8-K
GALECTIN THERAPEUTICS INC NASDAQ false 0001133416 0001133416 2021-09-17 2021-09-17

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): September 17, 2021

 

 

GALECTIN THERAPEUTICS INC.

(Exact name of registrant as specified in its charter)

 

 

 

Nevada   001-31791   04-3562325

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

4960 PEACHTREE INDUSTRIAL BOULEVARD, STE 240

NORCROSS, GA 30071

(Address of principal executive office) (zip code)

Registrant’s telephone number, including area code: (678) 620-3186

N/A

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol

 

Name of each exchange

on which registered

Common Stock $0.001 par value per share   GALT   The Nasdaq Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

 

 

 


Item 1.01 Entry into a Material Definitive Agreement.

On September 17, 2021, Galectin Therapeutics Inc. (the “Company”) and Richard E. Uihlein entered into a loan agreement in the aggregate of twenty million dollars ($20,000,000) (the “Loan Agreement”) to be funded in two closings and evidenced by two separate unsecured convertible promissory notes. The first of the two promissory notes was also executed and delivered on September 17, 2021, (the “September 2021 Note”) to evidence the first loan in the principal amount of ten million dollars. The second closing under the Loan Agreement for the remaining ten million dollars will occur on or before December 17, 2021.

The September 2021 Note has a maturity date of September 17, 2025 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, which is 228% of the closing price of our stock on September 16, 2021. The September 2021 Note bears interest at the rate of two percent (2%) per annum, compounded annually, and accrues additional interest at a rate of two and one-half percent (2.5%) per quarter (the “Additional Interest”) beginning on the date of issuance of the September 2021 Note and ending on the maturity date; provided however, that such Additional Interest is payable if and only if the noteholder elects to convert the entire balance of the September 2021 Note into the Company’s common stock.

The terms of the second note will be the same as the terms provided under the September 2021 Note except that the conversion price will be the greater of 228% of the closing price of our common stock the day prior to the second closing or $5.00, whichever is greater.

Under the terms of the Loan Agreement, the Line of Credit Letter Agreement (the “Line of Credit”) for $10 million between the Company and Richard E. Uihlein, dated December 19, 2017, and most recently amended on January 11, 2019, which by its terms would otherwise expire on December 31, 2021, will be terminated upon closing of the second $10 million unsecured convertible loan in December 2021. Currently there are no borrowings under the Line of Credit.

The foregoing description of the Loan Agreement and September 2021 Note do not purport to be complete and the terms of the Loan Agreement and September 2021 Note are subject to, and qualified in their entirety by reference to the Loan Agreement and September 2021 Note, which are filed herewith as Exhibit 10.1 and Exhibit 10.2, respectively, and are incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of Registrant.

The information contained in Item 1.01 above is incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities.

The information contained in Item 1.01 above is incorporated herein by reference.

The sale and issuance of the Note as disclosed in Item 1.01 of this Current Report on Form 8-K has been determined to be exempt from registration under the Act in reliance on Section 4(2) of the Act and Rule 506 of Regulation D promulgated under the Act.

 

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Item 8.01 Other Items.

On September 21, 2021, Galectin Therapeutics Inc. (the “Company) issued the press release attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

 

Exhibit No.

    
10.1    Loan Agreement, dated September 17, 2021
10.2    Unsecured Convertible Promissory Note, dated September 17, 2021
99.1    Press release, dated September 21, 2021
104    Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Galectin Therapeutics Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  GALECTIN THERAPEUTICS INC.
Date: September 21, 2021   By:  

/s/ Jack W. Callicutt

    Jack W. Callicutt
    Chief Financial Officer

 

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EX-10.1

Exhibit 10.1

LOAN AGREEMENT

THIS LOAN AGREEMENT is dated as of September 17, 2021 (the “Agreement”) by and between GALECTIN THERAPEUTICS, INC., a Nevada corporation (“Borrower”) and RICHARD E. UIHLEIN (the “Lender”).

PRELIMINARY STATEMENTS

WHEREAS, on April 16, 2021, Lender loaned Borrower the principal amount of ten million dollars ($10,000,000), as evidenced by that certain convertible promissory note dated, April 16, 2021.

