Company: HCWB
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0000950170-25-046724
Chunk: 108

Company: HCW Biologics Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 8
Chunk 108
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 December 31, 2024, the fair value of the embedded derivative, which incorporated the likelihood of certain events occurring, was immaterial.  Thus, as of December 31, 2024, the Company did not recognize the embedded derivative in the accompanying condensed financial statements.  See Note 18.  Subsequent Events.The Company accounts for the bonus payment to be paid if the Secured Notes are repaid on the Maturity Date by accreting the bonus payment to the full amount due on the Maturity Date, utilizing the effective interest rate method.  As of December 31, 2024, the Company recognized $527,304 for the accretion of the fixed bonus payment.   Five-Year Maturities The Company classifies the total undiscounted contractual payments that are due in the next 12 months as current.  The loan was initially measured on a present value basis. An amortization schedule is used to determine how much of each payment is applied to interest and principal each period. The payment is first applied to interest, and the remainder reduces the principal balance.  The table below shows the amount of maturities for each of the five years following the date of the latest balance sheet:   

        Cogent Bank Loan

        Maturities per Year

        2025
         
        $
        127,623

        2026

        135,266

        2027

        6,079,440

        Total Debt
         
        $
        6,342,329

        Senior Secured Notes

        Maturities per Year

        2026
         
        $
        9,252,700

        Total Debt
         
        $
        9,252,700

        Note that the total debt in the table above includes the full accretion of debt issuance costs for the Cogent Bank Loan and the full accretion of the fixed bonus payment for the Senior Secured Notes.  

7. License AgreementsWugen LicenseOn December 24, 2020, the Company entered into the Wugen License transferring rights to Wugen to develop, manufacture, and commercialize certain cellular therapy products based on two of the Company’s fusion protein molecules. The term of the agreement will expire on a product-by-product and country-by-country basis, upon the later of (i) ten years from the first commercial sale of the product or (ii) the expiration of the