Financial Analysis

10 . 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 a 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 Companys failure to make certain installments pursuant to a settlement agreement entered into with this vendor on January 23, 2023. Under the settlement agreement, the Company agreed to pay a total of $1,644 to the vendor, with $600 due 5 business days after the settlement effective date and ten monthly installments, approximately $104 each, starting in February 2023. The Company made the upfront payment and the first four monthly installments for a total of $1,016 but failed to make the monthly installment payments due after May 2023. On January 24, 2024, the Company …

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16. Employee Benefit Plan The Company has a 401(k) retirement plan available to all eligible employees. During the years ended December 31, 2025 and 2024, the Company made $44 and $110 in matching contributions, respectively, to the plan.

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12. Notes Payable Note Payable In January 2025, the Company entered into an insurance premium financing agreement and borrowed a total principal amount of $553. The note bore an annual interest rate of 7.74% and matured in September 2025. The interest expense on the note amounted to $21 for the year ended December 31, 2025. The note was paid in full prior to September 30, 2025. Notes Payable Related Parties Promissory Note with ABI On October 18, 2023, the Company entered into a promissory note agreement with ABI, a significant investor in the Company, to receive up to $6,000. The promissory note accrues interest at a rate of 5% per annum on the principal amount of each installment from the installment funding date until the maturity date and at a rate of 7% per annum after the maturity date if any amounts then remain outstanding. The Maturity Date is defined in the agreement as the earlier of (i) eighteen months from the funding date and (ii) the successful closing of the Merger. On August 22, 2024, ACAB entered into the Abpro Bio Subscription Agreement (see Note 3) with ABI, pursuant to which ABI purchased 20,749 newly-issued shares of the Companys common stock, concurrently with the closing of the Merger at a price of $300.00 per share, for an aggregate purchase price of $6,225, of which $4,225 was paid through the conversion of the balance due by the Company to ABI under the promissory note agreement and the remainder of $2,000 in cash. In addition, ABI received an aggreg …

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15. Share-Based Compensation 2024 Equity Incentive Plan The Companys 2024 Equity Incentive Plan (the 2024 Plan) became effective at the Closing Date. As of December 31, 2025, 160,656 shares of common stock were available for issuance under the 2024 Plan. The 2024 Plan provides that on January 1 of each year commencing January 1, 2026 and ending on December 31, 2034, the 2024 Plan reserve will automatically increase in an amount equal to the lesser of (a) 5% of the number of shares of the Companys common stock outstanding on December 31 of the preceding year and (b) a number of shares of common stock determined by the Companys board of directors. 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, unrestricted stock, performance awards and other forms of awards to eligible employees and nonemployees. In July 2025, the Company granted 8,080 options with the weighted average fair value of the option of $6.90, to the Companys directors under the 2024 Plan which vested in full in November 2025. The fair value of the options was determined using the Black-Scholes option pricing model based on the following assumptions: (a) fair value of common stock of $9.45 per share, (b) expected volatility of 92.00%, (c) dividend yield of 0%, (d) risk-free interest rate of 3.95%, and (e) expected term of 5.2 years. During the year ended December 31, 2025, the Compan …

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6. Fair Value Measurements The following table presents information about the Companys assets and liabilities that are measured at fair value on a recurring basis at December 31, 2025 and 2024, and indicates the fair value hierarchy of the valuation inputs the Companys utilized to determine such fair value: December 31, December 31, Description Level 2025 2024 Assets: Forward purchase agreement asset (Note 11) 3 $ - $ 155 SEPA put rights asset (Note 13) 3 96 188 Liabilities: Embedded derivative liability (Note 13) 3 $ - $ 80 The Forward Purchase Agreement was fully settled on January 28, 2025 for $132 cash received by the Company. The fair value of the Companys position under the Forward Purchase Agreement was calculated as of December 31, 2024 by multiplying the number of shares under the Forward Purchase Agreement by the market price at the settlement date estimated using a Monte-Carlo simulation incorporating the following assumptions: December 31, 2024 Stock price $ 53.70 Risk-free interest rate 4.4 % Expected term (in years) 0.1 Expected volatility 98 % Expected dividend yield 0 % The fair value of the SEPA Put Rights 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 under each advance notice was based on the historical trading volumes of the Companys common stock taking into account various beneficial ownership and daily volume limitations. The fair value of the put rights unde …

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18. Income Taxes For the years ended December 31, 2025 and 2024, the Company did not record a current income tax provision as no foreign withholding taxes were incurred in the period. A reconciliation of the Companys effective income tax rate to the U.S. statutory federal income tax rate of 21% for the years ended December 31, 2025 and 2024 is as follows: Years ended December 31, 2025 2024 U.S. federal statutory income tax rate $ (598 ) 21.0 % $ (1,519 ) 21.0 % Domestic Federal Tax Credits Research credits (73 ) 2.6 % (290 ) 4.0 % Nontaxable and nondeductible items Reversal of Excise tax and penalties (924 ) 32.5 % - 0.0 % Loss on conversion of note 237 -8.3 % - 0.0 % Stock Issuance Costs 251 -8.8 % - 0.0 % Success Based Fees - 0.0 % (127 ) 1.8 % Other permanent differences 8 -0.3 % 29 -0.4 % Change in valuation allowance 1,099 -38.6 % 1,906 -26.4 % Income tax expense $ - 0.0 % $ - 0.0 % During the years ended December 31, 2025 and 2024, the Company paid $366 and $0 in US federal income taxes, respectively. The Company made no income tax payments in other jurisdictions. Significant components of the Companys net deferred tax assets and liabilities as of December 31, 2025 and 2024 are as follows: Years ended December 31, 2025 2024 Deferred tax assets: Operating loss carryforwards $ 25,089 $ 23,229 Tax credits 2,579 2,478 Stock-based compensation 2,080 2,691 Capitalized research expenses 1,902 2,547 Depreciation and amortization 1,636 1,823 Lease liability - 124 Accrued expense …