WHEREAS, Lender and Borrower desire to enter into this Agreement in connection with a loan in aggregate of twenty million dollars ($20,000,000) to be funded in two closings and evidenced by two separate unsecured convertible promissory notes on terms described herein and in such unsecured convertible promissory notes.

WHEREAS, in connection with the loan contemplated herein and subject to the conditions set forth herein, Lender and Borrower desire to early terminate that certain Line of Credit Letter Agreement (the “Line of Credit”) between the Lender and Borrower, dated December 19, 2017, and most recently amended on January 11, 2019, which on its terms would otherwise expire on December 31, 2021.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the parties hereto hereby agree as follows:

SECTION 1

DEFINITIONS

1.1    Defined Terms.

In addition to the terms defined elsewhere in this Agreement, the following terms shall have the following meanings, unless the context otherwise clearly requires:

Applicable Law” means, in any jurisdiction, (i) all applicable common law and principles of equity and (ii) all applicable provisions of all (A) constitutions, statutes, codes, rules, regulations and orders of governmental bodies, (B) governmental approvals and (C) orders, decisions, judgments and decrees of all courts and arbitrators.

Business Day(s)” mean any day, except for Saturday, or Sunday and any day which is a legal holiday in Atlanta, Georgia or New York, New York or is a day on which banks in either such state are required to close.

Common Stock” means the common stock of the Borrower, $0.001 par value per share.

Loan Documents” shall mean this Agreement and the Notes executed in connection with any of the transactions contemplated by this Agreement.


Material Adverse Effect” means (a) a material adverse effect upon the business, operations, properties, assets, prospects, or condition (financial or otherwise) of Borrower, or (b) the material impairment of the ability of Borrower to materially perform its obligations under this Agreement.

Obligations” shall mean, collectively, (i) any amounts owing under the Notes and (ii) all liabilities and other obligations of payment and performance under the Loan Documents.

1.2    Other Definitional Provisions.

Pronouns, Sections and Articles. As used in this Agreement a neuter pronoun shall be deemed to include references to the masculine and feminine variations thereof, and vice versa, and a singular pronoun shall be deemed to include a reference to the plural variation thereof, and vice versa, in each case as the context may permit or require. Any reference to an “Article”, “Section”, or “Exhibit” shall mean, respectively, the appropriate Article, Section or Exhibit of this Agreement unless there is a specific reference to an article, section, or exhibit of another document or instrument.

Accounting Terms. Accounting terms to the extent not otherwise defined shall have the respective meanings given them under, and shall be construed in accordance with, Generally Accepted Accounting Principles.

SECTION 2

DESCRIPTION OF LOAN

2.1    Purpose of Loan and Loan Amount. Subject to the terms and conditions of this Agreement, Lender agrees to make a loan in favor of Borrower (the “Loan”) in the principal amount of $20,000,000.00, of which $10,000,000 shall be made available to the Borrower simultaneously with the execution of this Agreement (the “First Closing”) and the remaining $10,000,000 shall be made available to the Borrower no later than December 17, 2021 (the “Second Closing”). The proceeds of the Loan shall be used for working capital purposes.

2.2    The Notes.    The Loan shall be evidenced by the two separate unsecured convertible promissory notes (each a “Note” and together the “Notes”) from Borrower in favor of Lender in the original principal amount of 10,000,000.00. The terms of the Note shall be set forth in the Notes, the form of which is set forth on Annex A hereto. For purposes of each Note, the Conversion Price in Section 2(b) thereof shall be the greater of (i) the price that is 228% of the closing price of the Common Stock on the trading day immediately prior to the date of the Note or (ii) five ($5.00) dollars per share.

 

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SECTION 3

LINE OF CREDIT

3.1    Termination of Line of Credit.    Upon the Second Closing, and without any further action, the Line of Credit shall terminate, at which time, Borrower may not draw any funds from the Line of Credit, and outstanding amounts owed under the Line of Credit (if any) shall be due and payable to Lender immediately.

