What changed in this filing

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Item 1. Financial Statements

2025-08-18 compared with 2025-05-15 · 324 added, 189 removed, 339 unchanged (60% of the section changed)

15 unchanged sentences

Total current liabilities

Contingent liability - related party

Total liabilities

6 unchanged sentences

250,000,000 shares

authorized and 44,934,120 shares issued at March 31, 2025

authorized and 2,146,601 shares issued at June 30, 2025

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Cost of revenues

2 unchanged sentences

General and administrative

Legal expenses, net

Legal expenses (recoveries), net

Nonoperating loss

Total operating expenses

1 unchanged sentence

Interest expense

Unrealized gain on investment

Other income, net

Equity dividend to investor

Net loss attributable to Common Stockholders

Net loss per share, basic and diluted

3 unchanged sentences

Condensed Statements of Changes in Stockholders’ Equity (Deficit)

For the Three Months Ended March 31, 2024 and 2025

Stockholders’ Equity

For the Six Months Ended June 30, 2024 and 2025

Stockholders’ Equity (Deficit)

Stockholders’

Equity (Deficit)

Balance, January 1, 2024

3 unchanged sentences

Balance, March 31, 2024

Issuance of Common Stock upon exercise of stock options

Stock-based compensation

Balance, June 30, 2024

Stockholders’ Deficit

8 unchanged sentences

( 102,753,012

Issuance of Common Stock

Issuance of pre-funded warrants

Issuance of common stock warrants

Exercise of pre-funded warrants

Issuance cost of Common Stock

Issuance cost of pre-funded warrants

Issuance cost of common stock warrants

Equity dividend to investor

Issuance of Common Stock to extinguish restructured debt

Issuance of common stock warrants to extinguish restructured debt

Gain on conversion of debt with related parties, net

Stock-based compensation

Adjustment for reverse stock split

Balance, June 30, 2025

( 104,680,742

See accompanying notes to the unaudited condensed interim financial statements.

1 unchanged sentence

Condensed Statements of Cash Flows

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Depreciation and accretion

Stock-based compensation

Commitment fee

Unrealized gain on investment

Loss on conversion of debt with related parties

Changes in the carrying amount of right-of-use asset

7 unchanged sentences

Purchases of property and equipment

Net cash used in investing activities

Net cash (used in) provided by investing activities

Cash flows from financing activities:

Proceeds from issuance of Common Stock

Proceeds from issuance of debt, net

Issuance costs for common stock

Proceeds from issuance of pre-funded warrants

Proceeds from issuance of debt

Issuance costs for Common Stock and pre-funded warrants

Debt repayment

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents

Net cash provided by financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at the beginning of the period

2 unchanged sentences

Cash paid for interest, net of amounts capitalized

Noncash operating, investing and financing activities:

Noncash investing activities:

Capital expenditures accrued, but not yet paid

Purchases of property and equipment included in accounts payable and other

Noncash financing activities:

Extinguishment of restructured debt

Issuance of Common Stock, warrants and other rights upon extinguishment of restructured debt

Gain on extinguishment of debt with related parties

Equity dividend to investor

See accompanying notes to the unaudited condensed interim financial statements.

11 unchanged sentences

The Common Stock commenced trading on a reverse split-adjusted basis when the markets opened on April 11, 2025, under the existing trading symbol “HCWB.”

The stockholders approved two other proposals at the Special Meeting, including approval of the use of an equity line of credit up to $ 40.0 million and the principal terms for the conversion of up to $ 6.6 million of the outstanding principal of Secured Notes.

The condensed interim financial statements included in this Quarterly Report on Form 10-Q for the period ended March 31, 2025 contained herein, are presented without giving effect to the Reverse Stock Split, except where the context otherwise requires.

Subsequent Events.

In addition to the Reverse Stock Split, the stockholders approved two other proposals at the Special Meeting:

(1) use of our equity line of credit to raise up to $ 40.0 million through sales of shares of the Company’s Common Stock thereunder and (2) execution of the principal terms for the conversion of up to approximately $ 6.9 million of the outstanding principal of Secured Notes into shares of Common Stock.

All authorized, issued, and outstanding shares of common stock, preferred stock, stock option awards, and per share data included in these financial statements have been recast to give retrospective effect to the adjusted authorized shares and Reverse Stock Split for all periods presented.

The Reverse Stock Split did not have any effect on the stated par value of the Company’s Common Stock or the rights and privileges of the holders of shares of Common Stock.

Options, warrants and convertible securities outstanding immediately prior to the Reverse Stock Split were appropriately adjusted to reflect the Reverse Stock Split.

Liquidity and Going Concern

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The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.

As of March 31, 2025, the Company had not generated any revenue from commercial product sales of its internally developed immunotherapeutic products for the treatment of cancer and other age-related diseases.

As of June 30, 2025, the Company had not generated any revenue from commercial product sales of its internally developed immunotherapeutic products for the treatment of cancer and other age-related diseases.

During its development activities, the Company has sustained operating losses, experienced negative operating cash flows and negative working capital position and it expects to continue to incur operating losses for the foreseeable future.

Since inception to March 31, 2025, the Company incurred cumulative net losses of $ 100.0 million.

These losses reflect the events previously reported in the Form 10-K/A filed on May 15, 2024 with the Securities and Exchange Commission (“SEC”), involving reserve for credit losses and other expenses of $ 6.6 million.

The reserve for credit losses and other expenses arose from two events previously reported by the Company on the Form 8-K filed on January 12, 2024 and the Form 8-K filed on May 1, 2024.

Since inception to June 30, 2025, the Company incurred cumulative net losses of $ 102.0 million.

These losses reflect a $ 5.3 million res erve for credit losses and a $ 1.3 million nonoperating losses reported in prior periods.

To date, the Company has funded operations primarily through the sale of stock and warrants, issuance of Secured Notes and other debt, and revenues generated from the Company’s exclusive worldwide licenses and its development supply agreement with Wugen Inc.

(“Wugen”), pursuant to which Wugen licensed limited rights to develop, manufacture, and commercialize cell-based therapy treatments for cancer based on two of our internally-developed, multi-cytokine fusion protein molecules, HCW9201 and HCW9206.

In the quarter ended June 30, 2025, the Company agreed to a request from Wugen to suspend the Wugen License, including Wugen’s clinical trial due diligence obligations and its obligation to pay up to $ 500,000 annually to reimburse the Company for certain R&D expenses.

The suspension will run for a period of one year from the effective date and will end on May 29, 2026.

During the suspension, the Company has the exclusive right to seek alternate licensees and terminate the license in order to enter other business development transactions related to the ex vivo use of the licensed molecules.

In the quarter ended June 30, 2025, WY Biotech Co., Ltd.

(“WY Biotech”) notified the Company that it had completed its due diligence and review of the technical report delivered by the Company and elected to proceed with next steps pursuant to the exclusive worldwide license agreement between WY Biotech and the Company with respect to development and commercialization of one of HCWB’s preclinical product candidates, HCW11-006, for in vivo applications (as amended, the “WY Biotech License”).

As a result, WY Biotech is financially obligated to the Company, as detailed in the WY Biotech License, as amended, including the obligation to pay a $ 7.0 million upfront license fee.

WY Biotech is in the process of finalizing agreements with its contract development and manufacturing organization (“CDMO”) and investors.

Since the Company has no payment history with WY Biotech, it did not recognize the upfront license fee as revenue as we concluded collectability was not probable.

In order to accommodate WY Biotech’s timing in finalizing agreements, the Company and WY Biotech agreed to extend the latest date for payment of the $ 7.0 million license fee to September 30, 2025 .

During the period ended June 30, 2025, the Company extinguished $ 7.7 million of debt through restructuring or conversion of debt.

This was accomplished by restructuring $ 7.4 million of Secured Notes, including accumulated accretion of a fixed bonus payable upon Maturity Date, through the Second Amendment to the Amended and Restated Note Purchase Agreement and converting $ 270,000 of unsecured promissory notes according to the terms of the purchase agreement.

Both transactions include the right to a portion of the proceeds received on the liquidation or sale of the Wugen shares, if such an event occurs.

The Company maintains ownership of the Wugen shares included in these transactions and has recorded a contingent liability to account for the right to receive proceeds upon liquidation or sale of the Wugen shares.

The noteholders for this debt consisted of officers, directors and other significant stockholders.

Due to the related party nature of the converting noteholders, the gain on restructuring and loss on conversion were recorded to additional paid-in capital for the period ended June 30, 2025.

On August 15, 2022, the Company entered into a loan and security agreement (the “2022 Loan Agreement”) with Cogent Bank, pursuant to which it received $ 6.5 million in proceeds to purchase a property at which the Company planned to build a facility to manufacture biologics and upgrade its research laboratory facilities.

The loan is secured by a first priority lien on the property.

As of March 31, 2025, certain subcontractors had filed mechanics liens related to unpaid invoices issued in connection with construction of the Company’s new manufacturing facilities and upgraded research laboratories.

