,000 $ 327,000 $ 215,000
Recurring [Member] | Level 1 [Member]        
Assets and Liabilities Measured at Fair Value [Abstract]        
Assets 0 0    
Liabilities 0 0    
Recurring [Member] | Level 2 [Member]        
Assets and Liabilities Measured at Fair Value [Abstract]        
Assets 0 0    
Liabilities 0 0    
Recurring [Member] | April Note [Member] | Level 3 [Member]        
Assets and Liabilities Measured at Fair Value [Abstract]        
Derivative Liability - Contingent Interest 789,000 431,000    
Recurring [Member] | September Note [Member] | Level 3 [Member]        
Assets and Liabilities Measured at Fair Value [Abstract]        
Derivative Liability - Contingent Interest 309,000 169,000    
Recurring [Member] | December Note [Member] | Level 3 [Member]        
Assets and Liabilities Measured at Fair Value [Abstract]        
Derivative Liability - Contingent Interest $ 666,000 $ 404,000    
v3.24.2.u1
Fair Value of Financial Instruments, Key Assumptions (Details)
 6 Months Ended 12 Months Ended
Jun. 30, 2024
Dec. 31, 2023
Stock Price [Member] | April Note [Member]    
Key Assumptions [Abstract]    
Derivative liability, measurement input 2.26 1.66
Stock Price [Member] | September Note [Member]    
Key Assumptions [Abstract]    
Derivative liability, measurement input 2.26 1.66
Stock Price [Member] | December Note [Member]    
Key Assumptions [Abstract]    
Derivative liability, measurement input 2.26 1.66
Conversion Price of Conversion Feature [Member] | April Note [Member]    
Key Assumptions [Abstract]    
Derivative liability, measurement input 5 5
Conversion Price of Conversion Feature [Member] | September Note [Member]    
Key Assumptions [Abstract]    
Derivative liability, measurement input 8.64 8.64
Conversion Price of Conversion Feature [Member] | December Note [Member]    
Key Assumptions [Abstract]    
Derivative liability, measurement input 5.43 5.43
Term [Member] | April Note [Member]    
Key Assumptions [Abstract]    
Term 9 months 14 days 1 year 3 months 14 days
Term [Member] | September Note [Member]    
Key Assumptions [Abstract]    
Term 1 year 2 months 19 days 1 year 8 months 19 days
Term [Member] | December Note [Member]    
Key Assumptions [Abstract]    
Term 1 year 5 months 19 days 1 year 11 months 19 days
Risk Free Interest Rate [Member] | April Note [Member]    
Key Assumptions [Abstract]    
Derivative liability, measurement input 0.0523 0.0479
Risk Free Interest Rate [Member] | September Note [Member]    
Key Assumptions [Abstract]    
Derivative liability, measurement input 0.0512 0.0423
Risk Free Interest Rate [Member] | December Note [Member]    
Key Assumptions [Abstract]    
Derivative liability, measurement input 0.0477 0.0423
Credit Adjusted Discount Rate [Member] | April Note [Member]    
Key Assumptions [Abstract]    
Derivative liability, measurement input 0.1376 0.1286
Credit Adjusted Discount Rate [Member] | September Note [Member]    
Key Assumptions [Abstract]    
Derivative liability, measurement input 0.1376 0.1286
Credit Adjusted Discount Rate [Member] | December Note [Member]    
Key Assumptions [Abstract]    
Derivative liability, measurement input 0.1376 0.1286
Volatility [Member] | April Note [Member]    
Key Assumptions [Abstract]    
Derivative liability, measurement input 0.70 0.69
Volatility [Member] | September Note [Member]    
Key Assumptions [Abstract]    
Derivative liability, measurement input 0.84 0.75
Volatility [Member] | December Note [Member]    
Key Assumptions [Abstract]    
Derivative liability, measurement input 0.71 0.72
Dividend Rate [Member] | April Note [Member]    
Key Assumptions [Abstract]    
Derivative liability, measurement input 0 0
Dividend Rate [Member] | September Note [Member]    
Key Assumptions [Abstract]    
Derivative liability, measurement input 0 0
Dividend Rate [Member] | December Note [Member]    
Key Assumptions [Abstract]    
Derivative liability, measurement input 0 0
v3.24.2.u1
Fair Value of Financial Instruments, Roll Forward of Derivative Liability (Details) - USD ($)
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Roll Forward of Derivative Liability [Roll Forward]    
Balance $ 1,004,000  
Fair Value Adjustment 760,000 $ 279,000
Balance 1,764,000  
April Note [Member]    
Roll Forward of Derivative Liability [Roll Forward]    
Balance 431,000 249,000
Fair Value Adjustment 358,000 117,000
Balance 789,000 366,000
September Note [Member]    
Roll Forward of Derivative Liability [Roll Forward]    
Balance 169,000 109,000
Fair Value Adjustment 140,000 50,000
Balance 309,000 159,000
December Note [Member]    
Roll Forward of Derivative Liability [Roll Forward]    
Balance 404,000 215,000
Fair Value Adjustment 262,000 112,000
Balance $ 666,000 $ 327,000
v3.24.2.u1
