HCW Biologics Inc. announced on August 10, 2026, that its Audit Committee concluded previously issued unaudited condensed financial statements for the three months ended March 31, 2026, should no longer be relied upon due to a material misstatement in earnings per share (EPS). The error stemmed from an incorrect application of the two-class method for allocating undistributed earnings between common stock and participating warrants. Post-split, reported basic and diluted EPS was $2.19 per share, overstating the correct amount by $0.80 per share because 100% of earnings were allocated to common shares instead of approximately 63.3%. The company identified a material weakness in internal controls regarding technical accounting review for complex warrant instruments. HCW Biologics intends to file an amended Form 10-Q and update related registration statements. The company operates in the biotechnology sector, focusing on the development of biologics.