As of June 30, 2025, certain subcontractors had filed mechanics liens related to unpaid invoices issued in connection with construction of the Company’s new manufacturing facilities and upgraded research laboratories.

The 2022 Loan Agreement contains a provision for a discretionary default in the event that the Company fails to pay sums due in connection with construction of any improvements;

however, as of the reporting date, the lender has not elected to do so.

As of March 31, 2025, the Company has reflected this loan as Short-term debt, net, to reflect that the lender has the right to accelerate the loan under a discretionary default provision.

As of June 30, 2025, the Company has reflected this loan as Short-term debt, net, to reflect that the lender has the right to accelerate the loan under a discretionary default provision.

On January 22, 2025, the Company entered into a forbearance agreement with BE&K Building Group (“BE&K”), its general contractor, to allow the Company until March 31, 2025 to continue efforts to find the financing required to complete the construction and renovation of the property.

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In addition, on April 28, 2025, the Company received a summons and a copy of a complaint filed by Fisk Electric Company (which is a defendant in the BE&K Complaint) in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida (the “Fisk Complaint”) against the Company, BE&K, and the other defendants in the BE&K Complaint.

The Company intends to respond in a timely fashion to the BE&K and Fisk Complaints and cross-claims.

To date, the Company has funded operations primarily through the sale of stock, issuance of Senior Notes and other debt, and revenues generated from the Company’s exclusive worldwide license with Wugen, Inc.

(“Wugen”), pursuant to which Wugen licensed limited rights to develop, manufacture, and commercialize cell therapy treatments for cancer based on two of the Company’s internally-developed multi-cytokine fusion protein molecules, and its manufacturing and supply arrangement with Wugen.

In the three months ended March 31, 2024 and 2025, the Company recognized revenues generated from the supply of clinical and research grade material to Wugen of $ 1.1 million and $ 5,065 , respectively.

As reported in the Company’s Form 8-K filed on July 18, 2024 and further described in Part II, Item 1.

– “Legal Proceedings” below, as of July 13, 2024, the Company and Dr.

On August 8, 2025, B&I Contractors, Inc., one of the defendants in the BE&K Complaint, filed a motion for summary judgment (the “MSJ”) as to the Count I (Foreclosure of Construction Lien).

The Company has responded to the BE&K and Fisk Complaints and cross-claims and intends to file a timely response to the B&I MSJ.

As of July 13, 2024, the Company and Dr.

Wong, the Company’s Founder and Chief Executive Officer, entered into a confidential Settlement Agreement and Release (the “Settlement Agreement”) with ImmunityBio and its affiliates.

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With the execution of the Settlement Agreement, the Company resolved the attendant uncertainties for the outcome of the Arbitration and additional complexities, and it launched its new financing plan.

In the accompanying condensed balance sheet as of March 31, 2025, the Com pany reported a balance of $ 12.4 million for legal fees incurred but not yet paid that were included within Accounts payable and an accrual of $ 10,000 for accrued legal fees within Accrued liabilities and other current liabilities.

The Company is engaged in discussions with the law firms involved with this matter to arrange a reasonable payment plan with respect to those legal fees.

In the three months ended March 31, 2025, the Company received a $ 2.0 million insurance payment, which was paid directly to the law firm who represented Dr.

In the accompanying condensed balance sheet as of June 30, 2025, the Com pany reported a balance of $ 12.3 million for legal fees incurred but not yet paid that were included within Accounts payable and an accrual of $ 8,000 for accrued legal fees within Accrued liabilities and other current liabilities.

The Company is engaged in discussions with the law firms involved wi th this matter to arrange a reasonable payment plan with respect to those legal fees.

In the six months ended June 30, 2025, the Company received a $ 2.0 million insurance payment, which was paid directly to the law firm who represented Dr.

Wong for his defense during the Arbitration.

The insurance payment is reported within Legal expenses, net in the condensed interim statement of operations.

In multiple closings that occurred from March to October 2024, the Company issued an aggregate of $ 6.9 million in Secured Notes, which are secured by the Company’s shares of Wugen common stock.

The Company’s holdings in Wugen common stock are reported within Investments on the accompanying condensed interim financial statements.

The holders of $ 6.6 million of the outstanding principal for the Secured Notes agreed to Principal Terms for the conversion into shares of the Company’s common stock, par value $ 0.0001 (“Common Stock”), which were approved by the stockholders of the Company at the Special Meeting.

On May 1, 2025, the converting holders of Secured Notes entered into the Second Amendment to Amended and Restated Senior Secured Note Purchase Agreement and Related Agreements to effect the conversion.

The conversion occurred on May 7, 2025.

Subsequent Events.

Since that time, the Company has issued $ 11.9 million through issuance of equity securities.

In November 2024, the Company raised gross proceeds of $ 6.9 million in a registered direct offering and a concurrent private placement of common stock and warrants.

The offering, priced above market under Nasdaq rules and closed on November 20, 2024.

On May 15, 2025, the Company closed an equity offering with gross proceeds of $ 5.0 million.

As the Company disclosed in the Form 8-K filed on March 19, 2025, the Company and WY Biotech Co., Ltd.

(“WY Biotech”) agreed on the principal terms for an amendment to the WY Biotech License Agreement, an exclusive worldwide license agreement with WY Biotech for the rights to develop and commercialize one of HCWB’s preclinical product candidates, HCW11-006, for in vivo applications (the “Agreement”).

Under the amended terms, the parties agreed to restructure the payment schedule for the $ 7.0 million upfront license fees, including delaying the initial $ 4.0 million portion thereof that was originally due on or about March 17, 2025 .

There were no other material changes to the Agreement.

In particular, the Company will retain the Opt-In Right thereunder, which gives the Company the option to assume all control and responsibility for the development, manufacture and commercialization of HCW11-006 for in vivo applications in the North America, South America, and Central America.

The Company retains ex vivo rights.

The Company completed its performance obligation to deliver a report on the characterization of the licensed molecule on May 13, 2025 .

As agreed under the amended terms, WY Biotech has 30 days to study this report and elect whether to continue with the Agreement, as which time the Agreement will be binding and the full $ 7.0 million upfront license fee will be due.

On February 20, 2025 , the Company entered into an Equity Purchase Agreement (the “ELOC Purchase Agreement”) and a related Registration Rights Agreement with Square Gate Capital Master Fund, LLC - Series 4 (the “Investor”), pursuant to which the Company will have the right, but not the obligation, to sell to the Investor, and the Investor will have the obligation to purchase from the Company, up to $ 20.0 million (the “Maximum Commitment Amount”) worth of the Company’s shares of Common Stock, at the Company’s sole discretion, over the next 36 months (the “Put Shares”), subject to certain conditions precedent and other limitations.

On March 12, 2025, the Company issued 384,615 shares of the Company’s Common Stock (subject to adjustment for the Reverse Stock Split) to the Investor in payment of the Commitment Fee (“Commitment Shares”).

At the Special Meeting, stockholders approved the Company’s use of the ELOC Purchase Agreement.

The insurance payment is reported within Legal expenses, net in the condensed interim statement of operations for the six months ended June 30, 2025.

With the ability to approach the equity markets post Settlement, the Company raised gross proceeds of $ 11.9 million through the issuance of equity securities in two offerings to the same intuitional investor who was the sole investor in both financings (the “Investor”).

The first financing occurred on November 18, 2024, when the Company raised gross proceeds of $ 6.9 million in a registered direct offering and a concurrent private placement of common stock and warrants.

This offering priced above market under Nasdaq rules and closed on November 20, 2024.

The second financing occurred pursuant to a purchase agreement entered into on May 13, 2025, when the Company raised gross proceeds of $ 5.0 million in a follow-on public offering of common stock and warrants.

This offering priced at the market under Nasdaq rules and closed on May 15, 2025.

Contemporaneously with the May 2025 financing, the Company entered into an agreement with the Investor to set a new exercise price, of $ 7.45 per share, with respect to certain Common Stock Warrants to purchase 167,925 shares of the Company’s Common Stock which were issued in November 2024.

Sale of Common Stock and Warrants .

Prior to the May 2025 financing, the Company obtained bridge financing in the form of a $ 150,000 promissory note, guaranteed by securities held by the Company’s Founder and Chief Executive Officer, and in the form of a $ 270,000 unsecured promissory note which converted to equity on May 15, 2025 according to the provision of the loan documents.

On February 20, 2025 , the Company entered into an Equity Purchase Agreement and a related Registration Rights Agreement with Square Gate Capital Master Fund, LLC - Series 4 (“Square Gate”), pursuant to which the Company will have the right, but not the obligation, to sell to Square Gate, and Square Gate will have the obligation to purchase from the Company, up to $ 20.0 million (the “Maximum Commitment Amount”) worth of the Company’s shares of Common Stock, at the Company’s sole discretion, over the next 36 months (the “Put Shares”), subject to certain conditions precedent and other limitations.

On April 16, 2025, the U.S.