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9. Leases The Companys leases are for office and laboratory spaces, classified as operating leases. On November 19, 2021, in connection with its laboratory and office space in Woburn, MA (Woburn lease), the Company provided to the landlord a standby letter of credit in the amount of $131 (the LOC), which served as security for the Companys performance of its obligations under the lease and bears interest at a per annum rate of the U.S. prime rate plus 1%, with the minimum interest rate no less than 4.25%. The Woburn lease and related LOC were terminated in July 2025. The Companys operating lease costs related to the long-term leases were $427 and $594 for the years ended December 31, 2025 and 2024. The operating cash flows related to the long-term leases were $456 and $566 for the years ended December 31, 2025 and 2024. In August 2025, the Company entered into the lease for the office space in Burlington, MA (Burlington lease). The Burlington lease has a term of less than 12 months and does not include renewal options that are reasonably certain to be exercised. Accordingly, the lease qualifies as a short-term lease under ASC 842 and no operating right-of-use asset or operating lease liability was recognized on the consolidated balance sheet as of December 31, 2025. The lease expense related to the Burlington lease was $13 for the year ended December 31, 2025. As the lease is cancellable on a month-to-month basis, the Company had no fixed future minimum payment obligations as …

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Recently Issued Accounting Pronouncements On November 4, 2024, the FASB issued ASU 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 Companys financial statements. …

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17. Related Parties The Company has certain promissory notes outstanding with executives and directors as of December 31, 2025. See Note 12. On January 15, 2020, the Company entered into an agreement for various consulting services, as defined in the agreement, with a former director of the Company. 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. During the years ended December 31, 2025 and 2024, the Company incurred $0 and $250 under this agreement, respectively. In the fourth quarter of 2025, the Company made a $140 payment to the director. As of December 31, 2025 and 2024, the unpaid amounts were $47 and $189, respectively. See Note 10 for the details of the complaint from the former director. On December 1, 2021, the Company entered into a consulting agreement with a member of the Companys Board of Directors. Under the agreement, the Company 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 both December 31, 2025 and 2024, the unpaid balance was $8. On March 13, 2023, the Companys Former CEO, upon the approval of the Companys Board of Directors, transferred $5,000 from the Companys bank account at First Republ …

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2. Summary of Significant Accounting Policies Basis of Presentation The 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 consolidated financial statements include all of the accounts of the Company and its subsidiaries, Abpro Corporation and AbMed Corporation (AbMed). Certain prior period amounts have been reclassified to conform to the current year presentation with no material impact on the consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. Emerging Growth Company The Company is an emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the JOBS Act), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stock …

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14. Stockholders Equity Convertible Preferred Stock As of December 31, 2023, and immediately prior to the Closing Date, Legacy Abpros amended and restated articles of incorporation authorized the issuance of up to 40,000,000 shares of common stock and up to 11,620,248 shares of preferred stock. Legacy Abpro s Certificate of Incorporation, as amended, authorizes the issuance of Series A Redeemable Convertible Preferred Stock (Series A), Series B Convertible Preferred Stock (Series B), Series C Convertible Preferred Stock (Series C), Series D Convertible Preferred Stock (Series D), Series E Convertible Preferred Stock (Series E) and Series F Convertible Preferred Stock (Series F), collectively referred to as Convertible Preferred Stock . In connection with the Merger, all previously issued and outstanding Convertible Preferred Stock was converted into the aggregate number of shares of New Abpros common stock that would be issued upon conversion of the shares of Legacy Abpro preferred stock based on the applicable conversion ratio immediately prior to the effective time, multiplied by approximately 0.068, and the remaining amount was reclassified to additional paid-in capital. Common and Preferred Stock In connection with the Closing, the Companys articles of incorporation were amended to designate two classes of stock; preferred and common stock. The articles of incorporation of New Abpro authorize 1,000,000 shares of preferred stock and 110,000,000 shares of common stock. The …

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20. Subsequent Events In January and February 2026, the Company issued 3,162,785 shares of common stock with the aggregate gross purchase price of $7,264 under Advance Notices to YA in accordance with the terms of the SEPA. In January 2026, the Company entered into a loan agreement with its Chief Executive Officer and Chairman for an unsecured loan in the principal amount of $147 to fund the premium for the Companys directors and officers liability insurance. The loan had a nine-month term from the date of advance and may be prepaid at any time without penalty. No interest accrued during the first three months following funding; thereafter, the outstanding principal bore interest at a variable rate equal to three-month Term SOFR plus 2.0% per annum, with any accrued interest payable at maturity or upon earlier repayment. The loan was not secured by any collateral and is not guaranteed by any third party. On February 18, 2026, the Company received written notification from the Panel of the Nasdaq Stock Market stating that, due to the Company not having met the terms of the Panels 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 Companys securities would be delisted from Nasdaq, and trading was suspended at the open of trading on February 23, 2026. The Company was provided fifteen (15) days from receipt of the aforementioned notice of the Panels decision …

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