Company: HCWB
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0000950170-25-046724
Chunk: 106

Company: HCW Biologics Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 8
Chunk 106
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 The unamortized balance is due on August 15, 2027 (the “Maturity Date”), and bears interest at a fixed per annum rate equal to 5.75%. Upon the Maturity Date, a final payment of unamortized principal will be due.  The Company has the option to prepay the outstanding balance of the loan prior to the Maturity Date without penalty.  Under the terms of the 2022 Loan Agreement, the Company is required to keep an operating account from which payments to service the Cogent Bank Loan will be drawn.  In addition, the Company also agreed to maintain an escrow account with adequate funds for at least 90 days of principal payments, interest payments, taxes and insurance, with a balance of $185,436 as of December 31, 2024.As of December 31, 2024, certain subcontractors have 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, 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 December 31, 2024, $6.3 million is included in Short-term debt, net in the accompanying audited balance sheet.  Senior Secured NotesOn March 31, 2024, the Company entered into a Note Purchase Agreement with the Purchasers (as defined in the Note Purchase Agreement), pursuant to which the Company may issue secured notes up to an aggregate principal amount up to $10.0 million (“Secured Notes”). As of December 31, 2024, the Company received $6.9 million through the issuance of Secured Notes, which is included within Debt, Net on the accompanying audited balance sheet.  Investors included Dr. Hing C. 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; Scott T. Garrett, the Chairman of the Company’s board of directors, who invested $140