Securities and Exchange Commission (“SEC”) declared a registration statement effective to register the Commitment Shares and shares required to sell up to $ 40.0 million of the Company’s shares to the Investor, according to provisions of the ELOC Purchase Agreement.

In addition, this registration statement also registered the underlying shares for the warrant issued in November 2024, which gives the holder the right to exercise the warrant for 6,717,000 shares of common stock at an exercise price of $ 1.03 per share (subject to adjustment for the Reverse Stock Split).

On March 3, 2025, the Nasdaq Hearings Panel (the “Panel”) of The Nasdaq Stock Market LLC (“Nasdaq” or the “Exchange”) granted the Company an extension in which to regain compliance with all Nasdaq continued listing rules for the Capital Markets tier.

The Panel’s determination follows a hearing on February 13, 2025, at which the Panel considered the Company’s plan to regain compliance with Listing Rules 5450(a)(1), 5450(b)(2)(A) and 5450(b)(2&3)(C), the minimum bid price (“Bid Price”), the market value of publicly held securities (“MVPHS”) and the market value of listed securities (“MVLS”) rules, respectively.

As a result of the extension and a clarifying amendment that the Company received on April 8, 2025, the Panel granted the Company’s request for continued listing on the Exchange on the Capital Markets tier, provided that the Company demonstrates compliance with the Bid Price Rule by April 28, 2025, and all other Exchange continued listing rules by June 16, 2025.

As of the date of issuance of this Quarterly Report, the Company has completed several elements of its compliance plan to regain and maintain compliance with all Nasdaq Listing Rules.

On March 31, 2025, there was a Special Meeting of the Stockholders of the Company, at which three matters were put to a vote, and all three proposals were approved, as noted below.

Each proposal represented a critical element in the Company’s plan to regain compliance with all Listing Rules for the Nasdaq Exchange.

On May 13, 2025, the Company received a letter from Nasdaq confirming that the Company has regained compliance with the Bid Price Rule, the public float requirement in Listing Rule 5550(a)(4) and the MVPHS Rule, as required by the Nasdaq Panel decision of April 8, 2025, as amended.

The Company remains subject to the remaining terms of the Panel’s April 8, 2025, decision to provide an extension to the compliance period for other Listing Rules.

Since December 31, 2024, the Company completed the following transactions in furtherance of regaining compliance with the Nasdaq Listing Rule for the market value of listed securities under the alternative measure based on a minimum balance in stockholders’ equity:

• An increase of $ 2.0 million on January 14, 2025, upon receipt of a $ 2.0 million insurance reimbursement for legal fees incurred for the defense of Dr.

Wong, the Company’s Founder and Chief Executive Officer, in connection with the Arbitration.

• Access to up to $ 40.0 million through the ELOC Purchase Agreement.

On February 20, 2025, the Company entered into the ELOC Purchase Agreement;

and with a registration statement effective as of April 16, 2025, the Company may access up to $ 40.0 million of capital through the sale of stock to the Investor under the terms of the ELOC Purchase Agreement.

The Company has not issued any shares under the ELOC Purchase Agreement as of the date of issuance of this Quarterly Report.

• On April 17, 2025, the Company formally applied to move to the Nasdaq Capital Markets tier, thus we will refer to the Listing Rules for that tier for the compliance with all Listing Rules.

• The Company completed the conversion of $ 6.6 million of the outstanding principal of the Secured Notes.

Participating noteholders converted their outstanding principal into shares of the Company’s Common Stock at a conversion price of $ 0.65 per share (post-split, $ 26.00 per share), received warrants that may be exercised for a period of five years to purchase $ 3.3 million of Common Stock at an exercise price of $ 0.65 per share (post-split, $ 26.00 per share), and rights to receive their pro rata shares of 49.1 % of the proceeds of the liquidation of the Company’s Wugen shares, if such an event occurs.

• On May 15, 2025, the Company closed an equity offering with gross proceeds of $ 5.0 million through a follow-on offering of an aggregate of 671,140 units at a purchase price of $ 7.45 per unit priced at-the-market under Nasdaq rules.

Each unit consisted of one share of Common Stock or one Pre-Funded Warrants to purchase one share of Common Stock, with two warrants, each of which can be exercised for one share of Common Stock for $ 7.45 per share.

In addition, the Company entered into a privately negotiated agreement with the holder of certain existing outstanding warrants to purchase up to 167,925 shares of common stock (the “Existing Warrants”) to reduce the exercise price of such Existing Warrants from $41.20 per share to $7.45 per share.

As of March 31, 2025, the conclusion of a going concern assessment, before consideration of our financing plans, was that there is substantial doubt about the Company’s ability to continue as a going concern.

Securities and Exchange Commission (“SEC”) declared a registration statement effective to register shares required to sell up to $ 40.0 million of the Company’s shares to Square Gate, according to provisions of the Equity Purchase Agreement.

Standby Equity Purchase Agreement.

On June 26, 2025, the Company announced that it received formal notice from Nasdaq that the Company was in compliance with Listing Rule 5550(b)(1) (the “Equity Rule”).

On May 13, 2025, the Company received formal notice from Nasdaq that it regained compliance with the bid price requirement in Listing Rule 5550(a)(2), the public float requirement in Listing Rule 5550(a)(4), and the market value of publicly held shares requirement in Listing Rule 5550(a)(5).

As a result, the Company is in compliance with all applicable criteria for continued listing on the Nasdaq Capital Market tier, and the previously disclosed listing compliance matters have been closed.

The Company was also notified that it will remain subject to a “Panel Monitor,” as that term is defined in Nasdaq Listing Rule 5815(d)(4)(B), for a period of one year from the date of the Nasdaq notice, through June 23, 2026.

If, during the term of the Panel Monitor, the Company does not continue to remain in compliance with the Equity Rule, the Company will not be provided with the opportunity to submit a compliance plan for review by the Listing Qualifications Staff and must instead request a hearing before the Panel to address the deficiency, with such request staying any further action with respect to the Company’s listing on Nasdaq pending completion of the hearing process.

As of June 30, 2025, the conclusion of a going concern assessment, before consideration of our financing plans, was that there is substantial doubt about the Company’s ability to continue as a going concern.

Future financial transactions planned in the next twelve months consist of business development transactions for out licenses and corporate partnering, as well as the sale of Common Stock through Put Shares to Square Gate under the Equity Purchase Agreement.

The Company considered future elements of its financing plan that were probable and likely to be implemented within the next year to determine if financing activities currently underway are sufficient mitigate the substantial doubt in the going concern analysis, in addition to considering continued operating losses and the burden of obligations for expenses incurred in connection with past legal proceedings.

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Unaudited Interim Financial Information

The accompanying unaudited condensed interim financial statements as of March 31, 2025 and for the three-month periods ended March 31, 2024 and 2025 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

The accompanying unaudited condensed interim financial statements as of June 30, 2025 and for the three and six-month periods ended June 30, 2024 and 2025 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) for interim financial information and pursuant to Article 10 of Regulation S-X of the Securities Act of 1933, as amended (the “Securities Act”).

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These unaudited condensed interim financial statements include only normal and recurring adjustments that the Company believes are necessary to fairly state the Company’s financial position and the results of its operations and cash flows.

The results for the three-month period ended March 31, 2025 are not necessarily indicative of the results expected for the full fiscal year or any subsequent interim period.

The results for the three and six-month periods ended June 30, 2025 are not necessarily indicative of the results expected for the full fiscal year or any subsequent interim period.

The condensed interim balance sheet at December 31, 2024 has been derived from the audited financial statements at that date but does not include all disclosures required by U.S.

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The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

To date, the Company's revenues have been generated exclusively from the Wugen License, which consists of licenses of intellectual property, cost reimbursements, upfront signing fees, milestone payments and royalties on future licensee’s product sales.

To date, the Company's revenues have been generated exclusively from the Wugen License.

The Wugen License consists of licenses of intellectual property, cost reimbursements, upfront signing fees, milestone payments and royalties on future licensee’s product sales.

In addition, the Company and Wugen have an agreement for the supply of clinical and research grade materials under which the Company also recognized revenues.

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For each in process SOW, amounts are billed in the same quarter the costs are incurred.

For the three months ended March 31, 2024 and March 31, 2025, the Company recogni zed $1.1 million and $ 5,065 in re venue, respectively, all of which is related to sale of development supply materials to our licensee, Wugen.

The Company holds a minority interest in Wugen which is accounted for using the measurement alternative whereby the investment is recorded at cost less impairment, adjusted for observable price changes in orderly transactions for an identical or similar investment of the same investee.

For the three months ended June 30, 2024 and June 30, 2025, the Company recogni zed $ 618,854 and $ 6,550 in re venue, respectively, related to sale of development supply materials to the Company’s licensee, Wugen.

In the six months ended June 30, 2024 and June 30, 2025, the Company recognized $ 1.7 million and $ 11,615 in revenue, respectively, related to sale of clinical materials to Wugen.

In the three months ended June 30, 2025, the Company agreed to Wugen’s request to suspend the Wugen License for a period of one year, ending on May 29, 2026.

