Quarterly Report for Quarter Ending September 30, 2025 (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 on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (the "SEC") on April 15, 2025 (the "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 "New Abpro," "we," "us," "our," "the Company," and other similar terms refer to Abpro Holdings, Inc. and its subsidiaries.

Overview

Abpro Holdings, Inc. and its subsidiaries (the "Company") is a biotechnology company headquartered in Burlington, Massachusetts, 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. We plan initially to develop ABP-102 for difficult to treat HER2+ solid tumors, focusing on orphan indications. 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). We intend to follow these two lead product candidates with a broad pipeline of CD3-targeting T-cell engagers based on the differentiated format of ABP-102. We expect to initiate clinical trials for ABP-102 in the first half of 2026. The initiation of clinical trials for ABP-201 may depend on future funding availability.

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." ("New Abpro"), 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 New Abpro 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

Economic uncertainty in various global markets caused by political instability and conflicts, such as the ongoing conflicts in Ukraine, and Israel, and economic challenges have led to market disruptions, including significant volatility in commodity prices, credit and capital market instability and supply chain interruptions, which have caused record inflation globally. Our business, financial condition, and results of operations could be materially and adversely affected by further negative impacts on the global economy and capital markets resulting from these global economic conditions, particularly if such conditions are prolonged or worsen. Although, to date, our results of operations have not been materially impacted by these global economic and geopolitical conditions, it is impossible to predict the extent to which our operations may be impacted in the short and long term. The extent and duration of these market disruptions, whether as a result of the military conflict between Russia and Ukraine, the effects of the Russian sanctions, the conflict between Israel and Hamas, geopolitical tensions, record inflation, or otherwise, are impossible to predict. Any such disruptions may also magnify the impact of other risks described or incorporated by reference in this Quarterly Report.

Results of Operations

Results of Operations for the Three Months Ended September 30, 2025 and 2024

The following is a comparative discussion of our results of operations for the three months ended September 30, 2025 and 2024 (in thousands):

		For the Three Months Ended September 30,
		2025				2024				Change				%
Revenue:
Research and development services		$	-			$	183			$	(183	)			-100	%
Total revenue			-				183				(183	)			-100	%
Operating expenses:
Research and development			243				642				(399	)			-62	%
General and administrative			1,093				1,472				(379	)			-26	%
Total operating expenses			1,336				2,114				(778	)			-37	%
Loss from operations			(1,336	)			(1,931	)			595				-31	%
Other (expense) income, net			(321	)			(162	)			(159	)			-98	%
Net loss		$	(1,657	)		$	(2,093	)		$	436				21	%

Revenue

Our research and development services revenue decreased by $0.2 million during the three months ended September 30, 2025 as compared to the three months ended September 30, 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 three months ended September 30, 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.

The following table summarizes our research and development expenses by product candidate and program for the three months ended September 30, 2025 and 2024 (in thousands):

		For the Three Months Ended September 30,
Research and development expenses		2025				2024
ABP-110		$	7			$	35
ABP-102			46				264
ABP-150			4				5
ABP-201			27				6
ABP-100			-				-
SARS-Co V-2 neutralizing antibody program			-				-
Unallocated research and development expenses			159				332
Total		$	243			$	642

Unallocated research and development expenses include engineering platform-related expenses that are not allocable to a specific product candidate or program, as well as stock-based compensation, other employee- related expenses that are not related to a specific product candidate or program, and facilities and depreciation expenses.

Research and development expenses decreased by $0.4 million for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, primarily due to the majority of the personnel being on furlough since October 2024. The overall decrease in expenses was a result of the decrease in research and development activities while raising additional capital necessary to restart 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 $0.4 million for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, primarily due to the decrease in payroll and related expenses of approximately $0.5 million as a result of the reduction in employee headcount, and $0.2 million decrease in lease expenses as a result of the downsizing of the Company's headquarters. This decrease was partially offset by the increase of approximately $0.3 million in costs of operating as a public company, including legal, accounting, and insurance expenses.

Other Income (Expense), Net

The net balance in other income (expense) increased by $0.2 million of other expense for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. This change is primarily due to $0.2 million loss on the settlement of convertible notes and $0.2 million loss on the change in fair value of embedded derivative liability, partially offset by $0.2 million gain on the change in the fair value of the SEPA asset.