Stock-Based Compensation, Components of Stock-Based Compensation Expense (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Stock-Based Compensation Expense [Abstract]        
Total stock-based compensation expense $ 737 $ 516 $ 1,342 $ 1,178
Research and Development [Member]        
Stock-Based Compensation Expense [Abstract]        
Total stock-based compensation expense 386 134 709 403
General and Administrative [Member]        
Stock-Based Compensation Expense [Abstract]        
Total stock-based compensation expense $ 351 $ 382 $ 633 $ 775
v3.24.2.u1
Stock-Based Compensation, Stock Option Activity (Details) - USD ($)
 6 Months Ended
Jun. 30, 2024
Stock Option Activity [Roll Forward]  
Outstanding at beginning of period (in shares) 6,333,841
Granted (in shares) 1,273,000
Exercised (in shares) (49,583)
Forfeited/cancelled (in shares) (229,583)
Outstanding at end of period (in shares) 7,369,758
Weighted Average Exercise Price [Abstract]  
Outstanding at beginning of period (in dollars per share) $ 2.66
Granted (in dollars per share) 1.81
Exercised (in dollars per share) (1.22)
Forfeited/cancelled (in dollars per share) (8.53)
Outstanding at beginning of period (in dollars per share) $ 2.33
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized [Abstract]  
Unrecognized compensation cost $ 1,568,000
Unvested options (in shares) 2,574,753
Unrecognized compensation cost, recognition period 1 year
Weighted-average grant-date fair value of options granted (in dollars per share) $ 1.23
v3.24.2.u1
Stock-Based Compensation, Weighted Average Assumptions Used to Determine Fair Value of Options Granted (Details)
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Weighted Average Assumptions for Stock Options Granted [Abstract]    
Risk-free interest rate 3.88% 3.76%
Expected life of the options 5 years 4 months 24 days 5 years 6 months
Expected volatility of the underlying stock 75.00% 86.00%
Expected dividend rate 0.00% 0.00%
v3.24.2.u1
Stock-Based Compensation, Restricted Stock Grants and Employment Agreement (Details) - USD ($)
 1 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended
Jan. 31, 2024
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Dec. 31, 2022
Restricted Stock Grants [Abstract]              
Amortized expense   $ 737,000 $ 516,000 $ 1,342,000 $ 1,178,000    
Vesting percentage of Restricted Stock Units   100.00%          
Unrecognized compensation cost   $ 1,568,000   1,568,000      
Restricted Stock [Member]              
Restricted Stock Grants [Abstract]              
Restricted stock awards granted (in shares) 23,256 408,000       36,036  
Amortized expense $ 40,000 $ 196,000   324,000   $ 40,000  
Restricted stock units valued at grant   734,000          
Chief Executive Officer [Member]              
Restricted Stock Grants [Abstract]              
Stock based compensation expense     $ 112,000        
Unrecognized compensation cost   $ 0   $ 0      
Chief Executive Officer [Member] | Deferred Bonus [Member]              
Restricted Stock Grants [Abstract]              
Percentage of base salary paid in cash           20.00% 20.00%
Percentage of base salary paid in deferred stock units           80.00% 80.00%
Percentage of DSUs shall be credited on March 1, 2023             25.00%
Percentage of DSUs shall be credited on March 1, 2024   50.00% 25.00% 50.00% 25.00%   50.00%
Percentage of DSUs shall be credited on September 1, 2028             25.00%
Percentage of DSUs shall be credited on March 1, 2025           50.00%  
Percentage of DSUs shall be credited on January 5, 2026           50.00%  
Stock based compensation expense             $ 210,000
Common stock reserved for future issuance (in shares)         72,440   143,836
Common Stock Weighted average Grant Date fair Value (in dollars per share)         $ 1.55   $ 1.46
Shares unissued (in shares)   367,800 183,900 367,800 183,900    
Shares withheld to cover income tax withholding (in shares)   153,288 75,529        
Income tax payment withholding   $ 300,445 $ 156,345        
Shares issued (in shares)   214,512 108,371        
Reclassification of accrued compensation to additional paid in capital       $ 210,000      
v3.24.2.u1
Common Stock Warrants, Common Stock Warrant Activity (Details) - $ / shares
 6 Months Ended
Jun. 30, 2024
Weighted Average Exercise Price [Abstract]  
Weighted average expiration term of warrants outstanding 2 years 4 months 24 days
Warrants [Member]  
Common Stock Warrants shares [Roll Forward]  
Outstanding at beginning of period (in shares) 9,256,493
Granted (in shares) 400,000
Exercised (in shares) (125,093)
Forfeited/cancelled (in shares) (104,547)
Outstanding at end of period (in shares) 9,426,853
Weighted Average Exercise Price [Abstract]  
