10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒	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 Number: 001-40591

HCW Biologics Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	82-5024477
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2929 N. Commerce Parkway Miramar, Florida	33025
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (954) 842–2024

Securities 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, par value $0.0001 per share

    HCWB

    The Nasdaq Stock Market LLC

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, 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 ☒

As of August 9, 2024, the registrant had 37,823,394 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements	1
	Unaudited condensed interim financial statements as of and for the three and six months ended June 30, 2023 and June 30, 2024:
	Balance sheets	1
	Statements of operations	2
	Statements of changes in stockholders’ equity (deficit)	3
	Statements of cash flows	4
	Notes to financial statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
PART II.	OTHER INFORMATION	31
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	33
Item 6.	Exhibits	35
Signatures		36

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

HCW Biologics Inc.

Condensed Balance Sheets


	December 31,			June 30,
	2023			2024
				Unaudited
ASSETS
Current assets:
Cash and cash equivalents	$	3,595,101		$	1,161,314
Accounts receivable, net		1,535,757			654,973
Prepaid expenses		1,042,413			404,918
Other current assets		230,916			164,607
Total current assets		6,404,187			2,385,812
Investments		1,599,751			1,599,751
Property, plant and equipment, net		20,453,184			22,806,052
Other assets		56,538			28,476
Total assets	$	28,513,660		$	26,820,091
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Liabilities
Current liabilities:
Accounts payable	$	6,167,223		$	16,877,463
Accrued liabilities and other current liabilities		2,580,402			6,341,676
Total current liabilities		8,747,625			23,219,139
Debt, net		6,304,318			9,900,721
Total liabilities		15,051,943			33,119,860
Commitments and contingencies (Note 8)
Stockholders’ equity (deficit):
Common stock:
Common, $0.0001 par value; 250,000,000 shares authorized and 36,025,104 shares issued at December 31, 2023; 250,000,000 shares authorized and 37,823,394 shares issued at June 30, 2024		3,603			3,782
Additional paid-in capital		83,990,437			86,977,024
Accumulated deficit		(70,532,323	)		(93,280,575	)
Total stockholders’ equity (deficit)		13,461,717			(6,299,769	)
Total liabilities and stockholders’ equity (deficit)	$	28,513,660		$	26,820,091

See accompanying notes to the unaudited condensed interim financial statements.

HCW Biologics Inc.

Condensed Statements of Operations

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2024			2023			2024
Revenues:
Revenues	$	622,807		$	618,854		$	664,690		$	1,745,566
Cost of revenues		(502,402	)		(438,443	)		(531,752	)		(950,408	)
Net revenues		120,405			180,411			132,938			795,158

Operating expenses:
Research and development		1,616,666			2,029,186			3,872,479			4,152,470
General and administrative		1,587,861			1,594,193			3,596,739			3,160,285
Legal expenses		1,426,399			10,393,042			2,534,811			14,812,076
Nonoperating loss		—			1,300,000			—			1,300,000
Total operating expenses		4,630,926			15,316,421			10,004,029			23,424,831
Loss from operations		(4,510,521	)		(15,136,010	)		(9,871,091	)		(22,629,673	)
Interest expense		(95,514	)		(159,666	)		(188,951	)		(159,666	)
Other (expense) income, net		301,615			15,485			684,936			41,086
Net loss	$	(4,304,420	)	$	(15,280,191	)	$	(9,375,106	)	$	(22,748,253	)
Net loss per share, basic and diluted	$	(0.12	)	$	(0.40	)	$	(0.26	)	$	(0.61	)
Weighted average shares outstanding, basic and diluted		35,910,669			37,823,394			35,897,224			37,523,491

See accompanying notes to the unaudited condensed interim financial statements.

HCW Biologics Inc.

Condensed Statements of Changes in Stockholders’ Equity (Deficit)

For the Six Months Ended June 30, 2023 and 2024

(Unaudited)


	Stockholders’ Equity
	Common Stock				Additional Paid-In		Accumulated			Total Stockholders’
	Shares		Amount		Capital		Deficit			Equity
Balance, December 31, 2022		35,876,440	$	3,588	$	82,962,964	$	(45,538,046	)	$	37,428,506
Issuance of Common Stock upon exercise of stock options		10,195		1		1,900		—			1,901
Stock-based compensation		—		—		259,206		—			259,206
Net loss		—		—		—		(5,070,686	)		(5,070,686	)
Balance, March 31, 2023		35,886,635	$	3,589	$	83,224,070

SEC Form 10-Q filed by HCW Biologics Inc.