Company: HCWB
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0000950170-25-046724
Chunk: 184

Company: HCW Biologics Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1A
Chunk 184
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 Staff notified the 

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Company that its securities were subject to delisting from Nasdaq unless the Company timely requested a hearing. The Company timely requested and received a hearing at which time it outlined its compliance plan before the Panel.  The Panel accepted our compliance plan and granted us the above-referenced extensions.

During the extension periods, the Company intends to implement its compliance plan and continue to actively monitor MVLS, the Bid Price and MVPHS while it considers all options available to it and to take other action, if necessary and as deemed appropriate by the Company’s Board, to remedy the deficiency, including potentially effecting a reverse stock split, entering into a $20.0 million equity life of credit and converting at least $6.6 million in senior secured notes to equity.  On February 21, 2025, the Company filed its Definitive Proxy for a Special Meeting to obtain the requisite stockholder approvals to ensure it has the ability to take the certain of the actions that are part of its compliance plan.  There can be no assurance that the Company will be able to comply within the period of time granted by the Panel.

The Company’s balance sheet has liabilities that will require payment, and use of funds for this purpose will make less funding available for operations and clinical development. 

Included in the Company’s balance sheet in the accompanying audited financial statements are $17.8 million of obligations included in accounts payable that represent amounts past due.  These include $13.5 million due for legal fees incurred as a result of mounting a defense for the Company and our Chief Executive Officer in a long-running arbitration proceeding that was settled on July 13, 2024.  After year end, we received a $2.0 million insurance payment which was used to offset obligations for legal fees for our Chief Executive Officer.  Also included in outstanding obligations is $4.3 million of obligations included in accounts payable for amounts owed for construction of a manufacturing facility that the Company is building at a property it owns in Miramar, Florida (the “Property”). As of December 31, 2024, certain subcontractors had filed mechanics liens related to unpaid invoices issued in connection with the facility. On December 16, 2024, BE&K Building Group, the prime contractor on the project, sent the Company a draft, unfiled lawsuit and requested the parties discuss payment. On January 22, 2025, the Company entered into a forbearance agreement with BE&K to allow