Outstanding at beginning of period (in dollars per share) $ 4.22
Granted (in dollars per share) 3.49
Exercised (in dollars per share) 3
Forfeited/cancelled (in dollars per share) 4.49
Outstanding at end of period (in dollars per share) $ 4.2
v3.24.2.u1
Loss Per Share (Details) - shares
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Abstract]    
Amount excluded from calculation (in shares) 45,441,810 35,035,069
Warrants [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Abstract]    
Amount excluded from calculation (in shares) 9,426,853 11,957,964
Stock Options [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Abstract]    
Amount excluded from calculation (in shares) 7,369,758 6,286,757
Restricted Stock Units [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Abstract]    
Amount excluded from calculation (in shares) 408,000 0
Convertible Note Payable [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Abstract]    
Amount excluded from calculation (in shares) 6,721,188 6,117,006
Line of Credit [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Abstract]    
Amount excluded from calculation (in shares) 21,016,837 10,170,002
Convertible Preferred Stock [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Abstract]    
Amount excluded from calculation (in shares) 499,174 503,340
v3.24.2.u1
Common Stock (Details) - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Common Stock [Abstract]      
Issuance of common stock (in shares) 62,278,125   61,852,914
2020 Market Agreement [Member]      
Common Stock [Abstract]      
Aggregate offering price $ 40.0    
Percentage of commission rate to be paid to sales agent 3.00%    
Issuance of common stock (in shares) 0 0  
2020 Market Agreement [Member] | Series A and Series C Preferred Stock [Member]      
Common Stock [Abstract]      
Common stock issued for dividends (in shares) 29,950 30,200  
v3.24.2.u1
Convertible Line of Credit - Related Party (Details) - USD ($)
 3 Months Ended 6 Months Ended 12 Months Ended
Jun. 28, 2024
Mar. 29, 2024
Dec. 29, 2023
Dec. 19, 2022
Jul. 25, 2022
Jun. 30, 2024
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Convertible Line of Credit - Related Party [Abstract]                      
Proceeds from lines of credit                 $ 20,000,000 $ 20,000,000  
Common stock, par value (in dollars per share)           $ 0.001     $ 0.001   $ 0.001
Expected life                 5 years 4 months 24 days 5 years 6 months  
Expected volatility                 75.00% 86.00%  
Risk free interest rate                 3.88% 3.76%  
Expected dividend                 0.00% 0.00%  
Warrants [Member]                      
Convertible Line of Credit - Related Party [Abstract]                      
Warrants issuance value         $ 738,000            
Expected life                 7 years    
Expected volatility                 92.00%    
Risk free interest rate                 3.19%    
Expected dividend                 0.00%    
Amortization of interest expense           $ 52,000 $ 52,000   $ 104,000 $ 104,000  
Warrant One [Member]                      
Convertible Line of Credit - Related Party [Abstract]                      
Warrants issuance value       $ 160,780              
Expected life                 7 years    
Expected volatility                 91.00%    
Risk free interest rate                 4.06%    
Expected dividend                 0.00%    
Amortization of interest expense                 $ 26,000 26,000  
Warrant Two [Member]                      
Convertible Line of Credit - Related Party [Abstract]                      
Warrants issuance value $ 260,000 $ 277,389         $ 179,920 $ 296,680     $ 193,745
Expected life 5 years 10 days 5 years 3 months 29 days         6 years 29 days 6 years 3 months 29 days     5 years 8 months 12 days
Expected volatility 77.00% 75.00%         85.00% 88.00%     79.00%
Risk free interest rate 4.29% 4.19%         3.59% 3.94%     4.49%
Expected dividend 0.00% 0.00%         0.00% 0.00%     0.00%
Amortization of interest expense                 52,000 26,000  
Warrant Three [Member]                      
Convertible Line of Credit - Related Party [Abstract]                      
Amortization of interest expense                 34,000 $ 0  
Warrant Four [Member]                      
Convertible Line of Credit - Related Party [Abstract]                      
Amortization of interest expense                 47,000    
Warrant Five [Member]                      
Convertible Line of Credit - Related Party [Abstract]                      
Amortization of interest expense                 $ 38,000    
Richard E. Uihlein [Member]                      
Convertible Line of Credit - Related Party [Abstract]                      
