Company: HCWB
Filing Date: 2025-02-21
Form Type: DEF 14A
Source: 0001193125-25-032115
Chunk: 32

Company: HCW Biologics Inc.
Filing Date: 2025-02-21
Form: DEF 14A
Chunk 32
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’s board of directors, who invested $140,000; Gary M. Winer, a member of our board of directors, who invested $60,000; Rick S. Greene, a member of the board of directors, who invested $25,000, as well as
unrelated parties.

The Secured Notes have a Mandatory Prepayment provision, according to which the Company is required to prepay the Secured Notes
before the Maturity Date under certain circumstances. In the event of a Mandatory

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Prepayment, Secured Notes may receive a bonus payment based on the gross proceeds of the sale of the Pledged Collateral. If the Secured Notes are repaid on the Maturity Date, holders will receive
a fixed bonus payment 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 Noteholders 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 other words, 69.05% of the total Wugen shares are security for the Senior Secured Notes and would be transferred in the event of a default, pro rata, to the Holders.

Amended terms of the Amended and Restated Note Purchase Agreement included a conversion feature, which would give Noteholders a right to convert the
outstanding indebtedness to shares of the our Common Stock under certain conditions, subject to final documentation. The holders of the Secured Notes have no obligation to exercise the conversion option, however, if the holders of the majority of
principal of Secured Notes outstanding choose to do so, then all the holders of Secured Notes must do so.

Under the Principal Terms for Conversion, as
more fully set forth in Appendix B, [Noteholders and the Company will agree that at least $6,580,000 principal amount of the Secured Notes will be converted into shares of our Common Stock at a conversion price of $0.65 per share. As part of the
conversion, the Company will issue warrants to purchase shares of our Common Stock to the converting Noteholders for up to an additional $3,290,000 of shares of our Common Stock, at an exercise price of $0.65