The Company holds a minority equity interest in Wugen.

Prior to the current reporting period as of June 30, 2025, the Company accounted for the Wugen shares using the measurement alternative whereby the investment is recorded at cost less impairment, adjusted for observable price changes in orderly transactions for an identical or similar investment of the same investee.

No impairment has been recognized.

As of March 31, 2025 and December 31, 2024, the Company included $ 1.6 million for the investment in Wugen in Investments in the accompanying condensed interim balance sheets.

The Company used its equity interest in Wugen to collateralize the Secured Notes.

Subsequent to March 31, 2025, the Company transferred some of its rights to receive proceeds from the sale or liquidation of Wugen shares, if such an event occurs.

Subsequent Events.

With support provided by a third-party valuation advisor for the valuation of the shares, during the current reporting period as of June 30, 2025, the Company elected to measure its investment at fair value.

The Company will remeasure the change in fair value of the Wugen shares in subsequent reporting periods and recognize the change in earnings.

As of December 31, 2024 and June 30, 2025, the Company included $ 1.6 million and $ 3.3 million, respectively, for its investment in Wugen in Investments in the accompanying condensed interim balance sheets.

For further discussion of the impact of the fair value measurement for the investment in Wugen, see Note 3.

Debt, net - “Troubled Debt Restructuring” and “Contingent Liability.”

The Company invests excess cash in bills and notes issued by the U.S.

Treasury which are classified as trading securities.

As of December 31, 2024 and March 31, 2025 , the Company had no Short-term investments.

As of December 31, 2024 and June 30, 2025 , the Company had no Short-term investments.

Operating Leases

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For diluted net loss per share, the weighted-average number of shares of common stock is the same for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive.

Standby Equity Purchase Agreement

The Company entered an Equity Purchase Agreement providing for an equity line of credit with an investor on February 20, 2025.

This arrangement is in the nature of a Standby Equity Purchase Agreement (“SEPA”), which is an equity-linked instrument for which an entity has the right, but not the obligation, to sell the entity’s common stock to third-party investors over a specified period.

The total number of shares that the entity may issue to the investor is capped by either an aggregate dollar amount or an aggregate number of shares.

Furthermore, the number of shares that an entity may issue at any particular time during the life of the SEPA is also limited.

The price payable by the investor for each share of common stock purchased from the entity is generally discounted.

In exchange for its access to capital through the SEPA, the entity typically provides up-front consideration to the investor in the form of cash or shares of the entity’s common stock.

Economically, before the entity has elected to sell shares, a SEPA represents a purchased put option on the entity’s own equity.

However, once the entity “draws” on the SEPA, the related number of shares issuable constitutes a forward contract to issue common stock.

Thus, a SEPA contains both a purchased put option element and a forward share issuance element.

This generally means that a SEPA generally does not qualify for equity classification.

Accordingly, entities must recognize an asset or liability for its SEPA.

Such asset or liability must be measured at fair value, with changes in fair value recognized in net (loss) income.

Because SEPAs do not qualify for classification in equity, an entity must expense as incurred the amount by which any consideration provided to the investor at the inception of the arrangement exceeds the fair value of the asset recognized for the SEPA.

An entity should recognize at fair value the common shares issued to the investor upon settlement of a SEPA by using the quoted price of the shares on the date of issuance.

The then-current fair value of the asset or liability for the associated forward share issuance contract must be derecognized in conjunction with the settlement.

The proceeds received from the investor are reflected and any residual amount must be charged (or credited) to earnings.

This accounting is consistent with the guidance in ASC 815 that applies upon the settlement of a derivative instrument.

When an equity-linked instrument classified as an asset or liability is settled, entities should measure the instrument at its current fair value as of the settlement date and include in earnings any previously unrecognized fair value gain or loss.

In summary, upon settlement of a forward issuance contract element of a SEPA, an entity would recognize in earnings the following amounts:

• The gain (loss) for the excess (deficit) of (a) the carrying amount of the asset or liability for the forward issuance contract plus the proceeds received and (b) the fair value of the common shares as of the issuance date.

• Any issuance or transaction costs incurred in conjunction with the issuance of the shares.

Accrued Liabilities and Other Current Liabilities

As of December 31, 2024 , the Company had a balance of $ 981,940 included in Accrued liabilities and other current liabilities in the audited condensed balance sheet, consisting of $ 422,000 for construction expenses, $ 49,000 for manufacturing expenses, $ 155,000 for legal fees, $ 121,000 for clinical expenses, $ 5,000 for bonus expense, $ 202,000 for salary expenses and $ 28,000 for other liabilities.

As of March 31, 2025 , the Company had a balance of $ 1.2 million included in Accrued liabilities and other current liabilities in the accompanying condensed interim balance sheet, consisting of $ 422,000 for construction in progress, $ 49,000 for manufacturing expenses, $ 409,000 for legal fees, $ 127,000 for clinical expenses, $ 103,000 for salary and benefits and $ 54,000 for other liabilities.

As of June 30, 2025 , the Company had a balance of $ 1.1 million included in Accrued liabilities and other current liabilities in the accompanying condensed interim balance sheet, consisting of $ 422,000 for construction expenses, $ 87,000 for property taxes, $ 52,000 for manufacturing expenses, $ 193,000 for legal fees, $ 127,000 for clinical expenses, and $ 180,000 for salary expenses.

Cogent Bank Loan

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The loan is secured by a first priority lien on the building.

As of March 31, 2025, the Company had $ 6.3 million in principal outstanding under the 2022 Loan Agreement.

As of June 30, 2025, the Compa ny had $ 6.3 million in principal outstanding under the 2022 Loan Agreement.

The interest-only period was one year followed by 48 months of equal payments of principal and interest beginning on September 15, 2023 based on a 25-year amortization rate.

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Upon the Maturity Date, a final payment of unamortized principal will be due.

The Company is in compliance with covenants related to current payment of principal and interest as of March 31, 2025.

The Company is in compliance with covenants related to current payment of principal and interest as of June 30, 2025.

The Company has the option to prepay the outstanding balance of the loan prior to the Maturity Date without penalty.

As of December 31, 2024 and March 31, 2025, certain subcontractors filed mechanics liens related to unpaid invoices issued in connection with the Company’s construction of its new manufacturing facilities and upgraded research laboratories.

As of December 31, 2024 and June 30, 2025, certain subcontractors filed mechanics liens related to unpaid invoices issued in connection with the Company’s construction of its new manufacturing facilities and upgraded research laboratories.

The 2022 Loan Agreement contains a provision for a discretionary default in the event that the Company fails to pay sums due in connection with construction of any improvements;

however, as of the reporting date, the lender has not elected to do so.

As of December 31, 2024 and March 31, 2025, the Company has reflected this loan as Short-term debt, net, to reflect that the lender has the right to accelerate the loan under a discretionary default provision.

As of March 31, 2025, $ 6.3 million is included in Short-term debt, net in the accompanying condensed interim balance sheet.

As of December 31, 2024 and June 30, 2025, the Company has reflected this loan as Short-term debt, net, to reflect that the lender has the right to accelerate the loan under a discretionary default provision.

Senior Secured Notes

As of March 31, 2024, the Company issued $ 2.0 million of Secured Notes which were classified as non-current liabilities in the accompany condensed interim balance sheet.

Purchasers (as defined in the Note Purchase Agreement) included:

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 , as well as unrelated parties.

As of March 31, 2024, the Company received $ 1.8 million in cash payments for the Secured Notes.

A check payment of $ 250,000 , that has since cleared, is included in Secured note receivable in the accompanying condensed interim balance sheet.

As of March 31, 2025, the Company issued $ 6.9 million of Secured Notes which were classified as non-current liabilities in the accompanying condensed interim balance sheet.

Purchasers included Dr.

Wong, Founder and Chief Executive Officer, who invested $ 2.4 million;

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

Lee Flowers, Senior Vice President of Business Development, who invested $ 25,000 ;

Garrett, the Chairman of the Company’s board of directors, who invested $ 140,000 ;

Winer, a member of our board of directors, who invested $ 60,000 ;

Greene, a member of the board of directors, who invested $ 25,000 , as well as unrelated parties.

As of July 2, 2024, existing investors in Secured Notes unanimously agreed to an Amended and Restated Note Purchase Agreement and related documents (“Amended and Restated Note Purchase Agreement”).

On September 30, 2024, existing investors approved an amendment to the Amended and Restated Note Purchase Agreement which extended the last closing date to October 31, 2024.

No other terms were changed.

Under the terms of the Amended and Restated Note Purchase Agreement, the Secured Notes continue to bear interest at a rate of 9 % per annum, payable quarterly in arrears.

The Secured Notes will mature on August 30, 2026 (the “Maturity Date”), on which date the principal balance, accrued but unpaid interest and other amounts owed under the terms of the Amended and Restated Note Purchase Agreement shall be due and payable.

