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Item 9A. Controls and Procedures

2024-04-01 compared with 2023-03-28 · 47 added, 35 removed, 91 unchanged (47% of the section changed)

3 unchanged sentences

Based on this evaluation of our disclosure controls and procedures as of December 31, 2023, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures as of such date are effective at the reasonable assurance level.

The term “disclosure controls and procedures,”

as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

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This Annual Report does not include an attestation report of our registered public accounting firm.

For as long as we remain an “emerging growth company”

as defined in Section 2(a) of the Securities Act of 1933, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, we intend to take advantage of the exemption permitting us not to comply with the requirement that our independent registered public accounting firm provide an attestation on the effectiveness of our internal control over financial reporting.

For as long as we remain an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, we intend to take advantage of the exemption permitting us not to comply with the requirement that our independent registered public accounting firm provide an attestation on the effectiveness of our internal control over financial reporting.

Changes in Internal Control over Financial Reporting

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Item 9B Other Information.

10b5-1 Trading Plans

During the fiscal quarter ended December 31, 2023, none of our officers or directors adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Secured Note Financing

The following information is being included in this Item 9B in lieu of filing such information on a Current Report on Form 8-K under Item 1.01.

Entry into a Material Definitive Agreement and Item 2.03.

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

On March 28, 2024, we entered into a senior secured note purchase agreement (the “Note Purchase Agreement”) with the Purchasers (as defined in the Note Purchase Agreement), pursuant to which we agreed to issue senior secured notes in an aggregate principal amount of $10.0 million (the “Secured Notes”) to certain accredited investors, including unrelated parties as well as officers and directors of the Company, among whom were:

Wong, Founder and Chief Executive Officer, who invested $620,000;

Rebecca Byam, Chief Financial Officer, who invested $220,000;

Winer, member of our Board of Directors, who invested $50,000.

The Note Purchase Agreement sets forth the terms and conditions, including representations and warranties, for our issuance and sale of the Secured Notes to the Purchasers.

We issued an aggregate principal amount of $2.0 million in Secured Notes prior to the issuance of this Annual Report.

The Senior Notes bear interest at a rate of 9% per annum, payable quarterly in arrears, and mature on March 27, 2026 (the “Maturity Date”), on which date the principal balance and accrued but unpaid interest under the Secured Notes shall be due and payable.

The Secured Notes may be prepaid in whole or in part at any time prior to the Maturity Date and are subject to a 5% prepayment penalty (“Premium Amount”).

As a condition to entering into the Note Purchase Agreement, we, Mercedes M.

(“Escrow Agent”), and the Purchasers entered into that certain Escrow Agreement and Pledge Agreement, dated March 28, 2024, pursuant to which we agreed to pledge our equity ownership interest in Wugen, which was equivalent to a 5.6% ownership stake in that company as of December 31, 2023 (the “Pledged Collateral”), to be held and released by Escrow Agent according to the terms of the Escrow Agreement, as security for the Secured Notes.

Upon a qualifying event involving a transaction such as an acquisition, merger or initial public offering in which the Pledged Collateral can be sold or liquidated prior to the Maturity Date, subject to certain limitations (such as a threshold price per share in the case of an initial public offering), we agreed to repay all indebtedness (including accrued interest) related to the Secured Notes plus a Premium Amount (as defined in the Note Purchase Agreement).

Upon an Event of Default (as defined in the Note Purchase Agreement), we will have a thirty (30) day cure period (the “Cure Period”), and if the Event of Default is not so cured at the end of the Cure Period, we are required to distribute the Pledged Collateral to the Purchasers on a pro rata basis, in full satisfaction of the indebtedness evidenced by the Secured Notes.

The issuance of the Secured Notes was exempt from the registration requirements of the Securities Act of 1933, as amended, in accordance with Section 4(a)(2) and/or Regulation 506 promulgated thereunder, as a transaction by an issuer not involving a public offering.

The foregoing descriptions of the Note Purchase Agreement, Senior Notes, Escrow Agreement and Pledge Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the Form of Senior Secured Note Purchase Agreement, Form of Senior Secured Promissory Note, Form of Escrow Agreement and Form of the Pledge Agreement, copies of which are filed as Exhibit 10.17, Exhibit 10.18, Exhibit 10.19 and Exhibit 10.20, respectively, to this Annual Report and are incorporated herein by reference.

Item 9C Disclosure Regarding Foreign Jurisdictions That Prevent Inspections .

1 unchanged sentence

Item 10 Directors, Executive Officers and Corporate Governance.

The information required by this item is included under the captions “Board of Directors and Corporate Governance,”

“Proposal One:

Election of Directors,”

“Executive Officers”

and “Delinquent Section 16(a) Reports”

included in our definitive Proxy Statement for the 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2022, and is incorporated herein by reference.

