Company: HCWB
Filing Date: 2025-02-21
Form Type: DEF 14A
Source: 0001193125-25-032115
Chunk: 17

Company: HCW Biologics Inc.
Filing Date: 2025-02-21
Form: DEF 14A
Chunk 17
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 like Nasdaq, over lower-priced securities quoted on the over-the-countermarkets:

| • |     | Stock Price Requirements: Many brokerage firms have internal policies and practices that have the                                                                                                                                                       
 effect of discouraging individual brokers from recommending lower-priced securities to their clients. Many institutional investors have policies prohibiting them from holding lower-priced securities in their portfolios, which reduces the number of 
 potential purchasers of our Common Stock. Investment funds may also be reluctant to invest in lower-priced securities.                                                                                                                                  |

| • |     | Stock Price Volatility: A higher stock price may increase the acceptability of our Common Stock to                                                                                                                                                        
 a number of long-term investors who may not find our Common Stock attractive at its current prices due to the trading volatility often associated with securities below certain prices. Moreover, the analysts at many brokerage firms do not monitor the 
 trading activity or otherwise provide coverage of lower-priced securities.                                                                                                                                                                                |

| • |     | Transaction Costs: Investors may be dissuaded from purchasing securities below certain prices                            
 because brokers’ commissions, as a percentage of the total transaction value, can be higher for lower-priced securities. |

| • |     | Access to Capital Markets: If our appeal of the Nasdaq staff determination to delist our common                                                                                                                                                    
 stock is not successful or we are unable to regain compliance with the Minimum Bid Price Rule and our Common Stock is delisted from Nasdaq, investor demand for additional shares of our Common Stock would be limited, thereby preventing us from 
 accessing the public equity markets as a strategy to raise additional capital.                                                                                                                                                                     |

We believe that Reverse Stock Split(s), if effected, could increase analyst and broker interest in our Common Stock by avoiding these internal policies and practices. Increasing visibility of our Common Stock among a larger pool of potential investors could result in higher trading volumes. We also believe that one or more Reverse Stock Splits may make our Common Stock a more attractive and cost-effective investment for many investors, which could enhance the liquidity of our Common Stock for our stockholders. These increases in visibility and liquidity could also help facilitate future financings and give management more flexibility to focus on executing our business strategy, which includes the strategic management of authorized capital for business purposes. In evaluating whether to seek stockholder approval for the Reverse Stock Split Proposal, our Board took into consideration negative factors associated with reverse stock splits. These factors include the negative perception of reverse stock splits that investors, analysts and other stock market participants may hold; the fact that the stock prices of some companies that have effected reverse stock splits have subsequently declined, sometimes