Abpro Holdings (ABPO) delisted to OTC Pink, flags going-concern risks in Q2
Abpro Holdings, Inc. reported for the quarter ended June 30, 2026 that it remains a development-stage biotech with no product revenue and a continued net loss. Net loss was $0.9 million for the quarter and $2.0 million for the first six months of 2026, compared with losses of $3.0 million and $6.9 million in the prior-year periods, reflecting sharply reduced research and development spending.
Cash increased to $4.2 million at June 30, 2026, largely from $7.3 million of proceeds from issuing 3.16 million shares under a Standby Equity Purchase Agreement, but current liabilities of $8.2 million left a total stockholders’ deficit of $3.0 million. Management states there is substantial doubt about the company’s ability to continue as a going concern within one year without additional capital. During the period, Abpro’s shares were delisted from Nasdaq and moved to the OTC Pink Limited Market, which the company notes may adversely affect liquidity and future fund-raising.
Positive
- Cash strengthened via equity financing: Cash rose to $4.2 million at June 30, 2026, supported by $7.3 million in gross proceeds from issuing 3,162,785 advance shares under the SEPA, improving liquidity versus the prior year-end.
Negative
- Going-concern substantial doubt: Management concludes there is substantial doubt about the company’s ability to continue as a going concern within one year, given limited cash and significant current liabilities.
- Nasdaq delisting and OTC trading: Abpro’s shares were delisted from Nasdaq in February 2026 and now trade on the OTC Pink Limited Market, which the company states may materially harm liquidity and its ability to raise capital.
- Stockholders’ deficit and heavy current obligations: At June 30, 2026, current liabilities were $8.2 million and total stockholders’ deficit was $3.0 million, indicating a highly leveraged, deficit position despite recent capital raises.
Key Figures
Key Terms
going concern financial
Standby Equity Purchase Agreement financial
SEPA Put Rights financial
embedded derivative liability financial
OTC Pink Limited Market market
excise tax liability regulatory
Earnings Snapshot
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AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(MARK ONE)
For the quarter ended
or
For the transition period from __________ to __________
Commission file number:
(Exact Name of Registrant as Specified in Its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
(Issuer’s telephone number)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| OTC Pink Ltd. Market | ||||
| OTC Pink Ltd. Market |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large, accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large, accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of August 14, 2026, there were
ABPRO HOLDINGS, INC.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2026
TABLE OF CONTENTS
| Page | |
| Part I. Financial Information | 1 |
| Item 1. Interim Financial Statements (Unaudited) | 1 |
| Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 | 1 |
| Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2026 and 2025 | 2 |
| Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the Three and Six Months Ended June 30, 2026 and 2025 | 3 |
| Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025 | 4 |
| Notes to Unaudited Condensed Consolidated Financial Statements | 5 |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 |
| Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk | 31 |
| Item 4. Controls and Procedures | 31 |
| Part II. Other Information | 32 |
| Item 1. Legal Proceedings | 32 |
| Item 1A. Risk Factors | 32 |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. | 35 |
| Item 3. Defaults Upon Senior Securities | 36 |
| Item 4. Mine Safety Disclosures | 36 |
| Item 5. Other Information | 36 |
| Item 6. Exhibits | 36 |
| Part III. Signatures | 37 |
i
PART I - FINANCIAL INFORMATION
Item 1. Interim Financial Statements.
ABPRO HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | - | |||||||
| Prepaid expenses and other current assets | ||||||||
| Security deposits | ||||||||
| SEPA put rights asset | - | |||||||
| Restricted cash | - | |||||||
| Total current assets | ||||||||
| Patents, net | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and stockholders’ deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Notes payable, current – related parties | ||||||||
| Total current liabilities | ||||||||
| Commitments and Contingencies (Note 7) | ||||||||
| Stockholders’ deficit: | ||||||||
| Preferred stock, $ | - | - | ||||||
| Common stock, $ | - | |||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Abpro Holdings, Inc.’s stockholders’ deficit | ( | ) | ( | ) | ||||
| Non-controlling interest | ||||||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
ABPRO HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
| For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | $ | $ | $ | $ | ||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other (expense) income: | ||||||||||||||||
| Gain on settlement of liabilities | ||||||||||||||||
| Other income | - | - | - | |||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest income | ||||||||||||||||
| Change in fair value of forward purchase agreement asset | - | - | - | ( | ) | |||||||||||
| Change in fair value of SEPA put rights asset | - | ( | ) | ( | ) | ( | ) | |||||||||
| Change in fair value of embedded derivative liability | - | ( | ) | - | ( | ) | ||||||||||
| Loss on settlement of convertible notes | - | ( | ) | - | ( | ) | ||||||||||
| Total other income (expense), net | ( | ) | ( | ) | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share, basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average shares outstanding - basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Reflects a 1-for-30 reverse stock split effective October 31, 2025
2
ABPRO HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(In thousands, except share and per share amounts)
(Unaudited)
| Common Stock | Treasury Stock | Additional Paid-In |
Accumulated | Total Abpro’s Stockholders’ |
Non-controlling | Total Stockholders’ |
||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | Interest | Deficit | ||||||||||||||||||||||||||||
| Balances, as of December 31, 2025 | $ | - | - | $ | - | $ | $ | ( | ) | $ | ( | ) | $ | | $ | ( | ) | |||||||||||||||||||
| Issuance of Advance Shares, net of issuance costs of $ | - | - | - | - | ||||||||||||||||||||||||||||||||
| Share-based compensation | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | - | ( | ) | ||||||||||||||||||||||||
| Balances, as of March 31, 2026 | $ | - | $ | - | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||
| Share-based compensation | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | - | ( | ) | ||||||||||||||||||||||||
| Balances, as of June 30, 2026 | $ | - | - | $ | | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||
| Common Stock | Treasury Stock | Additional Paid-In |
Accumulated | Total Abpro’s Stockholders’ |
Non-controlling | Total Stockholders’ |
||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | Interest | Deficit | ||||||||||||||||||||||||||||
| Balances, as of December 31, 2024 | $ | - | ( | ) | $ | - | $ | $ | ( | ) | $ | ( | ) | $ | | $ | ( | ) | ||||||||||||||||||
| Common stock issued for services | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
| Warrants issued to related party lender | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
| Share-based compensation | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | - | ( | ) | ||||||||||||||||||||||||
| Balances, as of March 31, 2025 | $ | - | ( | ) | $ | - | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||
| Share-based compensation | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
| Common stock issued upon conversion of convertible notes | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | - | ( | ) | ||||||||||||||||||||||||
| Balances, as of June 30, 2025 | $ | - | ( | ) | $ | - | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Reflects a 1-for-30 reverse stock split effective October 31, 2025
3
ABPRO HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| For the Six Months Ended June 30, |
||||||||