Results of Operations for the Nine Months Ended September 30, 2025 and 2024

The following is a comparative discussion of our results of operations for the nine months ended September 30, 2025 and 2024 (in thousands):

		For the Nine Months Ended September 30,
		2025				2024				Change				%
Revenue:
Research and development services		$	-			$	183			$	(183	)			-100	%
Total revenue			-				183				(183	)			-100	%
Operating expenses:
Research and development			881				2,469				(1,588	)			-64	%
General and administrative			5,674				4,864				810				17	%
Total operating expenses			6,555				7,333				(778	)			-11	%
Loss from operations			(6,555	)			(7,150	)			595				-8	%
Other (expense) income, net			(1,973	)			3,253				(5,226	)			-161	%
Net loss		$	(8,528	)		$	(3,897	)		$	(4,631	)			-119	%

Revenue

Our research and development services revenue decreased by $0.2 million during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 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 nine months ended September 30, 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

The following table summarizes our research and development expenses by product candidate and program for the nine months ended September 30, 2025 and 2024 (in thousands):

		For the Nine Months Ended September 30,
Research and development expenses		2025				2024
ABP-110		$	28			$	96
ABP-102			180				710
ABP-150			14				19
ABP-201			37				21
ABP-100			-				-
SARS-Co V-2 neutralizing antibody program			-				20
Unallocated research and development expenses			622				1,603
Total		$	881			$	2,469

Research and development expenses decreased by $1.6 million for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, primarily due to the majority of the personnel being on furlough since October 2024. The overall decrease in expenses was a result of the decrease in research and development activities while raising additional capital necessary to restart our research and development programs.

General and Administrative Expenses

General and administrative expenses increased by $0.8 million for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, primarily due to an increase of approximately $2.4 million in costs of operating as a public company, including legal, accounting, and insurance expenses, partially offset by a decrease in payroll and related expenses of approximately $1.6 million as a result of the progressive reduction in employee headcount between the closing date of the Merger through September 30, 2025.

Other Income (Expense), Net

The net balance in other income (expense) decreased by $5.2 million for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. This change is primarily due to other income recognized during the nine months ended September 30, 2024 of approximately $3.5 million related to the reversal of the liability to one of the Company's research and development providers, as this provider informed the Company they were not pursuing collection on this liability. The remaining decrease is related to the increase in interest expense of approximately $0.8 million, primarily related to the fair value of the warrants issued under the promissory note with an executive, the loss of approximately $0.8 million for the change in fair value of embedded derivative liabilities, and $0.4 million loss on the settlement of the convertible notes during the nine months ended September 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 a net loss of $8.5 million and $3.9 million for the nine months ended September 30, 2025, and 2024, respectively. As of September 30, 2025, we had an accumulated deficit of $124.6 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. The Panel will maintain jurisdiction over the Company's listing through March 30, 2026, and may reconsider the terms of the exception or delist the Company if it fails to meet any of the imposed deadlines or becomes deficient with any listing rule during this period. There can be no assurance that the Company will be able to meet the conditions imposed by the Panel or regain and maintain compliance with Nasdaq's listing requirements. Failure to do so may result in the delisting of the Company's securities from Nasdaq.

On June 23, 2025, the Company received net proceeds of $1,840 from the Second Convertible Note pursuant to the SEPA.

In July and August 2025, the Company issued three Advance Notices to YA in accordance with the terms of the SEPA, under which YA purchased from the Company 91,336 common stock shares, raising $688 in total net proceeds.

As of September 30, 2025, the Company had cash of $328. 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 these 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 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 unaudited condensed 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 seek financing for 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 combined organization 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 nine months ended September 30, 2025 and 2024 (in thousands):

		For the Nine Months Ended September 30,
		2025				2024				Change				%
Net cash used in operating activities		$	(5,386	)		$	(5,215	)		$	(171	)			3	%
Net cash provided by investing activities		$	26			$	-			$	26				0	%
Net cash provided by financing activities		$	2,711			$	4,495			$	(1,784	)			-40	%

Net cash used in operating activities for the nine months ended September 30, 2025, decreased by $0.2 million as compared to the nine months ended September 30, 2024. The increase in cash used in operating activity is primarily due to the timing of payments of operating expense, with approximately $0.2 million increase in prepaid expenses for the nine months ended September 30, 2025.

Net cash provided by financing activities decreased by $1.8 million for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. During the nine months ended September 30, 2025, the Company received net proceeds of $1.9 million from the issuance of debt and proceeds of $0.1 million from the settlement of the Forward Purchase Agreement and proceeds of $0.7 million from the issuance of Advance Shares. During the nine months ended September 30, 2024, the Company received proceeds of $4.9 million from the issuance of notes payable to related parties, which were partially offset by the payments of $0.4 million in offering costs and a less than $0.1 million remaining payment on finance lease liabilities.

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 US 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.

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.