Common stock, par value (in dollars per share)         $ 0.001            
Percentage of warrants equal to the closing price of common stock         150.00%            
Warrants expiry date           Jul. 31, 2029     Jul. 31, 2029    
Richard E. Uihlein [Member] | Warrants [Member]                      
Convertible Line of Credit - Related Party [Abstract]                      
Exercise price of warrant (in dollars per share)         $ 5            
Richard E. Uihlein [Member] | Warrant One [Member]                      
Convertible Line of Credit - Related Party [Abstract]                      
Exercise price of warrant (in dollars per share) $ 3.39 $ 3.59 $ 3 $ 3     $ 3 $ 3.26   $ 3  
Richard E. Uihlein [Member] | Line of Credit [Member]                      
Convertible Line of Credit - Related Party [Abstract]                      
Line of credit         $ 60,000,000            
Additional short term borrowing interest rate 2.00% 2.00% 2.00%   2.00%            
Borrowings repayment due date         Jan. 31, 2026            
Share price (in dollars per share) $ 3 $ 3 $ 3                
Proceeds from lines of credit $ 10,000,000 $ 10,000,000 $ 10,000,000                
Interest rate on short term loans 7.01% 6.62% 7.13%                
Short term borrowing interest rate 5.01% 4.62% 5.13%                
Short term borrowing effective interest rate 7.40% 7.10% 7.50%                
Richard E. Uihlein [Member] | Line of Credit [Member] | December 2022 Promissory Note [Member]                      
Convertible Line of Credit - Related Party [Abstract]                      
Additional short term borrowing interest rate       2.00%              
Share price (in dollars per share)           $ 3     $ 3    
Proceeds from lines of credit       $ 10,000,000              
Interest rate on short term loans       6.46%              
Short term borrowing interest rate       4.46%              
Short term borrowing effective interest rate       7.10%              
Accrued interest           $ 1,038,000 $ 349,000   $ 1,038,000 $ 349,000  
Richard E. Uihlein [Member] | Line of Credit [Member] | March 2023 Promissory Note [Member]                      
Convertible Line of Credit - Related Party [Abstract]                      
Additional short term borrowing interest rate               2.00%      
Share price (in dollars per share)               $ 3      
Proceeds from lines of credit               $ 10,000,000      
Interest rate on short term loans               6.41%      
Short term borrowing interest rate               4.41%      
Short term borrowing effective interest rate               7.10%      
Accrued interest           832,000 $ 161,000   832,000 $ 161,000  
Richard E. Uihlein [Member] | Line of Credit [Member] | June 2023 Promissory Note [Member]                      
Convertible Line of Credit - Related Party [Abstract]                      
Additional short term borrowing interest rate             2.00%        
Share price (in dollars per share)             $ 3     $ 3  
Proceeds from lines of credit             $ 10,000,000        
Interest rate on short term loans             6.34%        
Short term borrowing interest rate             4.34%     4.34%  
Short term borrowing effective interest rate             7.10%     7.10%  
Accrued interest           653,000 $ 0   653,000 $ 0  
Richard E. Uihlein [Member] | Line of Credit [Member] | December 2023 Promissory Note [Member]                      
Convertible Line of Credit - Related Party [Abstract]                      
Accrued interest           362,000     362,000    
Richard E. Uihlein [Member] | Line of Credit [Member] | March 2024 Promissory Note [Member]                      
Convertible Line of Credit - Related Party [Abstract]                      
Accrued interest           $ 166,000     $ 166,000    
Richard E. Uihlein [Member] | Line of Credit [Member] | Minimum [Member]                      
Convertible Line of Credit - Related Party [Abstract]                      
Share price (in dollars per share)         $ 3            
Richard E. Uihlein [Member] | Line of Credit [Member] | Maximum [Member]                      
Convertible Line of Credit - Related Party [Abstract]                      
Share price (in dollars per share)         $ 10            
Common Stock [Member] | Richard E. Uihlein [Member]                      
Convertible Line of Credit - Related Party [Abstract]                      
Warrants to purchase common stock (in shares)         1,700,000            
Common stock, par value (in dollars per share)           $ 0.001     $ 0.001    
Common Stock [Member] | Richard E. Uihlein [Member] | Maximum [Member]                      
Convertible Line of Credit - Related Party [Abstract]                      