SECTION 4

REPRESENTATIONS AND WARRANTIES

To induce Lender to enter into this Agreement and to make the Loan hereunder, Borrower represents and warrants to Lender as follows:

4.1    Organization, Standing, Corporate Powers, etc. of Borrower.

4.1.1    Borrower (i) is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and (ii) has all requisite power and authority, corporate or otherwise, to conduct its business as now being conducted and to own its properties and assets.

4.1.2    Borrower possesses all requisite power and authority, corporate or otherwise, to execute, deliver and perform all the Obligations.

4.1.3    The Loan Documents when executed by Borrower will be enforceable in accordance with their respective terms, subject only to bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally.

4.2    Authorized Borrowing, etc.

4.2.1    The execution, delivery and performance of this Agreement and the other Loan Documents by Borrower and the execution and delivery of the Notes (i) have been duly authorized by all requisite corporate action, if applicable, (ii) will not violate or conflict with any provision of Applicable Law, any governmental rule or regulation, any order of any court or other agency of government, either domestic or foreign, or the Certificate of Incorporation (or other organizational document), by-laws or standing resolutions of Borrower, if applicable, and (iii) do not violate or conflict with any provision of any indenture, agreement or other instrument to which Borrower is a party, or by which Borrower or any of its properties or assets are bound, or be in conflict with, result in a breach of or constitute (or would constitute with due notice or lapse of time or otherwise) a default under any provision of such indenture, agreement or other instruments, or result in the creation or imposition of any Lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of Borrower.

4.2.2    No registration with, consent or approval of, or other action by any Federal, state or other (including non-U.S.) governmental authority, regulatory body or court of law is required or pending in connection with the execution, delivery and performance of this Agreement by Borrower.

 

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SECTION 5

CONDITIONS OF LENDING

The obligation of the Lender to make the Loan is conditioned upon the performance of all agreements by Borrower contained herein, as well as satisfaction of the following conditions precedent:

5.1    Representations and Warranties. The representations and warranties set forth in Section 4 hereof shall be true and correct in all material respects.

SECTION 6

AFFIRMATIVE COVENANTS

Borrower covenants and agrees that from the date of this Agreement until payment in full of all present or future Obligations hereunder, unless Lender shall otherwise consent in writing, Borrower will fully comply with the following provisions:

6.1    Existence, Properties, etc. To the extent that the same are necessary for the proper and advantageous conduct of its businesses, (i) cause to be done all things necessary to preserve, renew and keep in full force and effect its corporate existence, rights, licenses, permits and franchises and (ii) comply with all laws and regulations applicable to it, except under clauses (i) and (ii) where the failure to preserve, renew, keep in full force and effect or comply would not reasonably be expected to be, have or result in a Material Adverse Effect. Engage in principally the same or similar lines of business substantially as heretofore conducted or any logical extension thereof.

6.2    Shareholder Approval. Borrowers shall use commercially reasonable efforts to obtain shareholder approval relating to the conversion of the Notes into shares of Common Stock, including shares of Common Stock upon conversion of the note dated April 16, 2021, (the “Share Conversion”) in accordance with Nasdaq Rule 5635, which efforts shall include the addition of a proposal for shareholder to vote on the approval of the Share Conversion at the next Annual Meeting of Shareholders.

6.3    Observance of Laws. Conform to and duly observe all laws, regulations, and other valid requirements of any governmental authority with respect to the conduct of its business, except where the failure to conform to and duly observe would not reasonably be expected to, have or result in a Material Adverse Effect.

 

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SECTION 7

NEGATIVE COVENANT

Borrower covenants and agrees that from the date of this Agreement until payment in full of all present or future Obligations hereunder, unless Lender shall otherwise consent in writing, Borrower will fully comply with the following provisions:

7.1    Prohibition on delisting. Borrower shall not delist its Common Stock from the Nasdaq Stock Market.

SECTION 8

MISCELLANEOUS

8.1    Notices. Unless otherwise specified herein, all notices, requests, demands or other communications to or from the parties hereto shall be deemed to have been duly given and made (a) in the case of a letter sent other than by mail, when the letter is delivered to the party to whom it is addressed, (b) in the case of email, when the email is sent, (c)(i) in the case of a letter sent by mail, three (3) days from the day on which the letter is deposited, postage prepaid, in a United States post office depository, certified or registered mail, return receipt requested, or (ii) in the case of a document sent by Federal Express, DHL or other reputable overnight courier service, one (1) Business Day from the day on which the document is delivered to such courier service, fees and charges prepaid, and in either case addressed as follows:

 

If to Borrower:    Galectin Therapeutics, Inc.
   4960 Peachtree Industrial Boulevard, Suite 240
   Norcross, Georgia 30071
   Attn: Jack Callicut
   Email: callicutt@galectintherapeutics.com
With a copy to:    Dentons US LLP
   303 Peachtree Street NE; Suite 5300
   Atlanta, Georgia 30308
   Attn: Robert Tritt
   Email: robert.tritt@dentons.com
If to the Lender:    Richard E. Uihlein
   Uline Inc.
   12575 Uline Drive
   Pleasant Prairie, WI 53158
   Email: ruihlein@uline.com

 

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Notice of change of address shall be effective only upon receipt.

8.2    Survival of Agreement; Successors.

8.2.1    All covenants, agreements, representations and warranties made herein and in the other Loan Documents and in the certificates delivered pursuant hereto shall survive the respective dates of effectiveness thereof and shall continue in full force and effect so long as the Loan Documents, or any of them, remain in effect or any of the Obligations are outstanding and unpaid.

8.2.2    Whenever in the Loan Documents any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party. All covenants, promises and agreements by or on behalf of Borrower which are contained in the Loan Documents shall inure to the benefit of the successors and assigns of the Lender.

8.3    Governing Law. Each of the Loan Documents shall be construed in accordance with and governed by the laws of the State of Georgia without giving effect to principles of conflict of laws.

8.4    Modification of Agreement. No modification or waiver of any provision of the Loan Documents nor consent to any departure by Borrower therefrom shall in any event be effective against the Lender unless the same shall be in writing and signed by all parties hereto, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on Borrower shall entitle Borrower to any other or further notice or demand in the same, similar or other circumstances.

8.5    Waiver of Rights by the Lender. No failure or delay on the part of the Lender in exercising any right, power or privilege under the Loan Documents shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise or the exercise of any other right, power or privilege.

8.6    Severability; Conflicts.

8.6.1    In case any one or more of the provisions contained in the Loan Documents should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby.

8.6.2    In the event of any conflict, inconsistency or ambiguity between the provisions of this Agreement and the provisions of any other Loan Document, the provisions of this Agreement shall prevail.

8.7    Counterparts. This Agreement may be executed in one or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument.

 

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8.8    Currency. All references to monies in this Agreement or any other Loan Document shall be deemed to mean lawful monies of the United States of America.

8.9    Successors and Assigns. This Agreement and the other Loan Documents shall be binding upon the parties hereto and thereto and their respective successors and assigns, and shall inure to the benefit of the parties hereto and thereto, and, to the extent permitted herein, their respective successors and assigns. The terms and provisions of this Agreement shall inure to the benefit of any assignee or transferee of the Note, and in the event of any such assignment or transfer by Lender, the rights and privileges therein conferred upon Lender shall automatically extend to and be vested in such assignee or transferee, and Lender shall be relieved of all liability thereunder. Borrower may not assign any of its rights or obligations under the Loan Documents without the prior written consent of Lender.

8.10    Entire Agreement, Etc. The Loan Documents express the entire understanding of the parties with respect to the transactions contemplated thereby and supersede any prior written or oral understanding of the parties thereto.

8.11    Headings. The name of this Agreement, as well as Section headings used herein, are for convenience of reference only and are not to affect the construction of, or be taken into consideration in interpreting this Agreement.

8.12    Terms. Any term used herein shall be equally applicable to both the singular and plural forms.

8.13    WAIVER OF JURY TRIAL. BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREIN. BORROWER ACKNOWLEDGES THAT LENDER HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY THE PROVISIONS OF THIS SECTION.

[SIGNATURE PAGE TO FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be duly executed, sealed and delivered the day and year first above written.

