HCW Biologics Inc. (HCWB): auditor change — HCW Biologics restating 2023 financials after $1.3M fraud; material weakness in internal controls

HCW Biologics Inc.

Criminal impersonation scheme misdirected ~$1.3M from company accounts to a fraudulent third-party account.
Default on legally binding commitment to purchase $8.0M of secured notes triggered flawed going-concern assumption.
Audit Committee concluded 2023 financial statements should be restated; no longer reliable as filed.
Amendment to revise risk factors, disclosure controls, and going-concern assessment; no impact on cash or results.
Company identified material weakness in internal controls over financing transactions; remediation plan underway.

item 4.02

Key facts

Extracted from this filing and checked against the source text.

Auditor Changes SEC 8-K Item 4.01/4.02 confidence 0.9

HCW Biologics Inc. reported that prior financial statements should not be relied upon.

Action: non reliance

Exact text from the filing

May 3, 2024, the Audit Committee of the Company’s Board of Directors (the “Board”) concluded, after discussion with the Company’s management, that the financial statements as of and for the year ended December 31, 2023 should be restated and no longer be relied upon. As such, the Company intends to file an amended Annual Report on Form 10-K (“Amendment”) restating disclosures pertaining to the following items: (1) risk factors related to the risk that material weakness in internal controls over financial reporting could lead to material misstatements in our financial statements; (2) the Company’s conclusion that its disclosure for controls and procedures and internal control over financial reporting were not effective as of December 31, 2023 due to a material weakness in internal control; and (3) a revised assessment by management of the Company’s ability to continue as a going concern

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Source: SEC EDGAR

accession 0000950170-24-053055

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