Quarterly Report for Quarter Ending March 31, 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.

On November 13, 2024 (the "Closing Date"), Abpro Corporation ("Legacy Abpro") completed the merger with Atlantic Coastal Acquisition Corp. II ("ACAB") (the "Merger"). At the Closing Date, ACAB changed its name to "Abpro Holdings, Inc."

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". 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.

Results of Operations

Results of Operations for the Three Months Ended March 31, 2026 and 2025

The following is a comparative discussion of our results of operations for the three months ended March 31, 2026 and 2025 (in thousands):

		For the Three Months Ended December
		2026				2025				Change				%
Operating expenses:
Research and development		$	13			$	325			$	(312	)			-96	%
General and administrative			920				2,633				(1,713, )				-65	%
Total operating expenses			933				2,958				(2,025	)			-68	%
Loss from operations			(933	)			(2,958	)			2,025				-68	%
Other expense, net			(95	)			(929	)			834				-90	%
Net loss		$	(1,028	)		$	(3,887	)		$	2,859				-74	%

Revenue

We did not generate revenue during the three months ended March 31, 2026 and 2025. Our ability to generate product 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 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 March 31, 2026, as compared to the three months ended March 31, 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 $1.7 million for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily due to the decrease of approximately $0.8 million in legal and accounting expenses, approximately $0.3 million in facilities and supplies costs, approximately $0.4 million decrease in estimated liability under the litigation with the former director 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 Expense, Net

Other expense, net improved by $0.8 million for the three months ended March 31, 2026, as compared to the three months ended March 31, 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 three months ended March 31, 2025, in which there was no similar interest expense activity during the three months ended March 31, 2026.

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 $1.0 million and $3.9 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $120.0 million. We expect to incur operating losses in the foreseeable future.

On April 2, 2025, the Company received written 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 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 Panel stating 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 were to be delisted from Nasdaq. The trading of the Company's common stock was suspended at the open of trading on NASDAQ on February 23, 2026 and the Company's securities now trade on the OTCQB, Pink Limited tier of the OTC Markets under the ticker symbol "ABPO". The Company was provided fifteen (15) days from receipt of the aforementioned notice of the Panel's decision to request that the Nasdaq Listing and Hearing Review Council (the "Council") review the decision. 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 SEPA (see Note 10 of the Notes to the Unaudited Condensed Consolidated Financial Statements) and on favorable terms, if at all, in the future.

On March 18, 2026, the Company formally appealed the delisting determination and is expecting the response in June 2026.

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:

	●	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 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 March 31, 2026, the Company had cash of $5,398. 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 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 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, 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 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;
	●	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. 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 three months ended March 31, 2026 and 2025 (in thousands):

		For the Three Months Ended March 31,
		2026				2025				Change				%
Net cash used in operating activities		$	(2,080	)		$	(1,503	)		$	(577	)			38	%
Net cash provided by (used in) financing activities		$	7,411			$	(84	)		$	7,495				8923	%

Net cash used in operating activities for the three months ended March 31, 2026, increased by $0.6 million as compared to the three months ended March 31, 2025. Although the operating expenses, excluding non-cash items, decreased by $1.6 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, the cash used in operating activities increased due to the timing of disbursements with $0.6 million increase in prepaids and $1.6 million decrease in accounts payable and accrued expenses in the first quarter of 2026 as compared to the first quarter of 2025.

Net cash provided by financing activities increased by $7.3 million from the sale of the common stock shares to YA in accordance with the terms of the SEPA for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. During the three months ended March 31, 2025, the Company made $0.2 million payments on the Note Payable which were partially offset by the proceeds of $0.1 million from the settlement of 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 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.