 

GALECTIN THERAPEUTICS, INC.
By:  

/s/ Joel Lewis

Name:   Joel Lewis
Title:   President and Chief Executive Officer

 

RICHARD E. UIHLEIN

    /s/ Richard E. Uihlein

Richard E. Uihlein

LOAN AGREEMENT SIGNATURE PAGE

 

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Exhibit A

Form of Note

 

9

EX-10.2

Exhibit 10.2

NEITHER THIS PROMISSORY NOTE NOR THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW AND NEITHER MAY BE SOLD OR OTHERWISE TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (ii) THE COMPANY SHALL HAVE RECEIVED A WRITTEN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER SUCH SECURITIES ACT AND SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER.

GALECTIN THERAPEUTICS, INC.

UNSECURED CONVERTIBLE PROMISSORY NOTE

 

$10,000,000   September 17, 2021  

Subject to the terms of this Unsecured Convertible Promissory Note (this “Note”), GALECTIN THERAPEUTICS, INC., a Nevada corporation (the “Company”), for value received, hereby promises to pay to Richard E. Uihlein, or his registered assigns (“Holder”), the sum of Ten Million Dollars ($10,000,000), or such lesser amount as shall then equal the outstanding principal amount hereof, together with any unpaid accrued interest hereon as set forth below, which shall be due and payable on the Maturity Date (as defined below); provided, however, that this Note has not been converted into equity securities of the Company prior to such date.

1.    Payment Obligation. On the date that is four (4) years after the date hereof (the “Maturity Date”), the Company shall pay to Holder the (i) outstanding principal under this Note; (ii) interest on such principal at the rate of two percent (2%) per annum, compounded annually, during the period beginning on the date of issuance of this Note and ending on the Maturity Date; and (iii) additional interest on such principal at the rate of two and one-half percent (2.5%) per quarter, computed for the quarterly periods starting September 17, December 17, March 17, and June 17, beginning on the date of issuance of this Note and ending on the Maturity Date; provided, however, that additional interest pursuant to this sub clause (iii) hereof is payable if and only if Holder has elected to convert the entire balance of principal, interest and additional interest of this Note in accordance with Section 2 hereof, and has not received cash payment of outstanding principal and interest under this Note in lieu of conversion. All cash payments of principal or interest hereunder shall be made in U.S. dollars, via wire or at such address as Holder may designate in writing.

2.    Conversion of the Note.

(a)    Conversion Notice. Notwithstanding anything contained in this Note to the contrary, if on or before the Maturity Date Holder provides 60 days prior, which may be waived by the Company at its sole discretion, written notice to the Company (the “Conversion

 

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Notice”) indicating that Holder has elected to convert all, but not less than all, of the outstanding aggregate principal amount of this Note and all unpaid accrued interest and additional interest arising hereunder into such shares of common stock of the Company, par value $0.001 per share (the “Common Stock”) then the conversion of outstanding principal under this Note and any unpaid accrued interest and additional interest arising hereunder into shares of Common Stock shall occur in accordance with this Section 2 (any such conversion being hereinafter referred to as a “Conversion”). Notwithstanding the foregoing, this Note shall not be convertible into Common Stock unless the Company’s shareholders approve the Conversion in accordance with Nasdaq Rule 5635 is obtained.

(b)    Conversion Mechanics. In the event of a Conversion, the principal balance and all unpaid accrued interest and additional interest arising hereunder shall be considered payment for the shares of Common Stock to be issued to Holder. The number of shares of Common Stock issuable upon a Conversion shall be equal to the quotient obtained by dividing (A) the unpaid principal of this Note, together with any unpaid accrued interest and additional interest arising hereunder, to be converted by (B) $8.64 (the “Conversion Price”) The Conversion Price is 228% of the closing price of the Common Stock on the trading day immediately prior to the date of this Note.

(c)    Effect of Conversion. Upon Conversion of this Note, the Company shall be forever released from all its obligations and liabilities under this Note.

3.    Prepayment. The Company may prepay in whole or in part the principal sum of this Note at any time. However, the Company must provide at least seven (7) days’ advance notice to Holder of its intent to prepay.    If the Holder provides the Conversion Notice to the Company prior to the prepayment date stated by the Company in its prepayment notice, then the prepayment notice will not be effective, and the Conversion shall be effective 60 days after Holder gives the Conversion Notice or such earlier date as the Holder and the Company agree.

4.    No Fractional Equity Securities. No fractional securities will be issued upon Conversion. In lieu of a fractional share of any equity security to which Holder would otherwise be entitled hereunder, the Company will pay the cash value of such fractional security to Holder within ten (10) days of Conversion. The cash value of a fractional share of Common Stock shall be determined according to the applicable Conversion Price.

5.    Securities Laws.

(a)    Holder represents and warrants that Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated by the Securities and Exchange Commission. Holder understands and acknowledges that this Note is not being registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Act”), but instead is being issued under an exemption or exemptions from the registration and qualification requirements of the Act or other applicable state securities laws. Holder has sufficient knowledge and experience in business and financial matters to evaluate the Company and to make an informed decision with respect to the issuance of the this Note and the equity securities issuable upon Conversion of this Note. By virtue of the position of Holder with respect to the Company and/or the relationship between Holder and the Company, Holder has

 

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access to all material information with regard to the Company. Accordingly, Holder has received and reviewed such information and records of the Company as Holder deemed necessary, and the Company has made available to the undersigned the opportunity to ask questions of, and to receive answers from, representatives of the Company and to obtain additional information relative to the Company and the issuance of the Note and the equity securities issuable upon Conversion of this Note to the extent the Company possesses such information or could acquire it without unreasonable effort or expense. All such materials and information requested by Holder have been made available and examined by the undersigned.

(b)    Holder acknowledges that this Note and the securities to be issued upon Conversion of this Note are being acquired solely for Holder’s own account and not as a nominee for any other party, and for investment, and that Holder will not offer, sell or otherwise dispose of this Note or any equity securities to be issued upon Conversion of this Note, except under circumstances that will not result in a violation of the Securities Act of 1933, as amended, or any applicable state securities laws. Upon Conversion of this Note, Holder shall, if requested by the Company, confirm in writing, in a form reasonably satisfactory to the Company, that the equity securities being acquired are being acquired solely for Holder’s own account and not as a nominee for any other party, for investment, and not with a view toward distribution or resale.

6.    Registration. At such time of the Company’s choosing, which shall be reasonably acceptable to the Holder, the Company shall prepare and file with the SEC a Registration Statement on Form S-3 (or Form S-1 if the Company is not eligible to use Form S-3) covering the resale of Common Stock that this Note is convertible into. The Company shall use its commercially reasonable efforts to have such Registration Statement declared effective by the SEC as soon as practicable and shall keep such Registration Statement effective for until such time of Holder may sell its shares of Common Stock without being subject to volume limitations under Rule 144(e).

7.    Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Company and Holder.

8.    Assignment; Transfer. This Note shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that Holder may not assign, sell, pledge or otherwise transfer its rights or obligations under this Note, or the Common Stock without the prior written consent of the Company. Without limiting the generality of the foregoing, with respect to any proposed offer, sale or other disposition of this Note, or the Common Stock into which this Note may be converted, Holder will give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of Holder’s counsel, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect).

9.    Treatment of Note. To the extent permitted by generally accepted accounting principles, the Company will treat, account and report the Note as debt and not equity for accounting purposes and with respect to any returns filed with federal, state or local tax authorities.

 

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10.    Notices. Any notice, request or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or if telegraphed or mailed by registered or certified mail, postage prepaid, at the respective addresses of the parties as set forth on the signature page hereto. Any party hereto may by notice so given change its address for future notice hereunder. Notice shall conclusively be deemed to have been given when personally delivered or when deposited in the mail or telegraphed in the manner set forth above and shall be deemed to have been received when delivered.

11.    Time is of the Essence. Time is of the essence with respect to all matters hereunder.

12.    Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Georgia excluding that body of law relating to conflict of laws.

13.    Heading; References. All headings used herein are used for convenience only and shall not be used to construe or interpret this Note. Except where otherwise indicated, all references herein to Sections refer to Sections hereof.