| 2026 | 2025 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization expense | ||||||||
| Share-based compensation | ||||||||
| Amortization of operating lease right-of-use assets | - | |||||||
| Noncash interest expense | - | |||||||
| Loss on settlement of convertible notes | - | |||||||
| Gain on settlement of liabilities (Note 7) | ( | ) | ( | ) | ||||
| Amortization of debt discount | - | |||||||
| Change in fair value of forward purchase agreement asset | - | |||||||
| Change in fair value of SEPA put rights asset | ||||||||
| Change in fair value of embedded derivative liability | - | |||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Accounts payable | ( | ) | ||||||
| Accrued expenses | ( | ) | ||||||
| Income taxes payable | - | |||||||
| Operating lease liability | - | ( | ) | |||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Gross proceeds from issuance of Advance Shares | - | |||||||
| Proceeds from Convertible Notes | - | |||||||
| Proceeds from settlement of Forward Purchase Agreement | - | |||||||
| Payments on Note payable | - | ( | ) | |||||
| Payments on Notes payable, related parties | ( | ) | - | |||||
| Proceeds from Notes payable, related parties | - | |||||||
| Net cash provided by financing activities | ||||||||
| Net change in cash and restricted cash | ( | ) | ||||||
| Cash and restricted cash - beginning of period | ||||||||
| Cash and restricted cash - end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information and non-cash transactions: | ||||||||
| Interest paid | $ | $ | ||||||
| Accrued issuance costs for Advance Shares | - | |||||||
| Common stock issued in settlement of convertible notes and embedded derivative liability | - | |||||||
| Fair value of common stock issued for services | - | |||||||
| Prepaid expenses financed through Note payable | - | |||||||
| As reported within the unaudited condensed consolidated balance sheets: | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash | - | |||||||
| Total cash and restricted cash as presented in the balance sheet | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
ABPRO HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
1. Organization and Description of the Business
Organization
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.
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.”
Reverse Stock Split
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 (the “Effective Time”), to effect a one-for-thirty (
As a result of the Reverse Stock Split, every
All of the Company’s historical share and per share information related to issued and outstanding common stock, restricted stock units, and options and warrants exercisable for common stock in these financial statements have been adjusted, on a retroactive basis, to reflect this
Risks and Uncertainties
The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of more advanced or effective therapies, dependence on key executives, protection of and dependence on proprietary technology, compliance with government regulations and ability to secure additional capital to fund operations. Programs currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure, and extensive compliance-reporting capabilities. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.
Going Concern
The Company is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date that these condensed consolidated financial statements are issued. Through June 30, 2026, the Company has funded its operations mainly through equity and debt financings, including the proceeds from the issuance of shares under the SEPA (see Note 10), and to a lesser extent, payments received in connection with collaboration and license agreements.
5
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 $
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 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 (see Note 10) and on favorable terms, if at all, in the future.
As of June 30, 2026, the Company had cash of $
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 from 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. These unaudited 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.
2. Summary of Significant Accounting Policies
Basis of Presentation
The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The accompanying unaudited condensed consolidated financial statements include all of the accounts of the Company and its subsidiaries, Abpro Corporation and AbMed Corporation (“AbMed”). All intercompany balances and transactions have been eliminated in consolidation.
6
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Significant estimates in these condensed consolidated financial statements include share-based compensation expense, fair value of derivative assets and liabilities, valuation and realizability of deferred tax assets and the ability to continue as a going concern. On an ongoing basis, the Company evaluates its estimates, judgments, and methodologies. The Company bases its estimates on historical experience and on various other assumptions believed to be reasonable. Due to the inherent uncertainty involved in making estimates, actual results could differ materially from those estimates.
Unaudited Interim Condensed Consolidated Financial Statements
The accompanying interim condensed consolidated financial statements and the related footnote disclosures are unaudited. These unaudited interim financial statements have been prepared on the same basis as the audited financial statements, and in management’s opinion, include all adjustments, consisting of only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of June 30, 2026, its results from operations for the three and six months ended June 30, 2026 and 2025, and cash flows for the six months ended June 30, 2026 and 2025. The results from operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the year ended December 31, 2026 or any other period. The December 31, 2025 year-end condensed consolidated balance sheet was derived from audited annual financial statements but does not include all disclosures from the annual financial statements.
Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2025 and the related notes included in the Company’s Annual Report on Form 10-K, filed with the SEC on April 15, 2026 (the “Annual Report”), which provides a more complete discussion of the Company’s accounting policies and certain other information.
There have been no significant changes to the significant accounting policies disclosed in Note 2 of the audited consolidated financial statements as of and for the year ended December 31, 2025 included in the Company’s Annual Report.
Segment Reporting
ASC Topic No. 280, Segment Reporting (“ASC 280”), establishes standards for the way that public business entities report information about operating segments in their annual consolidated financial statements and requires that those entities report selected information about operating segments in interim financial reports. ASC 280 also establishes standards for related disclosures about products and services, geographic areas and major customers. The Company’s business segments are based on the organization structure used by the chief operating decision maker (“CODM”) for making operating and investment decisions and for assessing performance.
In accordance with ASC 280, the Company has determined that it operates as a single reportable segment, which is the business of development of novel antibodies, primarily in the areas of immuno-oncology, ophthalmology and infectious disease. The financial results of the Company’s operations are managed and reported to the Chief Executive Officer, who is considered the Company’s CODM, on a consolidated basis.
7
Net Loss Per Share
Basic net loss per share attributable to common stockholders is computed by dividing net loss attributable to common stockholders by the weighted-average number of common stock shares outstanding during the period without consideration of potentially dilutive common stock. Diluted net loss per share attributable to common stockholders reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company unless the inclusion of such shares would be anti-dilutive. As the Company has incurred losses for the three and six months ended June 30, 2026 and 2025, basic and diluted net losses per share are the same for all periods presented.
