Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity, and cash flows of the Company as of and for the periods presented below. The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto which are included in "Item 8. Financial Statements and Supplementary Data" of this Annual Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under "Cautionary Note Regarding Forward-Looking Statements and Risk Factor Summary," "Item 1A. Risk Factors" and elsewhere in this Annual Report.

Unless otherwise indicated or the context otherwise requires, references in this section to "Abpro," "we," "us," "our," the "Company," and other similar terms refer to Abpro Holdings, Inc. and its subsidiaries.

Overview

Abpro Holdings, Inc. (together with its subsidiaries, the "Company") is a biotechnology company dedicated to developing next-generation antibody therapeutics to improve the lives of patients with severe and life-threatening diseases. The Company is focused on the development of novel antibodies using its proprietary discovery and engineering platforms, primarily in the areas of immuno-oncology, ophthalmology and infectious disease. By leveraging our proprietary DiversImmune® and MultiMabTM antibody discovery and engineering platforms, we are developing a pipeline of antibodies, both independently and through collaborations with global pharmaceutical and research institutions.

Our two lead product candidates, ABP-102 and ABP-201, feature our next generation tetravalent antibody format, or TetraBi antibody format, which binds to two different targets with two distinct binding sites per target.

Merger

On November 13, 2024 (the "Closing Date"), Atlantic Coastal Acquisition Corp. II ("ACAB") consummated a merger (the "Merger") pursuant to the terms of the Merger Agreement, dated as of December 11, 2023 (the "Merger Agreement") by and among Abpro Corporation ("Legacy Abpro"), ACAB, and Abpro Merger Sub Corp., a Delaware corporation ("Merger Sub") and wholly owned subsidiary of ACAB prior to the Closing. Pursuant to the Merger Agreement, on the Closing Date, (i) ACAB changed its name to "Abpro Holdings, Inc.", and (ii) Merger Sub merged with and into Legacy Abpro, with Legacy Abpro as the surviving company in the Merger (such transactions, the "Merger," and, collectively with the other transactions described in the Merger Agreement, the "Reverse Recapitalization"). After giving effect to the Merger, Legacy Abpro became a wholly owned subsidiary of the Company. Shares of the Company commenced trading on the Nasdaq Global Market on November 14, 2024.

In addition, certain investors purchased an aggregate of 112,247 shares of Common Stock in a private placement that closed concurrently with the Closing for an aggregate purchase price of $11.2 million (the "PIPE Financing"). Unless otherwise noted, the Company has retroactively adjusted all common and preferred share and related price information to give effect to the Exchange Ratio as set forth in the Merger Agreement.

Impact of Macroeconomic Events

Our business and operations may be negatively affected by worldwide economic conditions, which may continue to be impacted by global macroeconomic challenges such as changes in trade policies, including sanctions, treaties, tariffs, regulatory requirements, and other limitations on cross-border operations, changes in inflation and fluctuations in interest rates, instability in the banking and financial services sector, declines in consumer confidence, declines in economic growth, uncertainty in the markets, geo-political and economic instability, and tensions in U.S.-China relations. The extent, severity, and duration of the impact of these events and conditions on our business cannot be predicted and may not be fully reflected in our results of operations until future periods. If economic uncertainty continues or increases, or if the global economy worsens, our business, financial condition, and results of operations may be harmed.

Recent Developments

On October 16, 2025, the Company filed with the Delaware Secretary of State a Certificate of Amendment to the Certificate of Incorporation of the Company (the "Certificate of Amendment"), which became effective on October 31, 2025, to effect a one-for-thirty (1:30) reverse stock split (the "Reverse Stock Split"), of the shares of the Company's Common Stock. The Reverse Stock Split was approved by the Company's stockholders at the 2025 annual meeting of the stockholders on October 10, 2025.

As a result of the Reverse Stock Split, every 30 shares of issued and outstanding Common Stock were automatically combined into one (1) issued and outstanding share of Common Stock, without any change in the par value per share. No fractional shares were issued as a result of the Reverse Stock Split. Instead, stockholders who otherwise would have been entitled to receive fractional shares because they held a number of shares not evenly divisible by the Reverse Stock Split ratio were entitled to receive an additional fraction of a share of Common Stock to round up to the next whole share.

Following the Reverse Stock Split, the number of shares of Common Stock outstanding were proportionally reduced from 81,150,000 shares to approximately 2,705,061 shares. The shares of Common Stock underlying the Company's outstanding stock options and warrants were similarly adjusted along with corresponding adjustments to their exercise prices. Unless we indicate otherwise or the context otherwise requires, all information in this section gives effect to this Reverse Stock Split.

The Common Stock began trading on a reverse stock split-adjusted basis upon market open on November 3, 2025. The ticker symbol for the Common Stock remained "ABP" under CUSIP number (following the Reverse Stock Split) 000847202. Following the Nasdaq delisting of our securities on the Nasdaq Capital Market, effective February 23, 2026, our securities are trading on the OTC Pink Limited Market under the ticker symbol "ABPO".

Results of Operations

Results of Operations for the Years Ended December 31, 2025 and 2024

The following is a comparative discussion of our results of operations for the years ended December 31, 2025 and 2024 (in thousands):

		For the Years Ended December 31,
		2025				2024				Change				%
Revenue:
Research and development services		$	-			$	183			$	(183	)			-100	%
Total revenue			-				183				(183	)			-100	%
Operating expenses:
Research and development			989				2,983				(1,994	)			-67	%
General and administrative			7,463				7,121				342				5	%
Total operating expenses			8,452				10,104				(1,652	)			-16	%
Loss from operations			(8,452	)			(9,921	)			1,469				-15	%
Other income, net			5,560				2,689				2,871				107	%
Net loss		$	(2,892	)		$	(7,232	)		$	4,340				-60	%

Revenue

We did not generate any material revenues during the years ended December 31, 2025 and 2024. Our research and development services revenue decreased by $0.2 million during the year ended December 31, 2025 as compared to the year ended December 31, 2024, due to the revenue earned from the research and development services performed for Celltrion related to ABP-102 development. No such research and development services revenue was earned during the year ended December 31, 2025. Our ability to generate product revenues in the future will depend almost entirely on our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize a drug candidate, or enter into collaborations that provide for payments to us.

Operating Expenses

Research and Development Expenses

Research and development expenses consist primarily of salaries, payroll taxes, employee benefits and stock-based compensation for those individuals involved in research and development efforts, as well as consulting expenses, third-party research and development expenses, laboratory supplies and clinical materials.

Research and development expenses decreased by $2.0 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to the majority of research and development personnel being on furlough since October 2024 and then subsequently terminated in the fourth quarter of 2025. The overall decrease in expenses was a result of the decrease in research and development activities while raising additional capital necessary to resume our research and development programs.

General and Administrative Expenses

General and administrative expenses consist primarily of compensation and benefits to our personnel, including the costs related to our management services agreements, directors, and senior advisors; professional service fees, including accounting, legal, and other consulting services. General and administrative expenses increased by $0.3 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to the increase in costs of operating as a public company, including legal, accounting advisory, and insurance expenses, since the closing date of the Merger in November 2024.

Other Income, Net

Other income, net increased to $5.6 million for the year ended December 31, 2025, from $2.7 million in other income for the year ended December 31, 2024. The other income realized for the year ended December 31, 2025 is primarily related to the derecognition of a $4.4 million liability for excise taxes payable and of a $3.3 million derecognition of Mabwell liability, partially offset by $1.1 million in interest expenses and $0.8 million loss on the change in fair value of embedded derivative liability related the convertible notes. The other income for the year ended December 31, 2024 was primarily due to the reversal of another $3.5 million liability to Mabwell during 2024, partially offset by $0.4 million in interest expense related to various notes payable in place throughout 2024, $0.3 million loss on the change in fair value of the forward purchase agreement and $0.3 million loss on the change in the fair value of the SEPA put rights assets (as defined in the notes to the consolidated financial statements).

Liquidity, Capital Resources and Going Concern

To date, we have financed our operations primarily through the sale of equity securities and convertible debt, proceeds from the Merger and related PIPE Financing, borrowings under loan facilities and, to a lesser extent, through payments received in connection with collaboration and license agreements. Since our inception, we incurred significant recurring losses, including a net loss of $2.9 million and $7.2 million for the years ended December 31, 2025, and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $119.0 million. We expect to incur operating losses in the foreseeable future.

On April 2, 2025, the Company received written notice (the "Notice") from the Listing Qualifications Department staff (the "Staff") of the Nasdaq Stock Market ("Nasdaq") notifying the Company that, based on the closing bid price of the Company's common stock for the last 30 consecutive business days, the Company no longer complies with the minimum bid price requirement for continued listing on The Nasdaq Stock Market LLC. Nasdaq Listing Rule 5450(a)(1) requires listed securities to maintain a minimum bid price of $1.00 per share (the "Minimum Bid Price Requirement"), and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the Minimum Bid Price Requirement exists if the deficiency continues for a period of 30 consecutive business days. Pursuant to the Nasdaq Listing Rules, the Company has been provided an initial compliance period of 180 calendar days to regain compliance with the Minimum Bid Price Requirement. The letter stated that the Company had 180 calendar days, or until September 29, 2025, to regain compliance.

On April 10, 2025, the Company received two letters from the Staff of Nasdaq. One letter (the "MVPHS Notice") indicated that based upon Nasdaq's review of the Company's Market Value of Publicly Held Shares ("MVPHS") for the last 30 consecutive business days prior to the date of the MVPHS Notice, the Company no longer meets the requirements of Nasdaq Listing Rule 5450(b)(2)(C), which requires listed securities to maintain a minimum MVPHS of $15,000,000 (the "MVPHS Requirement"). The second letter notified the Company that from February 20, 2025, to April 9, 2025, the Company's Market Value of Listed Securities ("MVLS") was below the minimum of $50 million required for continued listing on The Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(b)(2)(A) (the "MVLS Requirement"). Each letter stated that the Company had 180 calendar days, or until October 7, 2025, to regain compliance.

On September 30, 2025, the Company received a letter from Nasdaq notifying the Company that it had not regained compliance with the Minimum Bid Price Requirement during the compliance period. Accordingly, the Company timely requested a hearing before the appeal panel (the "Panel"), which stayed the suspension of the Company's securities with Nasdaq pending the Panel's decision or any extension of time provided by the Panel to regain compliance.

On October 14, 2025, the Company received a letter (the "Notice") from Nasdaq notifying the Company that it had not regained compliance with either the MVPHS Requirement or the MVLS Requirement during the compliance period.

The Hearing was held on October 30, 2025. During the Hearing, the Company presented its plans to regain compliance with the Minimum Bid Price Requirement, the MVPHS Requirement and the MVLS Requirement. On November 10, 2025, the Company received a decision letter from the Panel granting the Company's request for continued listing on The Nasdaq Stock Market, subject to the Company's strict adherence to certain interim deadlines and conditions.

On February 18, 2026, the Company received written notification from the Nasdaq Listings Qualifications Panel that the Company's securities were to be delisted from Nasdaq, effective February 23, 2026. Following the delisting, our securities are currently quoted on the OTC Markets Pink Limited tier (the "OTC Pink") under the symbol "ABPO." Trading on the OTC Pink may result in reduced liquidity, fewer market makers for our Common Stock, greater volatility in the market price of our Common Stock, and reduced ability for us to raise additional capital.

On March 18, 2026, we filed an appeal of the Nasdaq Stock Market de-listing determination. We can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our shares to become listed again, stabilize the market price or improve the liquidity of our shares, prevent our shares from dropping below Nasdaq's Minimum Bid Price Requirement or prevent future non-compliance with Nasdaq's listing requirements.

If we are unsuccessful in our appeal to Nasdaq and do not regain listing on the Nasdaq or another national exchange, we could face significant material adverse consequences, including the loss of federal preemption of state securities laws (blue sky laws) that will make certain finance and securities transactions more costly and involve increase complexities, along with the costs associated with trading on the Over-the-Counter, as well as the following:

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a limited availability of market quotations for our securities;

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reduced liquidity for our securities;

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a determination that our Common Stock is "penny stock" which will require brokers trading in the Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

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a limited amount of news and analyst coverage; and

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a decreased ability to issue additional securities or obtain additional financing in the future.

As of December 31, 2025, the Company had cash of $67 thousand. On June 23, 2025, the Company received net proceeds of $1.8 million the Second Convertible Note pursuant to the SEPA (see Note 13 to the consolidated financial statements).

Between July and December 2025, the Company issued seven Advance Notices to YA (see Note 13) in accordance with the terms of the SEPA, under which YA purchased from the Company the total of 152,377 common stock shares, raising approximately $1 million in total net proceeds.

In January and February 2026, the Company issued 3,162,785 shares of common stock with the aggregate gross purchase price of $7.3 million under an Advance Notice to YA in accordance with the terms of the SEPA.

Due to its current liabilities and considering its future cash needs to cover both research and development activities and administrative expenses, the cash available to the Company will not be sufficient to allow the Company to operate for at least 12 months from the date these consolidated financial statements are issued. The future viability of the Company is largely dependent on its ability to raise additional capital to finance its operations. The Company expects to seek additional funding through equity and debt financings, collaboration agreements and research grants. Although the Company has been successful in raising capital in the past, there is no assurance that it will be successful in obtaining such additional financing on terms acceptable to the Company, if at all. If the Company is unable to obtain funding, the Company could be forced to delay, reduce or eliminate its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects.

Accordingly, based on the considerations discussed above, management has concluded there is substantial doubt as to the Company's ability to continue as a going concern within one year after the date the consolidated financial statements are issued. The Company plans to continue to fundraise, as well as seek alternate revenues from collaboration and license agreements. If adequate funds are not available, the Company may be required to initiate steps to slow cash burn, extending the cash runway until financing can be secured. The consolidated financial statements included elsewhere in this filing do not include any adjustments with respect to the carrying amounts of assets and liabilities and their classification that might result from the outcome of this uncertainty.

Future Funding Requirements

We expect our expenses to increase in connection with our ongoing activities, particularly as we advance the preclinical activities and clinical trials of our product candidates. In addition, subsequent to the Closing of the Merger, we expect to incur additional costs associated with operating as a public company. The timing and amount of our operating expenditures will depend largely on:

	●	the scope, number, initiation, progress, timing, costs, design, duration, any potential delays, and results of clinical trials and nonclinical studies for our current or future product candidates, particularly the planned Phase 1/2 clinical trial for ABP-102, focusing on HER2+ breast and gastric cancers, as well as Phase 1 clinical trials for ABP-201 for the treatment of Wet AMD;
	●	the clinical development plans we establish for our product candidates;
	●	the number and characteristics of product candidates and programs that we develop or may in-license;

	●	the outcome, timing and cost of regulatory reviews, approvals or other actions to meet regulatory requirements established by the FDA and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities to require that we perform more studies for our product candidates than those that we currently expect;
	●	our ability to obtain marketing approval for our product candidates;

	●	the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights covering our product candidates, including any such patent claims and intellectual property rights that we have licensed pursuant to the terms of its license agreement;
	●	our ability to maintain, expand and defend the scope of its intellectual property portfolio, including the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us or our product candidates;
	●	the cost and timing of completion of commercial-scale outsourced manufacturing activities with respect to our product candidates;
	●	our ability to establish and maintain licensing, collaboration or similar arrangements on favorable terms and whether and to what extent we retain development or commercialization responsibilities under any new licensing, collaboration or similar arrangement;
	●	the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize its products on our own;
	●	the success of any other business, product or technology that we acquire or in which we invest;
	●	the costs of acquiring, licensing or investing in businesses, product candidates and technologies;
	●	our need and ability to hire additional management and scientific and medical personnel;
	●	the costs to operate as a public company in the United States, including the need to implement additional financial and reporting systems and other internal systems and infrastructure for our business;
	●	market acceptance of our product candidates, to the extent any are approved for commercial sale; and
	●	the effect of competing technological and market developments.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances, and marketing, distribution or licensing arrangements with third parties. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our ownership interest may be materially diluted, and the terms of such securities could include liquidation or other preferences that adversely affect the rights of our stockholders and the rights of the stockholders of the Company following the Closing of the Merger. Debt financing and preferred equity financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specified actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, scale back or discontinue the development and commercialization of one or more of our product candidates or delay our pursuit of potential in-licenses or acquisitions.

The following table summarizes our cash flows for the years ended December 31, 2025 and 2024 (in thousands):

		For the Years Ended December 31,
		2025				2024				Change				%
Net cash used in operating activities		$	(6,006	)		$	(9,030	)		$	3,024				-33	%
Net cash provided by investing activities		$	26			$	-			$	26				100	%
Net cash provided by financing activities		$	3,070			$	11,161			$	(8,091	)			-72	%

Net cash used in operating activities for the year ended December 31, 2025, decreased by $3.0 million as compared to the year ended December 31, 2024. The decrease in net cash used for operating activities was primarily due to a $1.0 million decrease in operating cash spent driven by a decrease in research and development activities, with approximately $1.0 million of additional expenses incurred in excess of payments in 2025, approximately $0.8 million of payments in excess of expenses incurred in 2024.

Net cash provided by investing activities increased by $26 thousand for the year ended December 31, 2025, as compared to the year ended December 31, 2024. The Company sold laboratory equipment during the year ended December 31, 2025. No property or equipment was sold during the year ended December 31, 2024.

Net cash provided by financing activities decreased by $8.1 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024. During the year ended December 31, 2025, the Company received net proceeds of $1.8 million from the Second Convertible Note, $1.1 million in net proceeds from the issuance of shares under the SEPA arrangement, and $0.1 million from the settlement of the Forward Purchase Agreement. During the year ended December 31, 2024, the Company received net proceeds of $10.4 million from the PIPE Financing, $2.8 million in net proceeds from the First Convertible Note, and $0.5 million from the Merger (which includes $2.4 million proceeds from the trust account, less $1.9 million used to settle the ACAB liabilities at the closing of the Merger). These proceeds were partially offset by the payments of $1.4 million in offering costs and $1.1 million cash transferred into escrow pursuant to the Forward Purchase Agreement.

Critical Accounting Policies and Estimates

This discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported expenses and net loss incurred during the reporting periods. Our estimates are based on our historical experience and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Share-based Compensation

Our share-based compensation program awards include stock options and restricted stock awards. The fair value of stock option grants is estimated as of the date of the grant using the Black-Scholes option pricing model. The fair value of restricted stock units is based on the fair value of our common stock on the date of the grant. The fair value of the awards is then expensed over the requisite service period, generally the vesting period, for each award as compensation expense.

We do not have sufficient history of market prices of its common stock, and as such, volatility is estimated using historical volatilities of similar public entities. The peer group was developed based on companies in the biotechnology industry. We will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. The expected term of the awards is estimated based on the simplified method for grants to employees and is based on the contractual term for non-employee awards. The risk-free interest rate assumption is based on observed interest rates appropriate for the terms of the awards. The dividend yield assumption is based on history and expectation of paying no dividends.

In determining the exercise prices of options granted, our Board has considered the fair value of the common stock as of the measurement date. As Legacy Abpro's common stock was not traded prior to the Merger, the fair value of the common stock was determined by the Board at each award grant date based upon a variety of factors, including the results obtained from an independent third-party valuation, our financial position and historical financial performance, the status of technological developments within our proposed products, an evaluation or benchmark of our competition, the current business climate in the marketplace, the illiquid nature of the common stock, arm's length sales of our capital stock, including convertible preferred stock, the effect of the rights and preferences of the preferred stockholders, and then prospects of a liquidity event, among others.

Recent Accounting Pronouncements

See Note 2, Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements for a discussion of recent accounting pronouncements.