14.    Replacement of Note. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, and, in each case of loss, theft or destruction, delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Note, the Company shall execute and deliver, in lieu of this Note, a new note of like tenor.

[SIGNATURES BEGIN ON NEXT PAGE]

 

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IN WITNESS WHEREOF, the Company has caused this Note to be issued as of the date first set forth above.

 

GALECTIN THERAPEUTICS, INC.
By:  

/s/ Joel Lewis

Name:   Joel Lewis
Title:   Chief Executive Officer
Address of the Company:

4960 Peachtree Industrial Boulevard

Suite 240

Norcross, GA 30071

EX-99.1

Exhibit 99.1

LOGO

Galectin Therapeutics Announces $20 Million Convertible Debt Financing from Its Chairman, Richard E. Uihlein

NORCROSS, Ga., September 21, 2021 (GLOBE NEWSWIRE) — Galectin Therapeutics Inc. (NASDAQ:GALT), the leading developer of therapeutics that target galectin proteins, today announced that it has entered into a $20 million convertible debt financing agreement with Richard E. Uihlein, the Company’s Chairman and largest individual stockholder. This $20 million convertible debt is in addition to a $10 million convertible debt financing from Mr. Uihlein completed in April 2021.

The loan agreement comprises two separate $10 million convertible notes, the first of which closed and funded on September 17, 2021 and the second which will close on or before December 17, 2021. The convertible notes are unsecured and bear interest at a rate of 2% compounded annually. Additional interest of 2.5% per quarter will accrue but will only be paid if the debt and interest are converted into shares of the Company’s common stock, at Mr. Uihlein’s option, on or prior to maturity, which is four years from the date of each loan closing. The conversion price of the debt and interest is fixed at 228% above the price per share of common stock on the day prior to each closing or $5.00 per share, whichever is greater.

Richard E. Uihlein, Chairman of Galectin Therapeutics, commented on his $20 million investment, “I remain deeply committed to the Company’s success and our goal of addressing large, unmet medical needs. We are the only Company addressing NASH cirrhosis using a clinically relevant endpoint to measure efficacy. Additionally, the results from a phase 1 trial using belapectin in combination with KEYTRUDA®, a checkpoint inhibitor, were very encouraging, particularly in patients with metastatic melanoma. This financing demonstrates my confidence in our team and our science, and I look forward to advancing our programs.”

“I want to thank Mr. Uihlein for his unwavering commitment to the Company. The impact of his financial backing and leadership as Chairman cannot be overstated,” said Joel Lewis, president and Chief Executive Officer of Galectin Therapeutics. “We continue to make progress in our NAVIGATE trial for patients with NASH cirrhosis and we also are exploring how to best move forward in the treatment of metastatic melanoma, where we have seen promising early results of belapectin in combination with KEYTRUDA in the treatment of advanced melanoma. This financing, as well as the recent addition of several accomplished and experienced professionals to our management team, provide resources that will help us pursue our goals.”

About Belapectin

Belapectin is a complex carbohydrate drug that targets galectin-3, a critical protein in the pathogenesis of NASH and fibrosis. Galectin-3 plays a major role in diseases that involve scarring of organs including fibrotic disorders of the liver, lung, kidney, heart and vascular system. Belapectin binds to galectin-3 and disrupts its function. Preclinical data in animals have shown that belapectin has robust treatment effects in reversing liver fibrosis and cirrhosis. A Phase 2 study showed belapectin may prevent the development of esophageal varices in NASH cirrhosis, and these results provide the basis for the conduct of the NAVIGATE trial. The NAVIGATE trial (NAVIGATEnash.com), entitled “A Seamless Adaptive Phase 2b/3, Double-Blind, Randomized, Placebo-controlled Multicenter, International Study Evaluating


the Efficacy and Safety of Belapectin (GR-MD-02) for the Prevention of Esophageal Varices in NASH Cirrhosis” began randomization of patients in August, 2020, and is posted on www.clinicaltrials.gov (NCT04365868). Galectin-3 has a significant role in cancer, and the Company has supported a Phase 1b study in combined immunotherapy of belapectin and KEYTRUDA in advanced melanoma and in head and neck cancer. This trial provided a strong rationale for moving forward into a Phase 2 development program which the company is considering.

