HCW Biologics (HCWB) risk factors, FY2025 10-K

Other

1. 01Summary of Key Risk Factors
2. 02We have incurred significant financial losses since our inception, and we expect to incur losses for the foreseeable future. We have no products approved for commercial sale and may never achieve or maintain profitability81% rewritten
3. 03Preliminary, topline or interim data from our clinical trials that we announce or publish from time to time may change as more patient data becomes available and are subject to audit and verification procedures that could result in material changes in the final data

Risks Related to our Financial Position and Need for Additional Capital

1. 04We have incurred significant losses since our inception and we expect to incur losses for the foreseeable future. We have no products approved for commercial sale and may never achieve or maintain profitability
2. 05Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability89% rewritten
3. 06We cannot assure you that the measures we have taken to date to strengthen internal controls over financial reporting, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses30% rewritten
4. 07delay or terminate our plan to build and renovate our manufacturing facility; or
5. 08Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates
6. 09There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq, a failure of which could result in a delisting of our securitiesNew
7. 10The 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 development75% rewritten

Risks Related to our Business

1. 11If we or any collaborators we work with in the future are unable to successfully develop and commercialize our product candidates, or experience significant delays in doing so, our business, financial condition, and results of operations will be materially adversely affected
2. 12If we do not successfully execute or address these matters in a timely manner or at all, we could experience significant delays or an inability to successfully develop and commercialize our product candidates, which would materially adversely affect our business, financial condition, and results of operations
3. 13The success of our business development efforts, including license agreements, depends on our ability to realize and anticipate the benefits of these transactions and is subject to numerous risks and uncertainties, many of which are outside of our control
4. 14We expect to continue to expand our capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations
5. 15Our business and operations are subject to risks related to climate change

Risks Related to the Development and Clinical Testing of Our Product Candidates

1. 16Our clinical trials may fail to demonstrate the safety and efficacy of our product candidates or any future product candidates, which would prevent or delay or limit the scope of regulatory approval and commercialization
2. 17We may become exposed to costly and damaging product liability claims, either when testing our product candidates in the clinic or at the commercial stage, and our product liability insurance may not cover all damages from such claims

Risks Related to Our Regulatory Environment

1. 18we disseminate false or misleading promotional materials relating to the relevant product candidate
2. 19Our employees, independent contractors, principal investigators, consultants, commercial partners, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements
3. 20Current and future legislation may increase the difficulty and cost for us and any future collaborators to obtain marketing approval of and commercialize our product candidates and affect the prices we, or they, may obtain34% rewritten

Risks Related to Commercialization of Our Product Candidates

1. 21We operate in highly competitive and rapidly changing industries, which may result in others discovering, developing or commercializing competing products before or more successfully than we do
2. 22Failure to successfully identify, develop, and commercialize additional product candidates could impair our ability to grow
3. 23Even if approved, our products may not gain market acceptance, in which case we may not be able to generate product revenues, which will materially adversely affect our business, financial condition, and results of operations
4. 24We currently have no marketing, sales, or distribution infrastructure and we intend to either establish a sales and marketing infrastructure or outsource this function to a third party. Either of these commercialization strategies carries substantial risks to us

Risks Related to Our Dependence on Third Parties

1. 25Supply sources could be interrupted from time to time and, if interrupted, there is no guarantee that supplies could be resumed within a reasonable time frame and at an acceptable cost or at all
2. 26We may not realize the benefits of any existing or future co-development or out-licensing arrangement, and if we fail to enter into new strategic relationships, our business, financial condition, commercialization prospects, and results of operations may be materially adversely affected
3. 27To date, we have relied on one third-party manufacturer for the cGMP production of our drug product candidates. The loss of this third-party manufacturer could negatively impact our ability to develop our product candidates and adversely affect our business
4. 28Although in the future we intend to develop our own manufacturing facility, we also intend to use third parties as part of our manufacturing process and may, in any event, never be successful in developing our own manufacturing facility

Risks Related to Intellectual Property

1. 29Failure to protect or to obtain, maintain or extend adequate patent and other intellectual property rights could materially adversely affect our ability to develop and market our product candidates
2. 30Intellectual property rights of third parties could adversely affect our ability to develop or commercialize our product candidates, such that we could be required to litigate or obtain licenses from third parties in order to develop or market our product candidates
3. 31We may need to obtain licenses of third-party technology that may not be available to us or are available only on commercially unreasonable terms, and which may cause us to operate our business in a more costly or otherwise adverse manner that was not anticipated
4. 32We are and may become subject to claims challenging the inventorship or ownership of our patents and other intellectual property
5. 33We may rely on trade secret and proprietary know-how, which can be difficult to trace and enforce and, if we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed
6. 34We may be in the future subject to third-party claims asserting that our employees, consultants, contractors, collaborators, or advisors have misappropriated or wrongfully used or disseminated their intellectual property, or claiming ownership of what we regard as our own intellectual property

Risks Related to Data Privacy and Cybersecurity

1. 35Our information technology systems, or those used by our third-party contractors or consultants, may fail or suffer security breaches, which could adversely affect our business69% rewritten

Risks Related to Ownership of Our Common Stock

1. 36Our stock price may be volatile or may decline regardless of our operating performance, resulting in substantial losses for investors89% rewritten
2. 37Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval46% rewritten
3. 38We are an emerging growth company as well as a “smaller reporting company”, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies or smaller reporting companies could make our Common Stock less attractive to investors
4. 39exemptions from the requirements of holding non-binding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved
5. 40If we fail to maintain proper and effective internal controls over financial reporting, our ability to produce accurate and timely financial statements could be impaired
6. 41Provisions in our amended and restated certificate of incorporation and our amended and restated bylaws and Delaware law might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the market price of our Common Stock
7. 42limit the jurisdictions in which certain stockholder litigation may be brought
8. 43Unfavorable global economic conditions could adversely affect our business, financial condition, stock price and results of operations
9. 44Our money market or other investments or bank deposits may be subject to market, interest and credit risk that may reduce in value
10. 45Our future growth and ability to compete depends on retaining our key personnel and recruiting additional qualified personnel