v3.26.1
Segment Reporting
 3 Months Ended
Mar. 31, 2026
Segment Reporting [Abstract]  
Segment Reporting

11. Segment Reporting

 

HCW Biologics Inc. has one reportable segment: life science. The life science segment consists of operations focused on discovering and developing novel immunotherapies to lengthen health span by disrupting the link between chronic, low-grade inflammation and diseases. The Company’s CODM is the chief executive officer.

 

The accounting policies of the life science segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for the life science segment based on net segment income (loss). The measure of segment assets is reported on the condensed balance sheet as total assets.

 

The Company has not generated any product revenue from commercial product sales of internally-developed immunotherapeutic products for the treatment of diseases, as no products have been approved for commercial sale as of March 31, 2026. The Company expects to continue to incur significant expenses and operating losses for the foreseeable future as it advances molecules through all stages of development and clinical trials and, ultimately, seek approval for commercial sale.

 

As such, the CODM uses cash forecast models in deciding how to invest into the life science segment. Such cash forecast models are reviewed to assess the entity-wide operating results and performance in conjunction with monitoring the results of R&D experiments for preclinical compounds and clinical trial data for clinical-stage compounds. The assessment of results of preclinical and clinical studies is critical to the allocation of resources by the CODM.

 

 

The tables below summarize the significant expense categories regularly reviewed by the CODM for the three months ended March 31, 2025 and 2026:

 

Summary of Significant Expense Categories 

       
   Three Months Ended
March 31,		 
   2025   2026 
Revenues:          
Revenues  $5,065   $6,543,001 
Cost of revenues   (4,052)   (11,071)
Gross Profit   1,013    6,531,930 
           
Operating expenses:          
Research and development expenses          
Salaries, benefits and related expenses   701,106    778,385 
Manufacturing and materials   262,798    (9,959)
Preclinical expenses   177,111    217,566 
Clinical trials   187,820    127,533 
Overhead allocations   149,876    144,423 
Total research and development expenses   1,478,711    1,257,948 
General and administrative          
Salaries, benefits and related expenses   788,490    523,353 
Professional services(a)   454,369    485,137 
Facilities and office expenses   94,330    112,912 
Depreciation expenses   61,237    53,876 
Rent and occupancy expenses   49,750    41,162 
Insurance   290,269    194,442 
Taxes   32,592    174,688 
Other expenses   183,501    233,294 
Total general and administrative expenses   1,954,538    1,818,864 
Other segment items(b)   (1,235,361)   (347,548)
Total operating expenses   2,197,888    2,729,264 
Net segment income (loss)  $(2,196,875)  $3,802,666 

 

(a)

Professional services consist primarily of audit and accounting advisory services, tax advisory services, corporate legal services related to SEC compliance, and legal fees related to patent filings.

(b) Other segment items include the following unusual or nonrecurring items:

 

       
   Three Months Ended
March 31,		 
   2025   2026 
Arbitration legal fees, net  $(1,739,493)  $6,850 
Accretion of fixed bonus upon maturity of Senior Notes, net   273,059    14,413 
Interest expense   255,822    109,274 
Indirect tax expense   --    198,146 
Change in fair value of warrant liability   --    (667,343)
Other income, net   (24,749)   (8,888)
Other segment items  $(1,235,361)  $(347,548)