The following table presents the potentially dilutive shares that were excluded from the computation of diluted net loss per share of common stock attributable to common stockholders, because their effect was anti-dilutive:
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Warrants | ||||||||
| Stock options | ||||||||
| Convertible Notes | - | |||||||
| Unvested restricted stock units | - | |||||||
| Total | ||||||||
Recently Issued Accounting Pronouncements
On November 4, 2024, the FASB issued ASU 2024-03, Accounting Standards Update 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The amendments in this ASU do not change or remove current expense disclosure requirements; however, the amendments affect where such information appears in the notes to financial statements because entities are required to include certain current disclosures in the same tabular format disclosure as the other disaggregation requirements in the amendments. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the potential impact that the adoption of this standard will have on its financial statements.
Management does not believe that any additional recently issued, but not yet effective, accounting standards, if currently adopted, would have a material impact on the Company’s financial statements.
3. Accrued Expenses
Accrued expenses included the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Accrued salaries and wages | $ | $ | | |||||
| Accrued professional fees | ||||||||
| Accrued issuance costs | ||||||||
| Accrued interest | ||||||||
| BOD compensation | ||||||||
| Other accrued expenses | ||||||||
| Total accrued expenses | $ | $ | ||||||
8
4. Fair Value Measurements
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025, and indicates the fair value hierarchy of the valuation inputs the Company’s utilized to determine such fair value:
| June 30, | December 31, | |||||||||||
| Description | Level | 2026 | 2025 | |||||||||
| Assets: | ||||||||||||
| SEPA put rights asset (Note 10) | 3 | $ | - | $ | ||||||||
The fair value of the SEPA Put Rights asset was estimated as the sum of the fair values of the put rights under each assumed advance notice over the term of the SEPA. The number of shares of common stock under each advance notice was based on the historical trading volumes of the Company’s common stock taking into account various beneficial ownership and daily volume limitations. The trading of the Company’s common stock was suspended at the open of trading on Nasdaq on February 23, 2026 and as a result, the Company is unable to comply with the registration and listing requirements to raise capital under the SEPA. As a result, as of June 30, 2026, the fair value of SEPA put rights asset was deemed de minimis.
| December 31, | ||||
| 2025 | ||||
| Stock price | $ | |||
| Risk-free interest rate | % | |||
| Exercise price | $ | |||
| Expected term (in years) | | |||
| Expected volatility | | % | ||
| Expected dividend yield | % | |||
| Number of shares of common stock under each advance notice | ||||
The changes in the fair value of Level 3 financial assets and liabilities for the six months ended June 30, 2026 are as follows:
| SEPA Put Rights Asset | ||||
| Fair value as of January 1, 2026 | $ | |||
| Change in fair value | ( | ) | ||
| Fair value as of June 30, 2026 | $ | |||
5. License and Collaboration Agreements
NJCTTQ Collaboration Agreement
In January 2019, the Company entered into a collaboration agreement with Nanjing Chia Tai Tianquing Pharmaceutical Co., Ltd. (“NJCTTQ”) to research, develop and commercialize two anti-Claudin 18.2 lead antibodies (the “NJCTTQ agreement”). Under the NJCTTQ agreement, the Company granted a non-exclusive, non-sublicensable research license and an exclusive, sublicensable license to NJCTTQ within the People’s Republic of China and Thailand (the “NJCTTQ Territory”). The initial term of this agreement was
9
The Company was eligible to receive up to an aggregate of $
The Company and NJCTTQ agreed to pay reciprocal royalties, with each of them paying the other party low single-digit royalties, tiered based on net sales per calendar year in its territory. The agreement remains unrenewed as of June 30, 2026 after the expiration of its initial term. However, notwithstanding the agreement’s expiration, the low single-digit royalties and the $
ABP-201 Collaboration and License Agreement
In January 2020, the Company’s consolidated subsidiary, Abmed, entered into a collaboration and license agreement with ABI (the “ABP-201 Agreement”), pursuant to which the Company granted to ABI an exclusive, royalty-bearing, license under specified patent rights to make, use and sell certain of its proprietary ANG-2/VEGF-HIRK bispecific antibodies within the licensed territory comprising People’s Republic of China, Japan, South Korea, Southeast Asia, the Middle East and the Commonwealth of Independent States. Unless earlier terminated in accordance with its terms, the agreement remains in effect on a country-by-country basis until the expiration of the last royalty term in such country.
Under the ABP-201 Agreement, ABI agreed to use commercially reasonable efforts to reach certain development and commercialization milestones for such bispecific antibodies within specified territories and timeframes. ABI is committed to pay the Company up to $
Celltrion Collaboration and License Agreement
In September 2022, the Company entered into an exclusive collaboration and license agreement with Celltrion (the “Original Celltrion Agreement”). The Company and Celltrion entered into an amendment to the agreement in October 2024 in connection with the execution of the Celltrion Subscription Agreement (the “Amended Celltrion Agreement”). The amendment is subject to termination by the Company or Celltrion if (i) the share purchase under the Celltrion Subscription Agreement is not completed, or (ii) the Celltrion Subscription Agreement is terminated pursuant to Section 7 of the Celltrion Subscription Agreement. Under the Amended Celltrion Agreement, the Company granted Celltrion a worldwide exclusive license under specified patent rights to develop, make, have made, import, export, use, have used, sell and have sold certain of its proprietary ABP-102 bispecific antibodies. The license agreement also provides that the Company is to perform certain preclinical in vitro studies. The license agreement will remain in effect for so long as ABP-102 is being developed or commercialized anywhere in the world. Celltrion may terminate the license agreement at any time by providing six months prior written notice to the Company.
Celltrion is committed to paying the Company up to $
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During the three and six months ended June 30, 2026 and 2025, the Company did not recognize any revenue under the agreement with Celltrion. The Company had $
Milestone Payments. The Company is entitled to development milestones under the Original Celltrion Agreement and certain regulatory milestone payments which are paid upon receipt of regulatory approvals. Except for the first milestone of $
Profit Splits. As the license is deemed to be the predominant item to which profit splits relate, the Company will recognize revenue when the related sales or third-party collaborator income occur. No profit split revenue has been recognized from inception through June 30, 2026.
6. Commitments under Research and Collaboration Agreements
MedImmune License Agreement
In August 2016, the Company entered into a collaboration and license agreement with MedImmune Limited (“MedImmune”), pursuant to which the Company received from MedImmune an exclusive, worldwide, royalty-bearing, sublicensable (subject to certain conditions) license to certain intellectual property rights relating to the Company’s ABP-200 product candidates (the “MedImmune License Agreement”). The Company agreed to use commercially reasonable efforts to reach certain development and commercialization milestones for such bispecific antibodies within specified timeframes. Unless earlier terminated in accordance with its terms, the MedImmune License Agreement, as amended, remains in effect on a country-by-country basis until the expiration of the last royalty term in such country as to be determined by the launch of products based on the ABP-200 product candidates. The Company is no longer developing ABP-200.