The Company pledged its equity ownership interest in Wugen, which was equivalent to a 5.6 % ownership stake in that company as of March 31, 2025 (“Pledged Collateral”).

As of June 30, 2025, there was $ 325,000 of outstanding principal amount of Secured Notes reported in Debt, net in the accompanying condensed interim balance sheet.

As of June 30, 2025, the Company restructured $ 6.6 million outstanding principal of Secured Notes by conversion to equity.

On May 1, 2025, those noteholders who elected to convert their outstanding principal to equity entered the Second Amendment to the Amended and Restated Note Purchase Agreement (the “Conversion Agreement”).

On May 7, 2025, $ 6.6 million of outstanding principal amount of Secured Notes were extinguished upon conversion.

See discussion in section “Troubled Debt Restructuring of Secured Notes” below.

Those noteholders who elected not to convert had no change in terms, except for the termination of their conversion feature.

Under the terms of the agreement, the Secured Notes continue to bear interest at a rate of 9 % per annum, payable quarterly in arrears.

The Company pledged its equity ownership interest in Wugen, which was equivalent to a 5.6 % ownership stake in that company as of June 30, 2025 (“Pledged Collateral”).

The Pledged Collateral will be held and released according to the terms of the Escrow Agreement, as security for the Secured Notes.

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In the event of a Mandatory Prepayment, Secured Notes may receive a bonus payment based on the gross proceeds of the sale of the Pledged Collateral.

The agreement also contains default provisions, according to which, following an event of default, the Company may be required to distribute the Pledged Collateral to the Purchasers on a pro rata basis based on a $ 10.0 million issuance of Secured Notes, in full satisfaction of the indebtedness evidenced by the Secured Notes.

If the Secured Notes are repaid on the Maturity Date, holders will receive their pro rata share of a fixed bonus payment of $ 3.4 million in addition to payment of outstanding principal and accrued and unpaid interest.

If a bonus payment is paid, then there is no prepayment penalty.

The Amended and Restated Note Purchase Agreement also contains default provisions, according to which, following an event of default, the Company may be required to distribute the Pledged Collateral to the Purchasers on a pro rata basis based on a $ 10.0 million issuance of Secured Notes, in full satisfaction of the indebtedness evidenced by the Secured Notes.

In the three months ended March 31, 2025, the Company recognized $ 273,059 in expenses for accretion of the fixed bonus payment due in the event the Secured Notes are repaid on the Maturity Date.

On May 7, 2025, certain Purchasers elected to convert $ 6.6 million of outstanding principal into shares of the Company’s Common Stock, warrants to purchase Common Stock and rights to a portion of the Company’s Wugen shares, according to Principal Terms of Conversion approved by the stockholders at the Special Meeting held on March 31, 2025.

Subsequent Events.

In the three and six months ended June 30, 2025, the Company recognized $ 102,248 and $ 375,308 , respectively as an expense for accretion of the fixed bonus payment due in the event the Secured Notes are repaid on the Maturity Date, presented within Depreciation in the accompanying condensed interim statements of operations.

On May 7, 2025, upon conversion of $ 6.6 million of outstanding principal of Secured Notes, accretion of the fixed bonus was terminated for these Secured Notes and the accumulated accretion balance of $ 860,462 was derecognized.

See discussion in section “Troubled Debt Restructuring of Secured Notes” below.

For those Secured Notes which remain outstanding, as of June 30, 2025, the Company reported $ 367,151 for the outstanding principal and accumulated accretion of a fixed bonus payment due upon maturity as a noncurrent liability in Debt, net in the accompanying condensed interim balance sheet.

Troubled Debt Restructuring of Senior Secured Notes

The Company entered into the Second Amendment to its Secured Note in which certain Secured Note noteholders and the Company agreed to the terms to effectively extinguished $ 7.4 million of debt through the issuance of 253,083 shares of Common Stock, warrants to purchase 126,540 shares of Common Stock, and rights to receive a pro rata share of 49.11 % of the proceeds or shares from the Company’s investment in Wugen.

The transaction was accounted for under ASC 470-60 as a troubled debt extinguishment, as the Company was experiencing financial difficulty and it was granted a concession by Secured Note noteholders whereby the fair value of consideration transferred was less than the carrying amount of the Secured Notes.

The net carrying amount of the restructured Secured Notes at the time of the amendment was $ 7.4 million including principal of $ 6.6 million and accumulated accretion of a fixed bonus payable upon Maturity Date of $ 860,462 .

The fair value of consideration transferred including Common Stock, warrants to purchase Common Stock, and rights to proceeds of a portion of the Company’s shares of Wugen common stock was $ 4.0 million, with the difference of $ 3.5 million being recognized as a troubled debt restructuring gain.

Due to the related party nature of the converting noteholders, the gain was recorded to additional paid-in capital for the period ended June 30, 2025.

Unsecured Promissory Notes

As of May 5, 2025, the Company issued a total of $ 270,000 principal amount of unsecured convertible promissory notes that mature on May 5, 2026 with paid in kind interest accruing thereon, payable quarterly in arrears at 10 % per annum (the “Convertible Bridge Notes”).

In accordance with their terms, following the completion of a qualified offering, the Convertible Bridge Notes were converted into shares of our Common Stock at the final offering price in an offering that closed on May 15, 2025.

In addition, holders of the Convertible Bridge Notes have the right to receive a portion of the proceeds of the Company’s shares of Wugen common stock, if and when such shares are ever sold, determined by the number of the Wugen shares equal to 0.25 multiplied by the original principal amount, in dollars, of the Convertible Bridge Notes.

Investors included:

$ 60,000 invested by Hing C.

Wong, the Company’s Founder and CEO;

$ 100,000 invested by Scott T.

Garrett, the Chairman of the Company’s Board of Directors;

and $ 10,000 invested by Gary M.

Winer, who was a member of the Company’s Board of Directors at the time of his investment.

As of May 15, 2025, the outstanding principal of Convertible Bridge Notes were converted.

The fair value of consideration transferred including 36,242 shares of Common Stock and rights to proceeds of a portion of the Company’s shares of Wugen common stock was $ 401,134 , with the difference of $ 131,134 being recognized as a loss on conversion.

Due to the related party nature of the converting noteholders, the loss was recorded to additional paid-in capital for the period ended June 30, 2025.

Promissory Note with Personal Guarantee

On May 8, 2025, the Company issued a promissory note for $ 150,000 , secured by a personal guaranty and pledge given by the Company’s Founder and CEO, Dr.

Wong (“Guarantor”) in accordance with the provisions of that certain Guaranty and Pledge Agreement of even date herewith between the Company and the Holder.

The promissory note was issued with an original issue discount of $ 75,000 .

On the Maturity Date of February 7, 2026 , the Company will repay $ 225,000 .

There are provisions which allow the Company to prepay the promissory note before the Maturity Date.

The proceeds of this promissory note were used to pay the expenses required to be paid prior to the equity financing which closed on May 15, 2025.

The Company is accreting the original issue discount on a straight-line basis over the seven-month term.

There is no current interest due on the promissory note with personal guarantee.

In the three and six months ended June 30, 2025, the Company recognized accretion of original issue discount of $ 0 and $ 14,722 , respectively, in Interest expense in the accompanying condensed interim statements of operations.

Contingent Liabilities

The Company extinguished $ 6.9 million of debt through conversion or restructuring of outstanding principal to shares of the Company’s Common Stock, warrants to purchase the Company’s Common Stock and the right to receive proceeds of a liquidation or sale of a portion of the Company’s Wugen shares.

The Company retained ownership of the Wugen shares allocated to the converted noteholders and recorded a contingent liability for the right to receive proceeds upon liquidation or sale, if such event occurs.

As of June 30, 2025, the Company elected to measure its investment in Wugen at fair value.

Similar to the underlying asset, the Company recognized the contingent liability at fair value and will recognize changes in fair value in subsequent reporting periods in earnings.

As of June 30, 2025, the Company included $ 1.7 million for this contingent liability in the accompanying condensed interim balance sheets.

Sale of Common Stock and Warrants

May 2025 Equity Financing

On May 13, 2025, the Company entered into a securities purchase agreement with a single institutional investor (the “Investor”) for the issuance and sale of (i) 158,000 shares (the “Shares”) of the Company’s Common Stock and (ii) pre-funded warrants to purchase up to 513,140 shares of Common Stock (the “Pre-Funded Warrants”) in a follow- on public offering (the “Offering”), pursuant to a registration statement filed under Rule 424(b)(4) (File No.

333-287136), which was declared effective by the SEC on May 15, 2025.

The Com pany also issued warrants to purchase up to an aggregate of 1,342,280 shares of Common Stock (“Common Stock Warrants”) for $ 7.45 per share.

The Company sold the Common Stock and Pre-Funded Warrants with an accompanying two Common Stock Warrant, each of which may purchase one share of Common Stock, and the Common Stock and Pre-Funded Warrants were immediately separated from the Common Stock Warrants and issued separately.

The combined purchase price for each Share and the two accompanying Common Stock Warrant was $ 7.45 per unit and the combined purchase price for each Pre-Funded Warrant and the two accompanying Common Stock Warrant was $ 7.4999 per unit.

The Common Stock Warrants have an exercise price of $ 7.45 per share, are exercisable immediately, and expire on the five-year anniversary of the date of issuance.

The Pre-Funded Warrants have an exercise price of $ 0.0001 per share, are exercisable immediately, and will not expire until exercised in full.

The gross proceeds to the Company from the Offering were approximately $ 5.0 million before deducting the placement agent’s fees and other offering expenses of $ 802,602 payable by the Company.

The Offering closed on May 15, 2025.

In this financing, the Company issued shares of Common Stock of Pre-Funded Warrants that may be exercised to purchase Common Stock in lieu thereof, and warrants that may be exercised to purchase Common Stock.

In a contemporaneous private agreement entered into with the Investor, the Company agreed to reprice warrants to purchase up to 167,925 shares of Common Stock that were issued to the Investor in a financing that closed on November 20, 2024 to an exercise price of $ 7.45 per share.

The Company estimated the fair value of the securities issued, using the Black Scholes valuation model to estimate the fair value of the warrants, and determined the fair value of securities issued was $ 15.2 million.

As this was a transaction with an existing stockholder, the Company recognized a $ 10.2 million deemed equity dividend to the Investor which was recorded in additional-paid-in capital for the period ended June 30, 2025.

The Investor may not exercise any portion of the Common Stock Warrants or Pre-Funded Warrants to the extent it would beneficially own more than the limits defined in the respective Warrant Purchase Agreement.

The exercise price and number of shares of Common Stock issuable upon the exercise of the Common Stock Warrants and Pre-Funded Warrants are subject to adjustment in the event of any stock dividends and distributions, stock splits, stock combinations or stock reclassifications, as described in the respective warrant agreements.

Under certain circumstances, the warrants may be exercised on a “cashless” basis.

Both the Common Stock Warrants and Pre-Funded Warrants were classified as a component of permanent stockholders’ equity within additional paid-in-capital and were recorded at the issuance date.

The Common Stock Warrants and Pre-Funded Warrants are equity classified because they are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, are immediately exercisable, do not embody an obligation for the Company to repurchase its shares, permit the holders to receive a fixed number of shares of Common Stock upon exercise, are indexed to the Company’s Common Stock and meet the equity classification criteria.

In addition, the Common Stock Warrants and the Pre-Funded Warrants do not provide any guarantee of value or return.

As of June 30, 2025, the Investor exercised all of the Pre-Funded Warrants by delivering a notice of exercise to the Company and paying the exercise price.

As a result, as of June 30, 2025, the Company issued 513,140 shares of registered Common Stock to the Investor.

As of June 30, 2025, no ne of the Common Stock Warrants issued on May 15, 2025 had been exercised.

November 2024 Equity Financing

On November 18, 2024, the Company entered into a securities purchase agreement with the Investor for the issuance and sale of (i) 104,000 shares (the “Shares”) of the Company’s common stock, par value $ 0.0001 per share (the “Common Stock”) and (ii) pre-funded warrants to purchase up to 63,925 shares of Common Stock (the “Pre-Funded Warrants”) in a registered direct offering (the “Registered Offering”), pursuant to a shelf registration statement on Form S-3 (File No.

333-266991), which was declared effective by the SEC on August 26, 2022.

The Registered Offering was made by means of a prospectus supplement filed with the SEC on November 20, 2024 that forms a part of such registration statement.

In a concurrent private placement (the “Private Placement” and together with the Registered Offering, the Company also issued unregistered warrants to purchase up to an aggregate of 167,925 shares of Common Stock (“Common Stock Warrants”) for $ 41.20 per share.

Share amounts and exercise price per share have been adjusted for the reverse stock split the Company effected on April 11, 2025.

The Company sold the Common Stock and Pre-Funded Warrants with an accompanying Common Stock Warrant to purchase one share of Common Stock, and the Common Stock and Pre-Funded Warrants were immediately separated from the Common Stock Warrants and issued separately.

The combined purchase price for each Share and accompanying Common Stock Warrant was $ 41.20 per unit and the combined purchase price for each Pre-Funded Warrant and accompanying Common Stock Warrant was $ 41.1999 per unit.

The Common Stock Warrants have an exercise price of $ 41.20 per share, are exercisable immediately, and expire on the five-year anniversary of the date of issuance.

The Pre-Funded Warrants have an exercise price of $ 0.0001 per share, are exercisable immediately, and will not expire until exercised in full.

The gross proceeds to the Company from the offering were approximately $ 6.9 million before deducting the placement agent’s fees and other offering expenses of $ 638,045 payable by the Company.

It closed on November 20, 2024.

Under certain circumstances, the warrants may be exercised on a “cashless” basis.

Both the Common Stock Warrants and Pre-Funded Warrants were classified as a component of permanent stockholders’ equity within additional paid-in-capital and were recorded at the issuance date.

In addition, the Common Stock Warrants and the Pre-Funded Warrants do not provide any guarantee of value or return.

On November 20, 2024, the Investor exercised all of the Pre-Funded Warrants by delivering a notice of exercise to the Company and paying the exercise price.

The Company issued 63,925 registered shares of Common Stock to the Investor on November 21, 2024.

On April 16, 2025, the 167,925 shares of Common Stock underlying the Common Stock Warrants issued on November 20, 2024 were registered in a registration statement filed pursuant to Rule 424(b)(3) (File No.

On May 15, 2025, the Company entered into a privately negotiated agreement with the Investor for its Common Stock Warrants to reduce the exercise price of such warrants from $ 41.20 per share to $ 7.45 per share.

The Company considered the change in fair value of this modification of the warrant as a deemed dividend to the Investor related to the equity offering that closed in May 2025 with the Investor.

As of June 30, 2025, no ne of the Common Stock Warrants issued on November 20, 2024 and repriced on May 15, 2025 had been exercised.

Preferred Stock

As of December 31, 2024 and March 31, 2025 , the Company had 10,000,000 shares of preferred stock authorized and no shares issued.

As of December 31, 2024 and June 30, 2025 , the Company had 10,000,000 shares of preferred stock authorized and no shares of preferred stock issued.

Net Loss Per Share

The following table summarizes the computation of the basic and diluted net loss per share:

Three Months Ended March 31,

Weighted-average common shares outstanding

Three Months Ended June 30,

Six Months Ended June 30,

Equity dividend to investor

Net loss attributable to Common Stockholders

Weighted-average common shares outstanding, basic and diluted

Net loss per share, basic and diluted

The following table summarizes the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because their inclusion would be anti-dilutive:

The following table summarizes the outstanding potentially dilutive securities.

At June 30, 2024 and 2025, these securities were excluded in the calculation of diluted net loss per share because their inclusion would be anti-dilutive:

Common stock options

Common stock warrants

Potentially dilutive securities

Standby Equity Purchase Agreement

On February 20, 2025 , the Company entered into an Equity Purchase Agreement (the “Equity Purchase Agreement”) with Square Gate Capital Master Fund, LLC - Series 4 (“Square Gate”), which the Company deemed to be a Standby Equity Purchase Agreement (“SEPA”).

Under the Equity Purchase Agreement, the Company will have the right, but not the obligation, to sell to Square Gate, and Square Gate will have the obligation to purchase from the Company, up to $ 20,000,000 (the “Maximum Commitment Amount”) worth of the Company’s shares of common stock, at the Company’s sole discretion, over the next 36 months (the “Put Shares”), subject to certain conditions precedent and other limitations.

Square Gate has covenanted not to cause or engage in any short sales or hedging transactions with respect to the shares of the Company’s common stock.

The Maxim Group LLC acted as the Company’s exclusive Placement Agent in connection with this transaction.

Unless earlier terminated, the Equity Purchase Agreement will remain in effect until the earlier of February 18, 2028 ( i.e ., the expiry of the 36 -month period commencing on the date of the Equity Purchase Agreement) or the date on which Square Gate has purchased the Maximum Commitment Amount (the “Commitment Period”).

The Company has the right to terminate the Equity Purchase Agreement at any time, subject to certain provisions as set forth in the Equity Purchase Agreement.

Square Gate has the right to terminate the Equity Purchase Agreement under certain provisions as set forth in the Equity Purchase Agreement, including the continued listing of the Company's common stock on an Eligible Market.

During the Commitment Period, the Company will have the right, but not the obligation, to direct Square Gate to make a purchase of the Put Shares by delivering written notice (a “Put Notice”) to Square Gate on any trading day (the “Put Date”) to purchase a number of Put Shares pursuant to a formula set forth in the Equity Purchase Agreement.

The number of Put Shares that the Company can issue to Square Gate from time to time under the Equity Purchase Agreement may not exceed 4.99 % of the number of shares of our common stock outstanding immediately after giving effect to the issuance of shares issuable pursuant to a Put Notice.