The information required by this item is included under the captions “Board of Directors and Corporate Governance,” “Proposal One:

Director Election,” “Executive Officers” and “Delinquent Section 16(a) Reports” included in our definitive Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2023, and is incorporated herein by reference.

Our board of directors has adopted a Code of Conduct and Ethics applicable to all officers, directors, and employees, which is available on our website (https://investors.hcwbiologics.com/) under “Governance.” We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of our Code of Conduct and Ethics by posting such information on the website address and location specified above.

Item 11 Executive Compensation.

The information required by this item is included under the captions “Board of Directors and Corporate Governance”

and “Executive Compensation”

in our definitive Proxy Statement for the 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2022, and is incorporated herein by reference.

The information required by this item is included under the captions “Board of Directors and Corporate Governance” and “Executive Compensation” in our definitive Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2023, and is incorporated herein by reference.

Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this item is included under the captions “Equity Compensation Plan Information”

and “Security Ownership of Certain Beneficial Owners and Management”

The information required by this item is included under the captions “Equity Compensation Plan Information” and “Security Ownership of Certain Beneficial Owners and Management” in our definitive Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2023, and is incorporated herein by reference.

Item 13 Certain Relationships and Related Transactions, and Director Independence.

The information required by this item is included under the captions “Board of Directors and Corporate Governance”

and “Certain Relationships and Related Party Transactions”

in our definitive Proxy Statement for the 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2022 and is incorporated herein by reference.

The information required by this item is included under the captions “Board of Directors and Corporate Governance” and “Certain Relationships and Related Party Transactions” in our definitive Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2023 and is incorporated herein by reference.

Item 14 Principal Accounting Fees and Services.

The information required by this item is included under the caption “Proposal Two:

Ratification of Appointment of Independent Registered Public Accounting Firm”

The information required by this item is included under the caption “Proposal Two:

Ratification of Appointment of Independent Registered Public Accounting Firm” in our definitive Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the year ended December 31, 2023, and is incorporated herein by reference.

Item 15 Exhibits, Financial Statement Schedules.

(a)(1) Financial Statements

The information concerning HCW Biologics’

audited financial statements and the Report of Independent Registered Public Accounting Firm required by this Item 15(a)(1) is incorporated by reference herein to the section of this Annual Report, Item 8, titled, “Financial Statements and Supplementary Data.”

The information concerning HCW Biologics’ audited financial statements and the Report of Independent Registered Public Accounting Firm required by this Item 15(a)(1) is incorporated by reference herein to the section of this Annual Report, Item 8, titled, “Financial Statements and Supplementary Data.”

(a)(2) Financial Statement Schedules

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and Cogent Bank, dated August 15, 2022

Form of Subscription Agreement, dated February 20, 2024, by and between the Company and the Subscribers party thereto

Form of Senior Secured Note Purchase Agreement, dated March 28, 2024, by and between the Company and the Purchaser party thereto

Form of Senior Secured Promissory Note, dated March 28, 2024, by and between the Company and the Holder party thereof

Form of Pledge Agreement, dated March 28, 2024, by and between the Company, Escrow Agent and Noteholder party thereto

Form of Escrow Agreement, dated March 28, 2024, by and between the Company, Escrow Agent and Noteholder party thereto

Consent of Independent Registered Public Accounting Firm

Power of Attorney (incorporated by reference to the signature page of this Annual Report on Form 10-K)

Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and Rule 15d-14(a) of the Exchange Act

4 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

HCW Biologics Inc.

Compensation Recovery Policy

Inline XBRL Instance Document

5 unchanged sentences

Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Furnished and not filed.

+ Indicates a management contract or compensatory plan or arrangement.

The schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2).

The Registrant agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon its request.

Certain information in this document has been excluded pursuant to Item 601(b)(10) of Regulation S-K.

1 unchanged sentence

The Registrant agrees to furnish supplementally such information to the SEC upon request.

# Certain information in this document has been excluded pursuant to Item 601(a)(5) or (a)(6) of Regulation S-K.

The Registrant agrees to furnish supplementally such information to the SEC upon request.

Item 16 Form 10-K Summary

1 unchanged sentence

HCW Biologics Inc.

March 28, 2023

April 1, 2024

Founder and Chief Executive Officer

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Founder, Chief Executive Officer

March 28, 2023

April 1, 2024

(Principal Executive Officer)

1 unchanged sentence

Chief Financial Officer

March 28, 2023

April 1, 2024

(Principal Financial and Accounting Officer)

Chairperson of the Board of Directors

March 28, 2023

April 1, 2024

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures