Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q ("Quarterly Report") and with our audited financial statements and the notes thereto included in our Annual Report. In addition, you should read the "Risk Factors" and "Information Regarding Forward-Looking Statements" sections of this Quarterly Report and our Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

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. ABP-102 is designed to redirect a patient's immune system to fight cancer by engaging T cells through co-targeting human epidermal growth factor receptor 2, or HER2, and cluster of differentiation 3, or CD3, T-cell co-receptor. The Phase 1 clinical trials for ABP-102 are led by Celltrion and aim to evaluate safety, tolerability, pharmacokinetics, and preliminary efficacy in patients with HER2-positive solid tumors (such as breast and gastric cancers). ABP-201 is designed to block blood vessel formation and normalize damaged vessels through co-targeting vascular endothelial growth factor, or VEGF, and angiopoietin-2, or ANG-2. We plan to develop ABP-201 to treat vascular disease of the eye, focusing on wet age-related macular degeneration (Wet AMD).

Recent Developments

Following the Nasdaq delisting of our securities from the Nasdaq Capital Market, effective February 23, 2026, our securities are trading on the OTC Pink Limited Market under the ticker symbol "ABPO". The delisting does not affect the Company's operations, but may have, among other material adverse effects, an adverse impact on the liquidity and market price of the Common Stock and on the Company's ability to raise capital, including under the SEPA and on favorable terms, if at all, in the future.

On May 28, 2026, the Company received written notification from the Nasdaq Listing and Hearing Review Council (the "Council") that the Council had reviewed the decision of the Nasdaq Hearings Panel (the "Panel") of the Nasdaq Stock Market LLC ("Nasdaq") and had determined to reaffirm the Panel's decision that due to the Company not having met the terms of the Panel's November 10, 2025 decision that the Company demonstrate compliance with the minimum equity standard requirement under Nasdaq Listing Rule 5550(b)(1) by February 16, 2026, the Company's securities will be delisted from Nasdaq.

The Company expects that Nasdaq may file a Form 25 with the SEC to delist the securities from Nasdaq and deregister the securities under Section 12(b) of the Securities Exchange Act of 1934, as amended (potentially) in the coming days.

The Company expects its common stock will continue to be eligible for quotation on the OTC Pink Limited Market under its existing symbol, "ABP" and its public warrants under the existing symbol "ABPWW." The Company can provide no assurances that any broker-dealer will make a market in its common stock or public warrants or that trading levels, liquidity, or quotation prices will be maintained. The Company also cautions its stockholders and public warrant holders that trading on the OTC Pink Limited Market may be subject to limited availability of information, reduced transparency and liquidity and greater volatility.

Results of Operations

Results of Operations for the Three Months Ended June 30, 2026 and 2025

The following is a comparative discussion of our results of operations for the three months ended June 30, 2026 and 2025 (in thousands):

		For the Three Months Ended June
		2026				2025				Change				%
Operating expenses:
Research and development		$	9			$	313			$	(304	)			-97	%
General and administrative			1,166				1,948				(782	)			-40	%
Total operating expenses			1,175				2,261				(1,086	)			-48	%
Loss from operations			(1,175	)			(2,261	)			1,086				48	%
Other income (expense), net			235				(723	)			958				133	%
Net loss		$	(940	)		$	(2,984	)		$	2,044				68	%

Revenue

We did not generate revenue during the three months ended June 30, 2026 and 2025. Our ability to generate product or license revenue 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 license and royalty payments to us.

Operating Expenses

Research and Development Expenses

Research and development expenses consist primarily of salaries, payroll taxes, employee benefits and share-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 $0.3 million for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, 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 not involved in research and development efforts, costs related to our directors, and senior advisors; professional service fees, including accounting and legal services and other consulting services.

General and administrative expenses decreased by $0.8 million for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, primarily due to the decrease of approximately $0.3 million in legal and accounting expenses, approximately $0.2 million in facilities and supplies costs and $0.2 million in share-based compensation expense as a result of the cost reduction efforts implemented in the second half of 2025.

Other Income (Expense), Net

Other income (expense), net improved by $1.0 million for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. This change is primarily due to the loss of approximately $0.6 million on the change in the fair value of the embedded derivative liabilities and the loss on the settlement of the convertible notes of approximately $0.1 million recognized during the three months ended June 30, 2025, as well as the decrease in interest expense of approximately $0.2 million.

Results of Operations for the Six Months Ended June 30, 2026 and 2025

The following is a comparative discussion of our results of operations for the six months ended June 30, 2026 and 2025 (in thousands):

		For the Six Months Ended June
		2026				2025				Change				%
Operating expenses:
Research and development		$	22			$	638			$	(616	)			-97	%
General and administrative			2,086				4,581				(2,495	)			-54	%
Total operating expenses			2,108				5,219				(3,111	)			-60	%
Loss from operations			(2,108	)			(5,219	)			3,111				60	%
Other income (expense), net			140				(1,652	)			1,792				108	%
Net loss		$	(1,968	)		$	(6,871	)		$	4,903				71	%

Revenue

We did not generate revenue during the six months ended June 30, 2026 and 2025. Our ability to generate product or license revenue 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 license and royalty payments to us.

Operating Expenses

Research and Development Expenses

Research and development expenses decreased by $0.6 million for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, 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 decreased by $2.5 million for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily due to the decrease of approximately $1.2 million in legal and accounting expenses, approximately $0.4 million in facilities and supplies costs, approximately $0.4 million reversal of expenses upon settlement of outstanding liabilities to a former director and $0.5 million in executive and share-based compensation expenses as a result of the cost reduction efforts implemented in the second half of 2025.

Other Income (Expense), Net

Other income (expense), net improved by $1.8 million for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. This change is primarily related to the interest expense for the one-time charge for the fair value of the warrants issued under the promissory note with an executive in the amount of approximately $0.7 million during the six months ended June 30, 2025, in which there was no similar interest expense activity during the six months ended June 30, 2026. The remaining change is due to the loss of approximately $0.6 million on the change in the fair value of the embedded derivative liabilities during the six months ended June 30, 2025, the decrease in interest expense of approximately $0.2 million, and the loss of approximately $0.2 million for the change in fair value of the SEPA Put Rights asset and the loss on the settlement of the convertible notes of approximately $0.1 million recognized during the six months ended June 30, 2025.

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 net losses of $2.0 million and $6.9 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $121.0 million. We expect to incur operating losses in the foreseeable future.

In April 2025, the Company received multiple notices from the Listing Qualifications Department staff of the Nasdaq Stock Market ("Nasdaq") indicating that it no longer met several continued listing requirements. Specifically, its stock price had remained below Nasdaq's $1.00 minimum bid price requirement for 30 consecutive business days, and it failed to meet the required minimum levels for both Market Value of Publicly Held Shares (the "MVPHS requirement") and Market Value of Listed Securities (the "MVLS requirement"). Nasdaq granted compliance periods through September and October 2025 to allow the Company time to regain compliance.

After failing to satisfy the minimum bid price requirement by the September 2025 deadline, the Company requested a hearing before a Nasdaq Hearings Panel (the "Panel"). At an October 2025 hearing, management presented its plan to regain compliance with the minimum bid price, MVPHS, and MVLS requirements. Nasdaq subsequently allowed the Company to remain listed temporarily, subject to strict conditions and deadlines, including demonstrating compliance with Nasdaq's minimum equity standard by February 16, 2026.

The Company did not meet the required equity standard by the deadline, and on February 18, 2026, the Panel notified the Company that its securities would be delisted. Trading of the Company's stock on Nasdaq was suspended on February 23, 2026, and the shares began trading on the OTC Pink Limited Market tier under the ticker symbol "ABPO." Although the Company appealed the delisting decision, on May 28, 2026, the Nasdaq Listing and Hearing Review Council upheld the Panel's ruling. The Company expects that Nasdaq may file a Form 25 with the SEC to delist the securities from Nasdaq and deregister the securities under Section 12(b) of the Securities Exchange Act of 1934, in the coming days.

The delisting does not affect the Company's operations, but results in 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 increased complexities, along with the costs associated with trading on the Over-the-Counter market, as well as the following:

	●	a limited availability of market quotations for our securities;
	●	reduced liquidity for our securities;
	●	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;
	●	a limited amount of news and analyst coverage; and
	●	a decreased ability to issue additional securities or obtain additional financing including under SEPA (see Note 10 of the Notes to the Unaudited Condensed Consolidated Financial Statements) and on favorable terms, if at all, in the future.

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

As of June 30, 2026, the Company had cash of $4.2 million. Due to its current liabilities, the cash available to the Company will not be sufficient to allow the Company to operate for at least 12 months from the date that the unaudited condensed 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. If the Company is unable to obtain funding, the Company could be forced to further 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 these unaudited condensed 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 further slow cash burn, extending the cash runway until financing can be secured. The condensed consolidated financial statements 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 pre-clinical activities and clinical trials of our product candidates. 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;
	●	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 a license agreement;
	●	our ability to maintain, expand and defend the scope of our 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 our 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;
	●	the effect of competing technological and market developments; and
	●	general economic, industry and market conditions or other events or factors, many of which are beyond our control, such as the impact of any natural disasters, or public health emergencies, and the impacts of inflation, interest rates, actual or anticipated bank failures, actual or anticipated government tariffs, and international military or geopolitical conflicts.

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. 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 further 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 six months ended June 30, 2026 and 2025 (in thousands):

		For the Six Months Ended June 30,
		2026				2025				Change				%
Net cash used in operating activities		$	(3,134	)		$	(2,552	)		$	(582	)			23	%
Net cash provided by financing activities		$	7,288			$	1,589			$	5,699				359	%

Net cash used in operating activities for the six months ended June 30, 2026, increased by $0.6 million as compared to the six months ended June 30, 2025. Although the operating expenses, excluding non-cash items, decreased by $2.8 million for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, the cash used in operating activities increased by $3.4 million due to the timing of disbursements, net of collections on accounts receivable, in the first half of 2026 as compared to the first half of 2025.

Net cash provided by financing activities increased by $5.7 million for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. The cash provided during the six months ended June 30, 2026 is primarily from the sale of the common stock shares to YA in accordance with the terms of the SEPA for gross cash proceeds of $7.3 million. The cash provided during the six months ended June 30, 2025 is due to proceeds received from issuances of debt of $1.8 million and proceeds of $0.1 million from the settlement of the Forward Purchase Agreement which were partially offset by $0.3 million of payments made on notes payable.

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 unaudited condensed 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 these unaudited condensed 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. There have been no changes to our critical accounting policies and estimates as compared to those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

Recent Accounting Pronouncements

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