Warrants to purchase common stock (in shares) 200,000 200,000 200,000 200,000 500,000 200,000 200,000 200,000 200,000 200,000  
Warrants to purchase additional common stock (in shares)         1,200,000            
v3.24.2.u1
Supplemental Convertible Line of Credit - Related Party (Details) - USD ($)
$ / shares in Units, $ in Millions
 6 Months Ended
Mar. 29, 2024
Jun. 30, 2024
Jun. 28, 2024
Dec. 31, 2023
Dec. 29, 2023
Jun. 30, 2023
Mar. 31, 2023
Dec. 19, 2022
Jul. 25, 2022
Convertible Line of Credit - Related Party [Abstract]                  
Common stock, par value (in dollars per share)   $ 0.001   $ 0.001          
Richard E. Uihlein [Member]                  
Convertible Line of Credit - Related Party [Abstract]                  
Common stock, par value (in dollars per share)                 $ 0.001
Percentage of warrants equal to the closing price of common stock                 150.00%
Warrants expiry date   Jul. 31, 2029              
Richard E. Uihlein [Member] | Supplemental Line of Credit [Member]                  
Convertible Line of Credit - Related Party [Abstract]                  
Line of credit $ 10.0                
Additional short term borrowing interest rate 2.00%                
Promissory Note, maturity date   Mar. 31, 2026              
Percentage of warrants equal to the closing price of common stock   150.00%              
Warrants expiry date   Jul. 31, 2029              
Richard E. Uihlein [Member] | Supplemental Line of Credit [Member] | Minimum [Member]                  
Convertible Line of Credit - Related Party [Abstract]                  
Share price (in dollars per share)   $ 3              
Richard E. Uihlein [Member] | Supplemental Line of Credit [Member] | Maximum [Member]                  
Convertible Line of Credit - Related Party [Abstract]                  
Share price (in dollars per share)   10              
Common Stock [Member] | Richard E. Uihlein [Member]                  
Convertible Line of Credit - Related Party [Abstract]                  
Warrants to purchase common stock (in shares)                 1,700,000
Common stock, par value (in dollars per share)   $ 0.001              
Common Stock [Member] | Richard E. Uihlein [Member] | Maximum [Member]                  
Convertible Line of Credit - Related Party [Abstract]                  
Warrants to purchase common stock (in shares) 200,000 200,000 200,000   200,000 200,000 200,000 200,000 500,000
v3.24.2.u1
Commitments and Contingencies (Details)
 6 Months Ended
Jun. 30, 2024
Commitments and Contingencies [Abstract]  
Contract cancelation notice period 30 days
v3.24.2.u1
Leases (Details)
 6 Months Ended
Jun. 30, 2024
USD ($)
Lease
Jun. 30, 2023
USD ($)
Dec. 31, 2023
USD ($)
Lease Commitments [Abstract]      
Number of operating leases | Lease 1    
Term of contract 38 months    
Free rent period 6 months 15 days    
Security deposit $ 6,000    
Right to use lease asset $ 35,000    
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] Other assets    
Current lease liability $ 44,000   $ 46,000
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] Accrued Liabilities, Current   Accrued Liabilities, Current
Maturity of Operating Lease [Abstract]      
2024 $ 27,000    
2025 18,000    
Total 45,000    
Less imputed interest 1,000    
Present value of lease liability $ 44,000    
Discount rate on present value of lease payments 11.00%    
General and Administrative Expense [Member]      
Lease Commitments [Abstract]      
Lease cost $ 26,000 $ 26,000  
v3.24.2.u1
Galectin Sciences LLC (Details) - USD ($)
 1 Months Ended 3 Months Ended 6 Months Ended 114 Months Ended 126 Months Ended
Jan. 31, 2014
Dec. 31, 2014
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2024
Investments in and Advances to Affiliates, Schedule of Investments [Abstract]            
Amount expanded in cash     $ (62,000) $ (626,000)    
Galectin Sciences, LLC [Member]            
Investments in and Advances to Affiliates, Schedule of Investments [Abstract]            
Initial cash investment $ 400,000          
Equity ownership percentage     85.00%   85.00% 85.00%
Amount expanded in cash   $ 400,000        
Contribution for expenses     $ 233,000     $ 4,013,000
Galectin Sciences, LLC [Member] | SBH [Member]            
Investments in and Advances to Affiliates, Schedule of Investments [Abstract]            
Equity ownership percentage 50.00%          
Contribution for expenses         $ 711,000  
Galectin Sciences, LLC [Member] | SBH [Member] | IPR&D [Member]            
Investments in and Advances to Affiliates, Schedule of Investments [Abstract]            
Estimated fair value of asset contributed to joint venture $ 400,000          
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