Under the MedImmune License Agreement, the Company agreed to pay milestone and royalty payments, including up to $
NCI License Agreement
In August 2017, the Company entered into a patent license agreement with the National Cancer Institute (the “NCI”), a division of the National Institutes of Health (the “NIH”), pursuant to which the Company received an exclusive, worldwide license to make, use, sell, offer to sell and import products covered by the licensed patents in the field of using certain monoclonal antibodies as monospecific or bispecific antibodies for the treatment of liver cancer (the “NCI License Agreement”). The license agreement was amended in May 2020 and October 2023 and the field of use was narrowed to the development and commercialization of a bispecific antibody for the treatment of GPC-3 expressing liver cancer using a particular moiety for targeting GPC3 and the timeline for development and commercialization was extended. Unless earlier terminated, the Company’s agreement with NCI will expire upon expiration of all licensed patent rights. The Company may also terminate the agreement as to any licenses in any country or territory upon 60 days written notice.
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Pursuant to the NCI agreement and amendments, the Company agreed to pay low single-digit royalties based on net sales of licensed products as well as milestone payments of up to $
The Company also has to pay the guaranteed annual minimum royalties of $
The Company also agreed to reimburse patent costs for all documented out of pocket costs associated with the preparation, filing, prosecution and maintenance of patent rights. During both the six months ended June 30, 2026 and 2025, the Company did not incur any expenses related to the patent costs reimbursements.
Mabwell License Agreement
In October 2020, the Company entered into an exclusive collaboration and license agreement with Mabwell (the “Mabwell License Agreement”). The agreement was amended in November 2020. Under the Mabwell license agreement, the Company received a non-exclusive, royalty-free research purpose license as well as an exclusive commercial license within certain territories, as defined in the agreement, to Mabwell’s series of anti-SARS-CoV-2 monoclonal antibodies. Under the agreement, the Company is responsible for conducting at its sole expense, research and preclinical, clinical and other developments of any licensed products and bears all development costs and expenses related to obtaining or maintenance of marketing authorizations of licensed products in its territories. Mabwell is obligated, at the Company’s request, to supply the Licensed Antibodies to the Company for clinical trial purpose at costs plus margin as defined in the agreement. The parties agreed to undertake certain joint clinical research and development activities with a portion of the costs contributed by Mabwell. Unless earlier terminated, the Mabwell License Agreement will expire on the occurrence of the last to expire royalty term, which is the later of a) the expiration of the last to expire valid claim of the patent rights and b) ten years from the first commercial sale of such Licensed Product, and determined on jurisdiction-by-jurisdiction basis. Either party may terminate the agreement in the event of any uncured material breach by the other party.
The agreement provides for development milestones of up to $
During the three and six months ended June 30, 2026 and 2025, development activities under the Mabwell collaboration agreement were immaterial to the condensed consolidated financial statements. No milestones have been reached and no products were sold under the Mabwell License Agreement through June 30, 2026.
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MSK License Agreement
In March 2017, the Company entered into an exclusive license agreement with Memorial Sloan Kettering Cancer Center (the “MSK License Agreement”), pursuant to which the Company received an exclusive, royalty-bearing, worldwide license under specified patent rights to make, use and sell certain of MSK’s proprietary Her2-huOKT3 bispecific antibodies. The agreement was amended on March 31, 2017, on March 31, 2018, and January 1, 2020. Unless earlier terminated in accordance with its terms, the agreement was to remain in effect on a country-by-country basis until the expiration of the last royalty term in such country as to be determined by the launch of products based on MSK antibodies. On September 19, 2023, MSK License Agreement was terminated by MSK due to the Company’s failure to make the payments for the patent costs reimbursements discussed below.
Under the MSK License Agreement, as amended, the Company agreed to use commercially reasonable efforts to reach certain development and commercialization milestones for such bispecific antibodies within specified territories and timeframes. The Company was committed to pay MSK up to $
The Company also agreed to reimburse patent costs for all documented out of pocket costs associated with the preparation, filing, prosecution and maintenance of patent rights in the license territory. During the three and six months ended June 30, 2026 and 2025, the Company incurred no expenses related to the patent costs reimbursements. As of both June 30, 2026 and December 31, 2025, the liabilities for the patent costs reimbursements were $
As of both June 30, 2026 and December 31, 2025, the accrued liabilities for the unpaid interest on the outstanding minimum royalty and milestone payments due to MSK were $
VAZYME License agreement
In April 2021, the Company entered into a License Agreement with VAZYME Biotech Co., Ltd (“VAZYME”) (the “VAZYME License Agreement”), pursuant to which the Company was granted an exclusive, perpetual, royalty-bearing, worldwide license under specified patent rights to research, develop and commercialize VAZYME proprietary anti-SARS-CoV-2 monoclonal antibodies. Unless earlier terminated in accordance with its terms, the agreement remains in effect on a country-by-country basis until the expiration of the last royalty term in such country.
Under the VAZYME License Agreement, the Company agreed to use commercially reasonable efforts to reach certain research and development, and commercialization milestones for such antibodies. The Company also agreed to pay $
In December 2021, the Company entered into a Cooperation Agreement with Chengdu Bio-Innovate Pharmaceutical Technology Co., Ltd (“Bio-Innovate”) and a three-way sharing agreement with VAZYME and Bio-Innovate (“the Company”, “VAZYME” and “Bio-Innovate”, collectively “all parties”), pursuant to which the Company entrusted Bio-Innovate to perform certain preclinical testing and all parties agreed that VAZYME will ship the agreed antibodies to Bio-Innovate rather than the Company to fulfill the requirements under the VAZYME License Agreement.
For the three and six months ended June 30, 2026 and 2025, the Company did not incur any expenses related to the VAZYME License Agreement or the Cooperation Agreement. As of both June 30, 2026 and December 31, 2025, the accrued liabilities under this agreement were $
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7. Commitments and Contingencies
Litigation and other matters
The Company, from time to time, is subject to legal proceedings and claims that arise in the ordinary course of business. Resolution of any such matter could have a material adverse effect on the results of operations and financial condition. The Company considers all claims on a periodic basis and based on known facts assesses whether potential losses are considered reasonably possible, probable and estimable. Based upon this assessment, the Company then evaluates disclosure requirements and whether to accrue for such claims in its consolidated financial statements. The Company records a provision for contingent liability when it is both probable that a loss has been incurred and the amount of the loss can be reasonably estimated.