The per share purchase price for the Put Shares that we elect to sell to Square Gate in a Put Notice pursuant to the Equity Purchase Agreement will be equal to 98 % of the lowest daily VWAP during the Valuation Period (as defined in the Equity Purchase Agreement), in the case of a Valuation Period ending on the date that is at the end of the third trading day immediately following the applicable Put Date.

The Company also agreed to a $ 150,000 commitment fee (the “Commitment Fee”), which shall be in the form of shares of Common Stock to be issued to Square Gate in accordance with the terms of the Equity Purchase Agreement.

The Equity Purchase Agreement and Registration Rights Agreement contain customary representations, warranties and agreements by the Company and customary conditions to Square Gate’s obligation to purchase the Put Shares.

Actual sales of shares of our common stock, if any, to Square Gate under the Equity Purchase Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Company’s common stock and determinations by the Company as to the appropriate sources of funding for the Company and its operations.

The net proceeds to us from sales of our common stock to Square Gate under the Equity Purchase Agreement, if any, will depend on the frequency and prices at which the Company sells shares to Square Gate under the Equity Purchase Agreement.

Any proceeds that the Company receives from sales of shares of our common stock to Square Gate under the Equity Purchase Agreement will be used to advance our clinical development programs and expand our discovery, research and preclinical activities in the near term and in the future.

On March 12, 2025, the Company issued 9,616 shares of the Company’s Common Stock (subject to adjustment for the Reverse Stock Split) to Square Gate in payment of the Commitment Fee (“Commitment Shares”).

At the Special Meeting of Stockholders, stockholders approved the Company’s use of the Equity Purchase Agreement.

On April 16, 2025, the U.S.

Securities and Exchange Commission (“SEC”) declared a registration statement effective to register the Commitment Shares and shares required to sell up to $ 40.0 million of the Company’s shares to Square Gate, according to provisions of the Equity Purchase Agreement.

The Company concluded that the Equity Purchase Agreement does not qualify for equity classification.

On the effective date, the Company concluded that the fair value of the Equity Purchase Agreement at inception was zero and no asset or liability was recorded.

As a result, fees paid to Square Gate in excess of the fair value of the Equity Purchase Agreement were expensed as incurred.

Any issuance costs or other transaction costs attributable to a freestanding equity-linked financial instrument that is classified as an asset or liability should be recognized in earnings in the period incurred.

The Commitment Fee was expensed as of March 31, 2025.

The issuance costs were expensed as of June 30, 2025.

When the Company wishes to draw on the Equity Purchase Agreement, the Company submits a put order to Square Gate on Day 0, issues the shares on Day 1, and the pricing of the transaction is determined from Day 1 – 3 trading days, with the price to be paid by Square Gate fixed by using the minimum trading price in one of the three trading days after the put order is accepted.

Square Gate is required to pay for the Put Shares under the terms of the Equity Purchase Agreement by Day 5.

When there is a lag between the pricing of the shares and the issuance of the shares, the Company will account for the sale as a forward contract and the issuance as a settlement of the forward contract.

The fair value of the Equity Purchase Agreement is zero since inception.

In the three months ended June 30, 2025, the Company expensed $ 48,608 of issuance costs incurred during the period, which are reported within General and administrative expenses in the accompanying condensed interim statements of operations.

In the six months ended June 30, 2025, the Company expensed the $ 150,000 Commitment Fee which was incurred in the period ended March 31, 2025 and $ 148,608 of issuance costs which were incurred in the period ended June 30, 2025.

No draws were made under the Equity Purchase Agreement as of June 30, 2025.

Subsequent to June 30, 2025, the Company made draws on the Equity Purchase Agreement and the Equity Purchase Agreement was amended by mutual agreement to allow for intraday trading.

Subsequent Events.

Fair Value of Financial Instruments

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government-backed securities are measured at fair value based on quoted prices in active markets, which are considered Level 1 inputs.

No transfers between levels occurred during the periods presented.

The following table presents the Company’s assets which were measured at fair value at December 31, 2024 and March 31, 2025:

At December 31, 2024:

The investments and contingent liability included in the balance sheet are measured at fair value based on the adjusted enterprise value method, which is considered Level 3 inputs.

N o transfers between levels occurred during the periods presented.

The following table presents the Company’s assets and liabilities which were measured at fair value at December 31, 2024 and June 30, 2025:

December 31, 2024

Money market funds

At March 31, 2025:

June 30, 2025

Money market funds

The Company computes its quarterly income tax expense/(benefit) by using a forecasted annual effective tax rate and adjusts for any discrete items arising during the quarter.

The Company did no t have a provision for income taxes (current or deferred tax expense) as of December 31, 2024 and March 31, 2025.

Contingent Liability

For the three and six months ended June 30, 2025, The Company computes its quarterly income tax expense/(benefit) by using a forecasted annual effective tax rate and adjusts for any discrete items arising during the quarter.

The Company did not have a provision for income taxes (current or deferred tax expense) as of December 31, 2024 and June 30, 2025.

The Company will continue to maintain a 100% valuation allowance on total deferred tax assets.

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As a result, the Company’s effective tax rate will remain at 0.00% because no items either estimated or discrete items would impact the tax provision.

Subsequent Events for information on the recent One Big Beautiful Bill Act and the potential impacts thereof.

Segment Reporting

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The measure of segment assets is reported on the balance sheet as total assets.

The Company has not generated any product revenue from commercial product sales of internally-developed immunotherapeutic products for the treatment of diseases, as no products have been approved for commercial sale as of March 31, 2025.

The Company expects to continue to incur significant expenses and operating losses for the foreseeable future as it advances molecules through all stages of development and clinical trials and, ultimately, seek approval for commercial sale.

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The assessment of results of preclinical and clinical studies are critical to the allocation of resources by the CODM.

There were no material changes to the measures for segment revenue, profit or loss, and other metrics since December 31, 2024.

The tables below summarizes the significant expense categories regularly reviewed by the CODM for the three months ended March 31, 2024 and March 31, 2025:

There were no material changes to the measures for segment revenue, profit or loss, and other metrics since March 31, 2025.

The tables below summarize the significant expense categories regularly reviewed by the CODM for the three and six months ended June 30, 2024 and June 30, 2025:

Three Months Ended

Six Months Ended

Cost of revenues

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Net segment loss

Professional services consist primarily of audit and accounting advisory services, tax advisory services, corporate legal services related to SEC compliance, and legal fees related to patent filings.

Other segment items include the following unusual or nonrecurring items:

Professional services consist primarily of audit and accounting advisory services, tax advisory services, corporate legal services and other services related to SEC compliance, and legal fees related to patent filings.

Other segment items include the following unusual or nonrecurring item that comprise other segment items for the three and six months ended June 30, 2024 and 2025:

Three Months Ended

Arbitration legal fees, net

Accretion of fixed bonus upon maturity of Senior Notes, net

Six Months Ended

Arbitration legal fees (recoveries), net

Accretion of fixed bonus upon maturity of Secured Notes

Interest expense

Unrealized gain on investment

Nonoperating loss

Other income, net

5 unchanged sentences

On January 27, 2025, the Company entered a new one-year lease for the same location which commenced on March 1, 2025 and terminates on February 28, 2026 .

As a lease of 12 months or less in duration and qualifies for a short-term lease exemption under ASC 842-20-25-2.

The Company elected to account for this lease on a straight-line basis over the lease term and will not recognize a ROU asset and a lease liability as a result.

As a lease of 12 months or less in duration and qualifies for a short-term lease exemption under ASC 842-20-25-2, the Company elected to account for this lease on a straight-line basis over the lease term and will not recognize a ROU asset and a lease liability as a result.

The Company has no obligations under financing leases.

For the three months ended March 31, 2024 and 2025 , rent expense recognized by the Company was $ 47,838 and $ 50,556 , respectively, of which $ 23,453 and $ 26,476 , respectively, are included in research and development in the accompanying condensed interim statements of operations .

For the three months ended June 30, 2024 and 2025 , rent expense recognized by the Company was $ 49,524 and $ 52,619 respectively, of which $ 25,936 and $ 27,557 , respectively, are included in research and development in the accompanying condensed interim statements of operations.

For the six months ended June 30, 2024 and 2025, rent expense recognized by the Company was $ 96,907 and $ 103,175 respectively, of which $ 48,389 and $ 54,033 , respectively are included in research and development in the accompanying condensed interim statements of operations.

Contractual Commitments

The Company has commitments with a third-party manufacturing organization to supply us with clinical grade materials.

As of March 31, 2025, it is under contract for obligatio ns of $ 12,500 it expects to pay during the year ending December 31, 2025.

As of June 30, 2025, it is under contract for obligatio ns of $ 34,200 it expects to pay during the year ending December 31, 2025.

On January 22, 2025, the Company entered into a forbearance agreement with BE&K to allow the Company until March 31, 2025 to continue efforts to find the financing required to complete the construction and renovation of the building.

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The Company has continued to pursue financing alternatives to provide the funding needed to come current in past amounts due and complete the construction and renovation of the property.

