Company: HCWB
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0000950170-25-046724
Chunk: 88

Company: HCW Biologics Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 8
Chunk 88
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.  The Company continues to seek the financing required to complete the construction project, with the cooperation of the lender and lien holders.  To date, the Company has funded operations primarily through the sale of stock, issuance of Senior Notes and revenues generated from the Company’s exclusive worldwide license with Wugen, Inc. (“Wugen”), pursuant to which Wugen licensed limited rights to develop, manufacture, and commercialize cell therapy treatments for cancer based on two of the Company’s internally-developed multi-cytokine fusion protein molecules, and its manufacturing and supply arrangement with Wugen. In the years ended December 31, 2023 and 2024, Company recognized revenues generated from the supply of clinical and research grade material to Wugen of $2.8 million and $2.6 million, respectively.   

103

As reported in the Company’s Form 8-K filed on July 18, 2024 and further described in Part I, Item 3. – “Legal Proceedings” below, as of July 13, 2024, the Company and Dr. Hing C. Wong, the Company’s Founder and Chief Executive Officer, entered into a confidential Settlement Agreement and Release (the “Settlement Agreement”) with ImmunityBio and its affiliates.  The Settlement Agreement includes mutual general releases by and among the parties thereto. No party is required to make any monetary payments to any other party or person under the Settlement Agreement and each party will bear its own expenses incurred in connection with the matter.  In accordance with the provisions of the Settlement Agreement, upon completion of remedial procedures, the parties stipulated that the Arbitration and Complaint should be dismissed.  The Arbitration and related Complaint were dismissed on December 24, 2024.  The Company entered into the Settlement Agreement to avoid the costs, disruption and distraction of further litigation.  In the accompanying condensed balance sheet as of December 31, 2024, the Company reported a balance of $14.4 million for legal fees incurred but not yet paid that were included within Accounts payable and an accrual of $42,800 for accrued legal fees within Accrued liabilities and other current liabilities. The Company is engaged in discussions with the law firms involved with this matter to arrange a reasonable payment plan with respect to those legal fees.  With the execution of the Settlement Agreement, the Company resolved the attendant uncertainties for the outcome of the Arbitration and additional complexities, and it launched its new financing plan.  Subsequent to the year end,