On September 12, 2023, a contract research organization (“CRO”) vendor filed a lawsuit against the Company based on the Company’s failure to make certain installments pursuant to a settlement agreement entered into with this CRO vendor on January 23, 2023. Under the settlement agreement, the Company agreed to pay a total of $
In addition to the lawsuit from a CRO vendor above, the Company accrued $
In June 2023, the Company received a notice of breach from MSK followed by a notice of termination in September 2023, pursuant to which MSK demanded payments totaling $
The MedImmune License Agreement (see Note 6) provides for a research plan with target dates for an IND application (July 2021) and Phase II commencement (December 2022). These target dates were not met, which gives MedImmune (now AstraZeneca) a termination right. The Company does not expect a material impact on its business if MedImmune/AstraZeneca terminates this agreement. This license was originally entered into in connection with the development of ABP-200, which the Company is no longer developing. The Company believes that it does not need the intellectual property licensed under that agreement for the development and eventual commercialization of ABP-201 or any of its other programs.
On June 17, 2025, the Company received a complaint from a former director asserting that the Company owes the former director a total of $
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On October 22, 2025, the Company received a demand for payment from Integral Molecular, Inc. in the amount of approximately $
On October 23, 2025, the Company received a demand for payment from Brookline Capital Markets, a division of Arcadia Securities LLC, in the amount of $
During the three months ended June 30, 2026 and 2025, the Company recognized a gain on settlement of the balances due for services provided by Nelson Mullins Riley & Scarborough LLP of $
Excise Tax Liability
At the Closing Date, the Company assumed the excise tax liability of $
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal
During the second quarter of 2024, the IRS issued regulations with respect to the timing and payment of the excise tax. Pursuant to those regulations, the Company would need to file a return and remit payment for any liability incurred during the period from January 1, 2023 to December 31, 2023 on or before October 31, 2024. The Company filed the excise tax return in October 2024 and engaged with the IRS in determining a payment plan for the balance.
The Company was unable to pay its obligation in full, and, as such, it was subject to additional interest and penalties which were estimated at
In March 2025, the Company received the letter from the Internal Revenue Service of the United States Department of Treasury (the “IRS”), setting up the meeting with the Company to discuss the unsettled tax matters of ACAB and referencing $
On November 24, 2025, the IRS published the rule providing additional clarification on the application of the excise tax to redemptions of stock (the “2025 Rule”). Among other things, the 2025 Rule provided transitional relief for stock issued before August 16, 2022 that was subject to mandatory redemption or a unilateral put option. As ACAB issued the redeemable stock prior to August 16, 2022 and this stock was subject to mandatory repurchase upon certain events outside of ACAB’s control, the Company concluded that the redemptions of ACAB redeemable stock qualified for the transitional relief. As a result, the Company derecognized the $
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Merger Earnout
Former holders of the Legacy Abpro common stock and Legacy Abpro preferred stock are eligible to receive up to
8. Forward Purchase Agreement
On November 7, 2024, ACAB and Legacy Abpro entered into a Confirmation of an OTC Equity Prepaid Forward Transaction (the “Forward Purchase Agreement” or “Transaction”) with YA (the “Seller”) to which a maximum of up to
On January 28, 2025, YA elected to effect an Optional Early Termination (as described in the Forward Purchase Agreement) with respect to all
The Forward Purchase Agreement was accounted for at fair value as an asset in accordance with the guidance in ASC Topic 815 Derivatives and Hedging (“ASC 815”), with subsequent changes in the fair value recorded in profits and losses. The fair value of the Forward Purchase Agreement asset was $
9. Notes Payable
Note Payable
In January 2025, the Company entered into an insurance premium financing agreement and borrowed a total principal amount of $
Notes Payable – Related Parties
Promissory Note with ABI
On October 18, 2023, the Company entered into a promissory note agreement with Abpro Bio International, Inc. (“ABI”), a significant investor in the Company, to receive up to $
As of June 30, 2026 and December 31, 2025, the outstanding principal balances under the promissory notes with ABI was $
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Promissory Notes with Executive and Director
On December 29, 2023, Legacy Abpro issued promissory notes to one of its executives and one of its directors, in the principal amount of $
On April 18, 2024, the Company entered into a separate promissory note agreement with the same executive to receive, as amended, up to $
On February 7, 2025, the Company issued
In January 2026, the Company entered into a loan agreement with its Chief Executive Officer and Board of Directors Chairman for an unsecured loan in the principal amount of $
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10. Standby Equity Purchase Agreement
Convertible Notes
On October 30, 2024, Legacy Abpro and ACAB entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, Ltd. (“YA”).
Subject to the satisfaction of the conditions set forth in the SEPA, YA committed to advance to the Company the aggregate principal amount of up to $
On November 14, 2024 (the “First Convertible Note Issuance Date”), pursuant to the SEPA, the Company entered into a Convertible Promissory Note (the “First Convertible Note”) with YA for $
On June 23, 2025 (the “Second Convertible Note Issuance Date”), pursuant to the SEPA, the Company entered into a Convertible Promissory Note (the “Second Convertible Note”) and together with the First Convertible Note, the “Convertible Notes”) with YA for $
The Convertible Notes had the maturity date of
The Convertible Notes were convertible at the option of the holder at any time after the issuance dates based on the conversion price determined as the lower of (i) $
On April 20, 2025, the Company entered into an amendment to SEPA with YA, pursuant to which, the definition of the conversion price was amended to state that the Fixed Price should be adjusted (downwards only) to equal the VWAP of the Common Shares over the three (
The Convertible Notes were redeemable at the option of the Company if the volume-weighted-average price (“VWAP”) of the Company’s Common Stock was less than $
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Under the terms of the Convertible Notes, the Amortization Event was to occur if (i) the daily VWAP is less than the Floor Price for
It was determined, in accordance with ASC 815, that the Conversion Feature was required to be bifurcated due to the adjustments to the settlement amount of this embedded feature that are not inputs to the fair value measurement of a fixed-for-fixed forward or option on equity shares, and recorded as a liability (the “Embedded Derivative Liability”) at fair value with a corresponding amount recorded as a discount on the Convertible Notes. The Embedded Derivative Liability was marked to market at each reporting period end with any changes recorded in other income or expense. The fair value of the Embedded Derivative Liability associated with the First Convertible Note was estimated at $
During the three months ended June 30, 2025, the First Convertible Note was fully converted at the option of YA into an aggregate of
The total discount resulting from the Convertible Note Discount and the bifurcation of the Embedded Derivative Liability at the issuance dates are amortized over the terms of the Convertible Notes through non-cash interest expense using the effective interest method. The non-cash interest expense related to the discount amortization was $
SEPA Put Rights
Under the terms of the SEPA, starting at and ending following the 24-month anniversary of the Closing Date, the Company has the right, but not the obligation (“SEPA Put Rights”), to issue shares of its common stock to YA (“Advance Shares”, and such issuance and sale, an “Advance”) and YA shall subscribe for and purchase from the Company such Advance Shares, through written notice by the Company to YA (“Advance Notice”), provided (i) no balance is outstanding under a Convertible Note, and (ii) there is an effective Resale Registration Statement filed with the SEC for the resale under the Securities Act of the shares of Common Stock to be issued pursuant to such Advance Notice. The SEPA contemplates purchase by YA of up to $
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For as long as there was an outstanding balance under a Convertible Note, YA had the right, but not the obligation, by delivery to the Company of Investor Notices (as defined in the SEPA), to cause an Advance Notice to be deemed delivered by YA, which triggers the issuance and sale of Advance Shares to YA, subject to terms and conditions as specified in the SEPA.
