0000950170-24-113091 | 8-K | XBRL Viewer

Document and Entity Information	Oct. 07, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 07, 2024
Entity Registrant Name	GALECTO, INC.
Entity Central Index Key	0001800315
Entity Emerging Growth Company	true
Current Fiscal Year End Date	--12-31
Entity Ex Transition Period	false
Entity File Number	001-39655
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	37-1957007
Entity Address, Address Line One	75 State Street
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Boston
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02109
City Area Code	+45
Local Phone Number	70 70 52 10
Title of 12(b) Security	Common Stock, $0.00001 par value per share
Trading Symbol	GLTO
Security Exchange Name	NASDAQ
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false

Basis of Presentation

6 Months Ended

Jun. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

1. Basis of Presentation

The unaudited pro forma condensed consolidated financial information was prepared with the Asset Purchase being accounted for as an asset acquisition by the Company under Accounting Standards Codification (“ASC”) Topic 805-50. The Company further concluded that the set of assets acquired in the transaction does not represent a business under Securities and Exchange Commission Regulation S-X Rule 11-01.

Upon completion of the Asset Purchase, the Company obtained control of assets consisting primarily of in-process research and development (IPR&D) related to Bridge Medicine’s BRM-1420 program. In accordance with U.S. GAAP, the Company must first assess whether an integrated set of assets and activities should be accounted for as an acquisition of a business or an asset acquisition. An initial screen test is completed to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single asset or group of similar assets. If that screen is met, the set is not considered a business and is accounted for as an asset acquisition. The Company will account for the Asset Purchase as an asset acquisition as substantially all of the fair value of the gross assets being acquired is concentrated within Bridge Medicine’s programs and development candidates which are considered a group of similar assets.

Pro Forma Condensed Consolidated Statement of Operations and Comprehensive Loss - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Operating expenses
Research and development	$ 4,297	$ 23,770
General and administrative	6,053	12,687
Restructuring costs	968	3,448
Total operating expenses	11,318	39,905
Loss from operations	(11,318)	(39,905)
Other income, net
Interest income, net	470	1,689
Gain on sale of equipment		64
Foreign exchange transaction gain (loss), net	75	(197)
Total other income, net	545	1,556
Loss before income tax expense	(10,773)
Income tax expense	42
Net loss	(10,815)	(38,349)
Net loss attributable to common shares	$ (10,815)	$ (38,349)
Net loss per common share, basic	$ (9.97)	$ (36.08)
Net loss per common share, diluted	$ (9.97)	$ (36.08)
Weighted-average number of shares used in computing net loss per common share, basic	1,084,565	1,062,872
Weighted-average number of shares used in computing net loss per common share, diluted	1,084,565	1,062,872
Other comprehensive loss, net of tax
Currency translation gain (loss)	$ (217)	$ 393
Unrealized gain on marketable securities	34	231
Other comprehensive gain (loss), net of tax	(183)	624
Total comprehensive loss	(10,998)	(37,725)
Pro Forma
Operating expenses
Research and development	4,297	29,058
General and administrative	6,053	12,687
Restructuring costs	968	3,448
Total operating expenses	11,318	45,193
Loss from operations	(11,318)	(45,193)
Other income, net
Interest income, net	470	1,689
Gain on sale of equipment		64
Foreign exchange transaction gain (loss), net	75	(197)
Total other income, net	545	1,556
Loss before income tax expense	(10,773)
Income tax expense	42
Net loss	(10,815)	(43,637)
Net loss attributable to common shares	$ (9,487)	$ (38,189)
Net loss per common share, basic	$ (8.27)	$ (33.93)
Net loss per common share, diluted	$ (8.27)	$ (33.93)
Weighted-average number of shares used in computing net loss per common share, basic	1,147,159	1,125,466
Weighted-average number of shares used in computing net loss per common share, diluted	1,147,159	1,125,466
Net loss attributable to preferred shares	$ (1,328)	$ (5,448)
Net income (loss) per preferred share, basic	$ (8,270)	$ (33,932)
Net income (loss) per preferred share, diluted	$ (8,270)	$ (33,932)
Weighted-average number of shares used in computing net loss per preferred share, basic	161	161
Weighted-average number of shares used in computing net loss per preferred share, diluted	161	161
Other comprehensive loss, net of tax
Currency translation gain (loss)	$ (217)	$ 393
Unrealized gain on marketable securities	34	231
Other comprehensive gain (loss), net of tax	(183)	624
Total comprehensive loss	(10,998)	(43,013)
Asset Acquisition Adjustments
Operating expenses
Research and development		5,288
Total operating expenses		5,288
Loss from operations		(5,288)
Other income, net
Net loss		(5,288)
Net loss attributable to common shares	$ 1,328	$ 160
Weighted-average number of shares used in computing net loss per common share, basic	62,594	62,594
Weighted-average number of shares used in computing net loss per common share, diluted	62,594	62,594
Net loss attributable to preferred shares	$ (1,328)	$ (5,448)
Weighted-average number of shares used in computing net loss per preferred share, basic	161	161
Weighted-average number of shares used in computing net loss per preferred share, diluted	161	161
Other comprehensive loss, net of tax
Total comprehensive loss		$ (5,288)

Transaction Adjustments

6 Months Ended

Jun. 30, 2024

Transaction Adjustments [Abstract]

Transaction Adjustments

2. Transaction Adjustments

The unaudited pro forma condensed consolidated financial statements reflect the following notes and adjustments:

      (a)Represents the cash paid to Bridge Medicines to reimburse transaction costs as well as the estimated transaction costs associated with the Asset Purchase incurred by the Company. 
(b)Represents the fair value of the Preferred Stock Payment Shares issued to Bridge Medicines in consideration of the assets acquired in the Asset Purchase. 
(c)Represents the fair value of the Common Stock Payment Shares issued to Bridge Medicines in consideration of the assets acquired in the Asset Purchase.
(d)Represents the earnings adjustments associated with pro forma adjustment (e).
(e)Represents the expense to be recorded associated with the Asset Purchase. The assets acquired do not have an alternative future use to the Company as defined in Accounting Standards Codification (“ASC”) 730, Research and development. Accordingly, the Company recorded the fair value of the consideration transferred for the assets acquired, which is comprised of the cash paid for transaction costs under pro forma adjustment (a), and the fair value of the Payment Shares under pro forma adjustments (b) and (c), as Research and development expense as opposed to capitalizing the costs as an asset.
(f)Represents the allocation of pro forma net loss between the pro forma common shares and pro forma preferred shares of the Company. The preferred shares participate in earnings and losses of the Company with the Common Stock and are therefore treated as a separate class of common stock for purposes of calculating net loss per share. Net loss per share is provided separately for each class of stock. Subject to receipt of Stockholder Approval, the preferred stock is convertible into common stock at a conversion ratio of 1-to-1,000 and participate in losses on an as-converted basis. Accordingly, the net loss per preferred share is 1,000 times the net loss per common share.
(g)Represents the issuance of shares of Common Stock Payment Shares and Preferred Stock Payment Shares to Bridge Medicines in consideration of the assets acquired in the Asset Purchase. 

     

Pro Forma Condensed Consolidated Balance Sheet (Parenthetical)	Jun. 30, 2024 $ / shares shares
Preferred stock, par value \| $ / shares	$ 0.00001
Preferred stock, authorized	10,000,000
Preferred stock, issued	0
Preferred stock, outstanding	0
Common stock, par value \| $ / shares	$ 0.00001
Common stock, authorized	300,000,000
Common stock, issued	1,084,841
Common stock, outstanding	1,084,841
Pro Forma
Preferred stock, issued	161
Preferred stock, outstanding	161
Common stock, issued	1,147,435
Common stock, outstanding	1,147,435

Pro Forma Condensed Consolidated Balance Sheet $ in Thousands	Jun. 30, 2024 USD ($)
Current assets
Cash and cash equivalents	$ 22,862
Prepaid expenses and other current assets	2,306
Total current assets	25,168
Operating lease right-of-use asset	76
Equipment, net	67
Other assets, non-current	1,986
Total assets	27,297
Current liabilities
Accounts payable	724
Accrued expenses and other current liabilities	2,985
Total current liabilities	3,709
Total liabilities	3,709
Mezzanine equity
Preferred stock, par value of $0.00001 per share; 10,000,000 shares authorized at June 30, 2024; no shares issued or outstanding as of June 30, 2024, actual; 161 shares issued and outstanding as of June 30, 2024, pro forma
Stockholders’ equity
Common stock, par value of $0.00001 per share; 300,000,000 shares authorized at June 30, 2024; 1,084,841 issued and outstanding at June 30, 2024; actual, 1,147,435 issued and outstanding at June 30, 2024, pro forma
Additional paid-in capital	290,291
Accumulated deficit	(266,900)
Accumulated other comprehensive gain	197
Total stockholders’ equity	23,588
Total liabilities and stockholders' equity	27,297
Pro Forma
Current assets
Cash and cash equivalents	20,182
Prepaid expenses and other current assets	2,306
Total current assets	22,488
Operating lease right-of-use asset	76
Equipment, net	67
Other assets, non-current	1,986
Total assets	24,617
Current liabilities
Accounts payable	724
Accrued expenses and other current liabilities	2,985
Total current liabilities	3,709
Total liabilities	3,709
Mezzanine equity
Preferred stock, par value of $0.00001 per share; 10,000,000 shares authorized at June 30, 2024; no shares issued or outstanding as of June 30, 2024, actual; 161 shares issued and outstanding as of June 30, 2024, pro forma	1,876
Stockholders’ equity
Common stock, par value of $0.00001 per share; 300,000,000 shares authorized at June 30, 2024; 1,084,841 issued and outstanding at June 30, 2024; actual, 1,147,435 issued and outstanding at June 30, 2024, pro forma
Additional paid-in capital	291,023
Accumulated deficit	(272,188)
Accumulated other comprehensive gain	197
Total stockholders’ equity	20,908
Total liabilities and stockholders' equity	24,617
Asset Acquisition Adjustments
Current assets
Cash and cash equivalents	(2,680)
Total current assets	(2,680)
Total assets	(2,680)
Mezzanine equity
Preferred stock, par value of $0.00001 per share; 10,000,000 shares authorized at June 30, 2024; no shares issued or outstanding as of June 30, 2024, actual; 161 shares issued and outstanding as of June 30, 2024, pro forma	1,876
Stockholders’ equity
Common stock, par value of $0.00001 per share; 300,000,000 shares authorized at June 30, 2024; 1,084,841 issued and outstanding at June 30, 2024; actual, 1,147,435 issued and outstanding at June 30, 2024, pro forma
Additional paid-in capital	732
Accumulated deficit	(5,288)
Total stockholders’ equity	(2,680)
Total liabilities and stockholders' equity	$ (2,680)

Transaction Adjustments - Additional Information (Details)	Jun. 30, 2024
Transaction Adjustments [Abstract]
Preferred stock, conversion ratio	0.001

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Reports Document and Entity Information Statements Pro Forma Condensed Consolidated Balance Sheet Pro Forma Condensed Consolidated Balance Sheet (Parenthetical) Pro Forma Condensed Consolidated Statement of Operations and Comprehensive Loss Reports Basis of Presentation Transaction Adjustments Details Transaction Adjustments - Additional Information (Details) All Reports