About Fatty Liver Disease with Advanced Fibrosis and Cirrhosis

Non-alcoholic steatohepatitis (NASH) has become a common disease of the liver with the rise in obesity and other metabolic diseases. NASH is estimated to affect up to 28 million people in the U.S. It is characterized by the presence of excess fat in the liver along with inflammation and hepatocyte damage (ballooning) in people who consume little or no alcohol. Over time, patients with NASH can develop excessive fibrosis, or scarring of the liver, and ultimately liver cirrhosis. It is estimated that as many as 1 to 2 million individuals in the U.S. will develop cirrhosis as a result of NASH, for which liver transplantation is the only curative treatment available. Approximately 8,890 liver transplants are performed annually in the U.S. There are no drug therapies approved for the treatment of liver fibrosis or cirrhosis.

About Galectin Therapeutics

Galectin Therapeutics is dedicated to developing novel therapies to improve the lives of patients with chronic liver disease and cancer. Galectin’s lead drug belapectin (formerly known as GR-MD-02) is a carbohydrate-based drug that inhibits the galectin-3 protein which is directly involved in multiple inflammatory, fibrotic, and malignant diseases, for which it has Fast Track designation by the U.S. Food and Drug Administration. The lead development program is in non-alcoholic steatohepatitis (NASH) with cirrhosis, the most advanced form of NASH-related fibrosis. This is the most common liver disease and one of the largest drug development opportunities available today. Additional development programs are in treatment of combination immunotherapy for advanced melanoma and other malignancies. Advancement of these additional clinical programs is largely dependent on finding a suitable partner. Galectin seeks to leverage extensive scientific and development expertise as well as established relationships with external sources to achieve cost-effective and efficient development. Additional information is available at www.galectintherapeutics.com.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or future financial performance, and use words such as “may,” “estimate,” “could,” “expect” and others. They are based on management’s current expectations and are subject to factors and uncertainties that could cause actual results to differ materially from those described in the statements. These statements include those regarding the hope that Galectin’s development program for belapectin will lead to the first therapy for the treatment of fatty liver disease with cirrhosis and those regarding the hope that our lead compounds will be successful in cancer immunotherapy and in other therapeutic indications. Factors that could cause actual performance to differ materially from those discussed in the forward-looking statements include, among others, that trial endpoints required by the FDA may not be achieved; Galectin may not be successful in developing effective treatments and/or obtaining the requisite approvals for the use of belapectin or any of its other drugs in development; the Company may not be


successful in scaling up manufacturing and meeting requirements related to chemistry, manufacturing and control matters; the Company’s current clinical trial and any future clinical studies as modified to meet the requirements of the FDA may not produce positive results in a timely fashion, if at all, and could require larger and longer trials, which would be time consuming and costly; plans regarding development, approval and marketing of any of Galectin’s drugs are subject to change at any time based on the changing needs of the Company as determined by management and regulatory agencies; regardless of the results of any of its development programs, Galectin may be unsuccessful in developing partnerships with other companies or raising additional capital that would allow it to further develop and/or fund any studies or trials. Galectin has incurred operating losses since inception, and its ability to successfully develop and market drugs may be impacted by its ability to manage costs and finance continuing operations. Global factors such as coronavirus may continue to impact NASH patient populations around the globe and slow trial enrollment and prolong the duration of the trial and significantly impact associated costs. For a discussion of additional factors impacting Galectin’s business, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, and subsequent filings with the SEC. You should not place undue reliance on forward-looking statements. Although subsequent events may cause its views to change, management disclaims any obligation to update forward-looking statements.

Company Contact:

Jack Callicutt, Chief Financial Officer

(678) 620-3186

ir@galectintherapeutics.com

Galectin Therapeutics and its associated logo is a registered trademark of Galectin Therapeutics Inc. Belapectin is the USAN assigned name for Galectin Therapeutics’ galectin-3 inhibitor GR-MD-02.