The purchase price for the Advance Shares is the price per Advance Share obtained by multiplying the Company’s stock price (i) by
The Company accounted for the SEPA Put Rights as an asset at fair value in accordance with the guidance in ASC 815, due to the adjustments to the settlement amount of this derivative instrument that are not inputs to the fair value measurement of a fixed-for-fixed forward or option on equity shares.
In January and February 2026, the Company issued
As a result of the written notification received from the Nasdaq Panel on February 18, 2026 (see Note 1), the trading of the Company’s common stock was suspended at the open of trading on NASDAQ on February 23, 2026 and as a result, the Company is unable to comply with the registration and listing requirements to raise capital under the SEPA. As a result, as of June 30, 2026, the fair value of SEPA put rights asset was deemed de minimis. The fair value of the SEPA Put Rights was $
11. Stockholders’ Equity
Common and Preferred Stock
At the Closing Date, the Company’s articles of incorporation were amended to designate two classes of stock; preferred and common stock. The articles of incorporation of the Company authorize
The Company’s Amended and Restated Certificate of Incorporation provides the Company’s board of directors with the authority to issue up to
Warrants
As of June 30, 2026 and December 31, 2025, there were
The Company will not be obligated to deliver any common stock pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the common stock issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable, and the Company will not be obligated to issue shares of common stock upon exercise of a warrant unless common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
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The Company may redeem the Public Warrants:
| ● | in whole and not in part; | |
| ● | at a price of $ | |
| ● | upon not less than 30 days’ prior written notice of redemption given after the warrants become exercisable to each warrant holder; and | |
| ● | if, and only if, the reported last sale price of the Series A common stock equals or exceeds $ |
If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants.
As of June 30, 2026, and December 31, 2025, there were
On February 7, 2025, the Company issued
The following presents information about warrants to purchase common stock outstanding as of June 30, 2026:
| Weighted- | Average | |||||||||||
| Average | Remaining | |||||||||||
| Shares | Exercise Price | Contractual Life | ||||||||||
| Warrants | $ | |||||||||||
No warrants were exercised during the six months ended June 30, 2026 or 2025.
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12. Share-Based Compensation
2024 Equity Incentive Plan
The Company’s 2024 Equity Incentive Plan (the “2024 Plan”) became effective at the Closing Date. As of June 30, 2026,
Under the 2024 Plan, the Company can grant non-statutory stock options, or NSOs, incentive stock options, or ISOs, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), unrestricted stock, performance awards and other forms of awards to eligible employees and nonemployees. In July 2025, the Company granted a total of
2014 Stock Incentive Plan
The 2014 Stock Incentive Plan (the “2014 Plan”) of Legacy Abpro expired as of the Closing Date, in accordance with its original terms. As a result of the expiration, no further awards may be granted under the 2014 Plan. As of June 30, 2026, there were
The Company granted restricted stock units (“RSUs”) to various employees and directors under the 2014 Plan. These RSUs cliff vested on the first anniversary of the grant date.
Stock Options
The summary of the Company’s stock option activity is as follows:
| Number of Stock Options | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Life | ||||||||||
| Outstanding at December 31, 2025 | $ | | ||||||||||
| Granted | - | - | - | |||||||||
| Exercised | - | - | - | |||||||||
| Forfeited/Expired/Cancelled | ( | ) | $ | - | ||||||||
| Outstanding at June 30, 2026 | $ | |||||||||||
| Exercisable at June 30, 2026 | $ | | ||||||||||
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Restricted Stock Units
The summary of the Company’s restricted stock unit activity is as follows:
| Weighted- | ||||||||||||
| Weighted- | Average | |||||||||||
| Average | Remaining | |||||||||||
| Number of | Grant Date | Vesting | ||||||||||
| Shares | Fair Value | Period | ||||||||||
| Outstanding at December 31, 2025 | $ | |||||||||||
| Granted | — | — | — | |||||||||
| Vested | ( | ) | $ | — | ||||||||
| Forfeited | — | — | — | |||||||||
| Outstanding at June 30, 2026 | $ | |||||||||||
As of June 30, 2026,
On October 22, 2024, the Company’s board of directors authorized the issuance of
Share-Based Compensation Expense
The summary of the recorded share-based compensation expense is as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Research and development | $ | - | $ | $ | - | $ | ||||||||||
| General and administrative | ||||||||||||||||
| Total share-based compensation | $ | $ | $ | $ | ||||||||||||
As of June 30, 2026, there was no unrecognized compensation cost related to stock option awards. As of June 30, 2026, there was approximately $
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13. Related Parties
The Company has certain promissory notes outstanding with executives and directors as of June 30, 2026 and December 31, 2025. See Note 9.
