HCW Biologics secures $4 million through warrant exercise agreement

MIRAMAR, Fla. - HCW Biologics Inc. (NASDAQ:HCWB) announced Wednesday it has entered into a warrant inducement agreement with an investor for the immediate exercise of previously issued warrants, expected to generate approximately $4 million in gross proceeds. The cash infusion comes at a critical time for the company, which InvestingPro data shows is quickly burning through cash with a concerning current ratio of just 0.06.

Under the agreement, the investor will exercise warrants issued in November 2024 and May 2025 at a reduced price of $2.66 per share, covering a total of 1,510,205 shares of common stock. The original warrants were issued on November 20, 2024, and May 15, 2025.

In exchange for the immediate exercise, HCW Biologics will issue new unregistered warrants to purchase 3,020,410 shares at an exercise price of $2.41 per share. These new warrants will be immediately exercisable and expire five and a half years after issuance.

Maxim Group LLC is serving as the exclusive financial advisor for the transaction, which is expected to close around November 20, subject to customary closing conditions.

The company stated it will file a registration statement with the Securities and Exchange Commission covering the resale of shares issuable upon exercise of the new warrants.

HCW Biologics is a clinical-stage biopharmaceutical company developing immunotherapies targeting chronic inflammation and age-related diseases. Its lead product candidate, HCW9302, is currently being evaluated in a Phase 1 clinical trial for autoimmune disease.

The new warrants are being offered through a private placement exempt from registration requirements of the Securities Act of 1933, according to the press release statement.

In other recent news, HCW Biologics Inc. announced an amended licensing agreement with Beijing Trimmune Biotech, which involves a $7 million upfront license fee. HCW Biologics will receive $3.5 million in cash and the remaining amount in transferable equity from Trimmune. Additionally, HCW Biologics has dosed the first patient in a Phase 1 clinical trial for alopecia areata at The Ohio State University Wexner Medical Center. This trial uses HCW9302, a molecule developed to manage inflammation.

The company has also been granted an extension by the Nasdaq Hearings Panel to regain compliance with listing requirements, following a hearing about their non-compliance with the Equity Rule. In related developments, HCW Biologics and WY Biotech are in discussions over a delayed $7 million payment under their existing agreement, with negotiations ongoing for further revisions. Meanwhile, Wugen Inc., another biotech firm, has raised $115 million in equity financing, led by Fidelity Management & Research Company, with participation from several investment firms.

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