Project Financing

On January 10, 2024 (the “Termination Date”), the Company exercised its right to terminate its credit agreement (the “Credit Agreement”), dated April 21, 2023, with Prime Capital Ventures, LLC (the “Lender”), as permitted under the terms of the Credit Agreement.

The termination followed repeated delays in funding and related concerns.

There were no borrowings under the Credit Agreement as of the Termination Date, and the Company did not incur any penalties as a result of such termination under the terms of the Agreement.

Upon exercising its right to terminate the Agreement, the Company was entitled to receive the return of the $ 5.3 million that the Company placed on deposit to establish an interest reserve account with the Lender.

In the three months ended March 31, 2024, the Lender defaulted on its obligation to return the interest reserve deposit.

Given the uncertainty of when or if funds will be recovered from the Lender, the Company recognized a reserve for a credit loss for $ 5.3 million as of December 31, 2023.

The Company intends to pursue all available remedies to recover these funds, including legal actions, receivership and insurance.

Company Victim to Fraudulent Criminal Scheme

As reported in the Company’s Form 8-K filed on May 1, 2024 with the SEC, the Company became aware that it was the victim of a criminal scheme involving the impersonation of a purchaser upon the default (the “Default”) on a legally binding commitment to purchase $ 8.0 million of secured notes from the Company.

The scheme resulted in the misdirection of approximately $ 1.3 million held in Company accounts to a fraudulent account controlled by a third party.

The Company recognized a $ 1.3 million loss reported as a Nonoperating loss in the accompanying condensed interim statements of operations.

The Company has pursued all available remedies to recover this loss, including reporting it to law enforcement.

Legal Proceedings

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The Company intends to respond in a timely fashion to the BE&K and Fisk Complaints and cross-claims.

On August 8, 2025, B&I Contractors, Inc., one of the defendants in the BE&K Complaint, filed a motion for summary judgment (the “MSJ”) as to the Count I (Foreclosure of Construction Lien).

The Company has responded to the BE&K and Fisk Complaints and cross-claims and intends to file a timely response to the B&I MSJ.

Inflationary Cost Environment, Banking Crisis, Supply Chain Disruption and the Macroeconomic Environment

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Future developments in these and other areas present material uncertainty and risk with respect to the Company's clinical trials, IND-enabling activities, buildout of the new manufacturing and laboratory facilities, as well as the Company's financial condition and results of operations.

The extent and duration of such events and conditions, and resulting disruptions to our operations, are highly unpredictable.

The extent and duration of such events and conditions, and resulting disruptions to our operations, are highly unpredicta ble.

Subsequent Events

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In addition to the required recognition or disclosure disclosed in the footnotes herein, there were also the following subsequent events after the reporting date:

At the Special Meeting, Stockholders approved three proposals, including the Reverse Stock Split, the issuance of up to $ 40.0 million of shares of the Company’s Common Stock to Investor under the terms of the ELOC Purchase Agreement, and the Principal Terms of Conversion for the conversion of at least $ 6.6 million of the outstanding principal of Secured Notes.

Each proposal represented a critical element in the Company’s plan to regain compliance with all Listing Rules for the Nasdaq Exchange.

Subsequent to March 31, 2025, the Company completed the following elements of its plan to regain compliance with all Nasdaq Listing Rules:

• On April 17, 2025, the Company formally applied to move to the Capital Markets tier, thus will refer to the Listing Rules for that tier for the compliance with all Listing Rules.

• The Reverse Split was effective on April 11, 2025.

On April 28, 2025, the Company completed 10 consecutive trading days with a trading price for its listed securities at $ 1.00 or above, thus achieving compliance with the minimum bid price rule.

The Company remains in compliance as of the date of issuance of this Quarterly Report.

• On April 16, 2025, after the SEC declared a registration statement effective, the Company has registered the underlying shares of Common stock for up to $ 40.0 million of shares issuable to Investor under the terms of a Equity Purchase Agreement.

• On April 16, 2025, after the SEC declared a registration statement effective, the Company has registered the underlying shares of Common Stock for the Common Stock Warrant issued in its November 2024 financing.

• On May 1, 2025, the noteholders of $ 6.6 million of outstanding principal of Secured Notes entered a definitive conversion agreement with the Company.

On April 17, 2025, the Company received a summons and a copy of a complaint filed by BE&K in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida (the “BE&K Complaint”).

The BE&K Complaint was filed by BE&K Building Group, LLC as Plaintiff and each of the Company, Cogent Bank, B&I Contractors, Southern Painting, Dash Door & Closer Service, Inc., Fisk Electric Company and Lotspeich Co.

of Florida as Defendants.

BE&K Building Group, LLC v.

HCW Biologics, et al., CACE-25-004668 (Fla.

2025) (the “BE&K Litigation”).

The Company was also served with a cross claim from B&I Contractors and Dash Door & Closer Service, Inc.

and a complaint filed by Fisk Electric Company.

Commitments and contingencies - Legal, Other Matters.

On May 7, 2025, the noteholders of $ 6.6 million of the outstanding principal of the Secured Notes (participating noteholders) effected the conversion of the Secured Notes held by them into shares of the Company’s Common Stock at a conversion price of $ 26.00 per share (adjusted for the Reverse Stock Split), warrants to purchase approximately $ 3.3 million of the Company’s Common Stock at an exercise price of $ 26.00 per share (as adjusted for the Reverse Stock Split), and the right to their pro rata share of 49.1 % of the proceeds of the Company’s shares of Wugen common stock, if and when such shares are ever sold.

This transaction was effected pursuant to the terms of a Second Amendment to Amended and Restated Senior Secured Note Purchase Agreement and Related Agreements dated as of May 1, 2025 (the “Conversion Agreement”).

The conversion was completed on May 7, 2025 , pursuant to the Conversion Amendment, the Secured Notes held by the participating noteholders were cancelled, and the Company issued unregistered shares of Common Stock (which are subject to a 180-day lock-up from the conversion date) and warrants to purchase up to $ 3.3 million of Common Stock that may be exercised at any time up to five years from the closing date (any such shares also subject to a 180-day lock-up from the conversion date).

In accordance with their terms, following the completion of a qualified offering, the Convertible Bridge Notes will be converted into shares of our Common Stock at the final offering price in an o ffering that closed on May 15, 2025.

Investors included:

$ 60,000 invested by Hing C.

Wong, the Company’s Founder and CEO;

$ 100,000 invested by Scott T.

Garrett, the Chairman of the Company’s Board of Directors;

and $ 10,000 invested by Gary M.

Winer, a member of the Company’s Board of Directors.

On May 13, 2025, the Company completed its performance obligation under the WY Biotech Agreement, as amended.

By doing so, the Company delivered a technology transfer report which characterized the licensed molecules, HCW11-006.

WY Biotech has a 30-day due diligence period during which it will assess the contents of this report.

At the end of the due diligence period, WY may either elect to terminate the Agreement with no penalties or continue with the Agreement, as which point it would become binding.

On May 15, 2025, the Company closed on an equity offering with gross proceeds of $5.0 million through a follow-on offering of an aggregate of 671,140 units at a purchase price of $7.45 per unit priced at-the-market under Nasdaq rules.

In addition, the Company has entered into a privately negotiated agreement with the holder of certain existing outstanding warrants to purchase up to 167,925 shares of common stock (the “Existing Warrants”) to reduce the exercise price of such Existing Warrants from $41.20 per share to $7.45 per share.

Also on May 15, 2025, the Company received a notification for exercise of 177,140 of its 513,140 Pre-Funded Warrants.

On July 4, 2025, following the end of the second quarter, the One Big Beautiful Bill Act was enacted into law in the United States.

This legislation includes various tax provisions that may affect U.S.

corporate taxpayers, including changes to the deductibility of interest expense, the treatment of research and development costs, and depreciation of certain property, among other items.

The Company is currently assessing the potential impact of this new legislation on its annual income tax expense, deferred tax assets and liabilities, valuation allowances, and projected cash flows.

Based on its preliminary analysis, the Company does not expect the legislation to have a material effect on its financial statements.

On July 22, 2025, the Company submitted a Put Notice to Square Gate for 5,000 shares to be sold under the terms of the Equity Purchase Agreement, which was settled on July 25, 2025 for $ 19,803 , net of transaction fees.

On August 8, 2025, B&I Contractors, Inc., one of the defendants in the BE&K Complaint, filed a motion for summary judgment (the “MSJ”) as to the Count I (Foreclosure of Construction Lien).

On August 14, 2025, the Company entered into the First Amendment to the Equity Purchase Agreement between HCW Biologics Inc., and Square Gate Capital Master Fund, LLC – Series 4, a series limited liability company organized in the State of Delaware (the “Square Gate”).

The amended agreement provides an alternative process for the issuance of put notices to Square Gate, allowing intraday trading.

On August 15, 2025, the Company filed a “Notification of Late Filing” to allow the Company to extend the deadline for filing its Quarterly Report on Form 10-Q.

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-Q

Item 1. Financial Statements