On January 15, 2020, Legacy Abpro entered into an agreement for various consulting services, as defined in the agreement, with a former director of Legacy Abpro. On January 1, 2023, the Company entered into a new consulting agreement with the same director, which superseded the agreement dated in January 2020. The agreement was terminated during the year ended December 31, 2024. As of December 31, 2025, the unpaid amount was $
On December 1, 2021, Legacy Abpro entered into a consulting agreement with a member of the Company’s Board of Directors. Under the agreement, Legacy Abpro is obligated to pay fees for various consulting services, as defined in the agreement. This agreement was terminated in May 2022. The Company did not incur any expenses under this agreement during the years ended December 31, 2025 and 2024. As of June 30, 2026 and December 31, 2025, the unpaid amounts were $
On March 13, 2023, the Company’s Former CEO, upon the approval of the Company’s Board of Directors, transferred $
On July 20, 2025, the Company entered into a consulting agreement with the Company’s CEO (the “CEO Consulting Agreement”). In connection with the CEO Consulting Agreement, the Company issued
14. Subsequent Events
On August 5, 2026, the Company received a demand letter from counsel to a former officer, in connection with the termination of his employment in November 2025, claiming bonus, unpaid wages during the furlough period and contractual severance payments. The demand letter requested the total payment of $
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Item 2. 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.
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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.
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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.
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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.
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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; |
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| ● | 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.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not required for smaller reporting companies.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Management, under the supervision and with the participation of the Company’s principal executive and principal financial officer, have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Disclosure controls and procedures are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were not effective as of June 30, 2026 due to the material weaknesses described below.
Remediation Efforts to Address a Previously Identified Material Weakness in Internal Control over Financial Reporting
As described in Item 9.A Controls and Procedures of our 2025 Form 10-K, for the year ended December 31, 2025, management identified material weaknesses in its internal controls, related to the Company having inadequate existing control to ensure timely identification and evaluation of contractual obligations such as license agreements and failing to design and maintain formal written policies and procedures regarding internal controls over financial reporting. As of December 31, 2025, the Company successfully remediated the previous material weakness related to segregation of duties over internal wire transfer authorization and access to bank accounts. The Company is in process of implementing and testing its internal control to address the remaining material weaknesses.
A material weakness is a deficiency, or combination of deficiencies, in a company’s internal control over financial reporting such that there is a reasonable possibility that a material misstatement of its annual or interim financial statements will not be prevented or detected on a timely basis.
The Company will continue to review and improve its internal controls over financial reporting to address the underlying causes of the material weaknesses and control deficiencies. Such material weaknesses and control deficiencies will not be remediated until the Company’s remediation plan has been fully implemented, and it has concluded that its internal controls have been operating effectively for a sufficient period of time.
To address these material weaknesses, management, under the oversight of the audit committee, has devoted, and plans to continue to devote significant effort and resources to the remediation and improvement of its internal control over financial reporting:
| - | The Company redesigned and implemented proper authorization procedures and access controls with respect to wire transfers and bank account access. | |
| - | The Company will continue to implement a review process by management and the Board of Directors to ensure timely identification of liabilities related to the contractual obligations and license agreements. | |
| - | The Company continues to develop formalized policies and procedures regarding internal controls over financial reporting. |
The material weaknesses will not be remediated until the Company’s remediation plan has been fully implemented, for which the Company would be able to conclude that its internal controls were operating effectively for a sufficient period of time.
We can offer no assurance that these initiatives will ultimately have the intended effects.
Changes in Internal Control over Financial Reporting
Except for the remediation actions described above, there were no changes in our internal control over financial reporting (as defined by Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the most recently completed quarter, that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. The following is a summary of material legal proceedings as of the date of this filing. See also Note 7 of the Notes to the Unaudited Condensed Consolidated Financial Statements for additional information regarding contingent liabilities.
On June 17, 2025, a former director filed a lawsuit against the Company alleging damages of approximately $748,000 for consulting fees, bonuses, and for unpaid promissory note principal and interest. On November 10, 2025, the Suffolk Superior Court issued a preliminary injunction prohibiting the Company from transferring its assets without court approval outside the ordinary course of business. On April 15, 2026, the Company settled this claim in full for the total amount of approximately $390,000.
In March 2017, we entered into an Exclusive License Agreement with Memorial Sloan Kettering Cancer Center (“MSK”), which was subsequently amended by Amendment No. 1 to Exclusive License Agreement dated March 31, 2017, Amendment No. 2 to Exclusive License Agreement dated March 31, 2018, and Amendment No. 3 to Exclusive License Agreement dated December 31, 2019 (collectively, the “Exclusive MSK License Agreement”). In June 2023, we received a notice of breach from MSK followed by a notice of termination in September 2023, pursuant to which MSK demanded payments totaling $1,060,405 in principal and $169,173 in interest. We do not dispute the payment obligations under the Exclusive MSK License Agreement and have not made the payment to preserve cash. We continue working on a settlement agreement for this obligation. As of June 30, 2026, the Company had accrued amounts associated with outstanding MSK obligations of approximately $1.2 million.
In January 2023, we entered into a settlement agreement with Parexel International (IRL) Limited relating to payment obligations arising out of a clinical trial performed by Parexel, which was co-financed by the Company and Mabwell (Shanghai) Bioscience Co., Ltd. (SHA: 688062), a biopharmaceutical company headquartered in Shanghai, China (“Mabwell”). The Company made some but not all installment payments due under the settlement agreement and Parexel filed a complaint in Superior Court in Middlesex County, Massachusetts in April 2023. Parexel subsequently amended the complaint twice and filed a motion for default judgment in September 2023 seeking contractual damages of approximately $640,000 plus additional damages under Massachusetts Chapter 93A for deceptive business practices. A hearing on the motion was held on January 9, 2024. The court asked for additional submissions by January 16, 2024 and indicated that a ruling would follow thereafter. On January 26, 2024, the court entered a judgment in the case awarding Parexel a total of approximately $700,000 and rejecting Parexel’s claim under Chapter 93A. As of June 30, 2026 and December 31, 2025, the Company recorded liability for the outstanding balance under this settlement agreement of approximately $911,000 and $869,000, including the accrued interest, respectively.
On August 5, 2026, the Company received a demand letter from counsel to a former officer, in connection with the termination of his employment in November 2025, claiming bonus, unpaid wages during the furlough period and contractual severance payments. The demand letter requested the total payment of $450,000 to resolve these claims. The Company had previously accrued amounts related to the 2023 discretionary bonus balance awarded but unpaid in the amount of $80,000 as of both June 30, 2026 and December 31, 2025. Currently, any additional accruals for this claim are not reasonably estimable. The Company, with the assistance of counsel, is assessing the validity of the claims, or lack thereof, and plans to address this matter and, if necessary, to vigorously defend against any such claims should the matter escalate to litigation.
We are unable to predict the ultimate outcome of these matters, the timing of any final decisions of various agencies or courts, or the impact on our results of operations, financial condition or cash flows. Adverse outcomes in any of these matters or in aggregate, if liability is ultimately found against us, could require significant cash payments and materially adversely affect our financial condition, and impede or hinder our operations.
Item 1A. Risk Factors
Factors that could cause our actual results to differ materially from those in this report include the risk factors described in our Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2025, as may be updated in subsequent periodic reports we file with the SEC. Other than as set forth below, there have been no material changes to the risk factors described in our most recent Form 10-K.
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Our failure to meet Nasdaq’s continued listing requirements could result in a further delisting of our shares.
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 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 (see Note 10 of the Notes to the Unaudited Condensed Consolidated Financial Statements) and on favorable terms, if at all, in the future.
Following the above-referenced suspension of trading on Nasdaq, the Company expects its common stock will continue to be eligible for quotation on the OTC Pink Limited Market under the ticker symbol “ABPO” 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.
We can provide no assurance that any action taken by us in the future 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 or prevent future non-compliance with Nasdaq’s listing requirements.
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Following the unsuccessful appeal to Nasdaq we expect to 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, ineligible and/or involve increased complexities, along with the costs associated with trading on the OTC 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 in the future. |
We will need substantial additional funds to advance development of our product candidates, and we cannot guarantee that we will have sufficient funds available in the future to develop and commercialize our current or future product candidates.
The development of biopharmaceutical product candidates is capital-intensive. If our product candidates enter and advance through pre-clinical studies and clinical trials, we will need substantial additional funds to expand our development, regulatory, manufacturing, marketing and sales capabilities. We have used substantial funds to develop our technology and product candidates and will require significant additional funds to conduct further research and development and pre-clinical testing and clinical trials of our product candidates, to seek regulatory approvals for our product candidates and to manufacture and market products, if any, that are approved for commercial sale. In addition, we expect to incur additional costs associated with operating as a public company, which will require additional funding to operate in parallel with and in addition to our clinical and development costs of our assets.
Because the length of time and activities associated with successful research and development of our product candidates is highly uncertain, we are unable to estimate the actual funds we will require for development and any approved marketing and commercialization activities. The timing and amount of our operating expenditures will depend largely on:
| ● | the timing and progress of pre-clinical and clinical development activities; |
| ● | the number and scope of pre-clinical and clinical programs we decide to pursue; |
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| ● | the progress of the development efforts of parties with whom we have entered into or may in the future enter into, collaboration and research and development agreements; |
| ● | the timing and amount of milestone or royalty payments we may receive under collaboration agreements; |
| ● | our ability to maintain our current licenses and research and development programs and to establish new collaborations; |
| ● | the costs involved in obtaining, maintaining, enforcing and defending patents and other intellectual property rights; |
| ● | the cost and timing of regulatory approvals; and |
| ● | our efforts to hire additional personnel, including personnel to support development, marketing and, if successful, commercialization of our product candidates. |
If we are unable to obtain funding on a timely basis or on acceptable terms, we may have to delay, reduce or terminate our research and development programs and pre-clinical studies or clinical trials, if any, limit strategic opportunities or other corporate restructuring activities. We also could be required to seek funds through arrangements with partners or others that may require us to relinquish rights to some of our technologies or product candidates that we would otherwise pursue on our own. We do not expect to realize revenue from sales of products or royalties from licensed products in the foreseeable future, if at all, and unless and until our product candidates are clinically tested, approved for commercialization and successfully marketed. To date, we have primarily financed our operations through equity and debt financings, payments received under collaboration agreements, and research grants We will be required to seek additional funding in the future and currently intend to do so through additional collaborations, public or private equity offerings or debt financings, credit or loan facilities or a combination of one or more of these funding sources. Our ability to raise additional funds will depend on financial, economic and other factors, many of which are beyond our control. Additional funds may not be available to us on acceptable terms or at all. If we raise additional funds by issuing equity securities, our stockholders will suffer dilution, and the terms of any financing may adversely affect the rights of our stockholders. In addition, as a condition to providing additional funds to us, future investors may demand, and may be granted, rights superior to those of existing stockholders. Debt financing, if available, is likely to involve restrictive covenants limiting our flexibility in conducting future business activities, and, in the event of insolvency, debt holders would be repaid before holders of our equity securities received any distribution of our corporate assets.
Should we pursue a deregistration or be involuntarily deregistered, resulting in “going dark”, this may limit our ability to raise capital on favorable terms as a private company.
If we are involuntarily deregistered by the SEC or if we complete a voluntary deregistration under the Exchange Act (referred to as “going dark”), we will cease filing public financial reports. Following any such transition to a private non-reporting company, our access to traditional capital markets may be constrained since any future debt or equity financings we pursue will likely rely entirely on private placement markets. Private investors and lenders often demand higher yields, stricter financial covenants, greater board representation, or significant liquidation preferences to compensate for the lack of liquidity and mandatory and more stringent public disclosure requirements. We cannot assure you that private financing will be available when needed, or that the commercial terms will be acceptable to us.
Additionally, any residual OTC trading will feature extremely limited liquidity, wider bid-ask spreads, and heightened price volatility. As a result of the lack of an active public trading market, private financing rounds often suffer from a steep “illiquidity discount.” While the Company believes that its stock price per share has been severely undervalued and, therefore, capital raising terms may ultimately prove more favorable on a private company financing basis, there remains the possibility that financing raised after going dark may result in greater equity dilution for existing stockholders than an equivalent public capital raise, especially if the Company’s common stock were still listed and traded on Nasdaq under ordinary and non-distressed circumstances. Further, such a structural shift may result in increased stockholder skepticism, damage to our reputation among alternative lenders, and potentially trigger costly stockholder litigation regarding the loss of liquidity and perceived reduction in fiduciary transparency. Any ongoing litigation or negative market perception will further depress our corporate valuation and complicate our efforts to finalize essential private financings.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
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Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| No. | Description of Exhibit | |
| 31.1* | Certification of Principal Executive Officer and Principal Financial and Accounting Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1* | Certification of Principal Executive Officer and Principal Financial and Accounting Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS* | Inline XBRL Instance Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Labels Linkbase Document | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | |
| * | Filed herewith. |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ABPRO HOLDINGS, INC. | ||
| Date: August 14, 2026 | By: | /s/ Miles Suk |
| Name: | Miles Suk | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer and Principal Financial and Accounting Officer) | ||
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