UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number: 001-41224

Abpro Holdings, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

85-1013956

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

68 Cummings Park Drive

Woburn, MA 01801

(Address of principal executive offices)

1-800-396-5890

(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

Common Stock, par value $0.0001 per share

ABP

The Nasdaq Stock Market LLC

Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $3.83

ABPWW

The Nasdaq Stock Market LLC

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. Yes ☒ No ☐

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). Yes ☒ No ☐

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	☐
Non-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 May 15, 2025, there were 60,787,272 shares of common stock, par value $0.0001 per share, issued and outstanding.

ABPRO HOLDINGS, INC.

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2025

TABLE OF CONTENTS

		Page
Part I. Financial Information
Item 1. Financial Statements		1
Condensed Consolidated Balance Sheets as of March 31, 2025 (Unaudited) and December 31, 2024		1
Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2025 and 2024		2
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the Three Months Ended March 31, 2025 and 2024		3
Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024		4
Notes to Unaudited Condensed Consolidated Financial Statements		5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		29
Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk		34
Item 4. Controls and Procedures		35
Part II. Other Information
Item 1. Legal Proceedings		36
Item 1A. Risk Factors		36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		37
Item 3. Defaults Upon Senior Securities		37
Item 4. Mine Safety Disclosures		37
Item 5. Other Information		37
Item 6. Exhibits		38
Part III. Signatures		39

PART I - FINANCIAL INFORMATION

Item 1. Interim Financial Statements.

ABPRO HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands except for share and per share data)

(unaudited)

	March 31,			December 31,
	2025			2024
Assets
Current assets:
Cash	$	1,261		$	2,850
Accounts receivable		331			323
Prepaid expenses and other current assets		483			306
Forward purchase agreement asset		-			155
Restricted cash		144			142
Total current assets		2,219			3,776

Property and equipment, net		31			37
Right-of-use asset - operating lease		275			418
Security deposits		66			66
Patents, net		174			176
SEPA put rights asset		32			188
Total assets	$	2,797		$	4,661
Liabilities, convertible preferred stock and stockholders’ deficit
Current liabilities:
Accounts payable	$	4,704		$	3,936
Accrued expenses		7,778			7,496
Excise taxes payable		4,401			4,401
Operating lease liability, current		300			456
Income taxes payable		366			366
Notes payable, current – related parties		147			147
Convertible notes		2,801			2,725
Embedded derivative liability		111			80
Total current liabilities		20,608			19,607

Commitments and Contingencies (Note 9)

Stockholders’ deficit:
Preferred stock, $0.0001 par value, 1,000,000 shares authorized; zero shares issued and outstanding		-			-
Common stock, $0.0001 par value; 110,000,000 shares authorized; 51,965,765 and 51,815,765 shares issued, 50,982,432 and 50,832,432 shares outstanding at March 31, 2025 and December 31, 2024, respectively		5			5
Treasury stock, 983,333 shares at cost		-			-
Additional paid-in capital		101,625			100,603
Accumulated deficit		(119,990	)		(116,103	)
Total Abpro Holdings, Inc.’s stockholders’ deficit		(18,360	)		(15,495	)
Non-controlling interest		549			549
Total stockholders’ deficit		(17,811	)		(14,946	)
Total liabilities and stockholders’ deficit	$	2,797		$	4,661

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ABPRO HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except for share and per share data)

(unaudited)

	For the Three Months Ended March 31,
	2025			2024
Operating expenses:
Research and development		325			1,000
General and administrative		2,633			1,879
Total operating expenses		2,958			2,879

Loss from operations		(2,958	)		(2,879	)

Other (expense) income:
Other income		-			3,556
Change in fair value of forward purchase agreement asset		(23	)		-
Change in fair value of SEPA put rights asset		(156	)		-
Change in fair value of embedded derivative liability		(31	)		-
Interest income		18			1
Interest expense		(737	)		(42	)
Total other (expense) income, net		(929	)		3,515

Net (loss) income	$	(3,887	)	$	636
Less net income allocated to participating securities		-			324
Net (loss) income allocated to common stock	$	(3,887	)	$	312

Net (loss) income per share, basic	$	(0.08	)	$	0.02
Net (loss) income per share, diluted	$	(0.08	)	$	0.01

Weighted averages shares outstanding
Weighted average shares outstanding - basic		50,922,432			19,181,066
Weighted average shares outstanding - diluted		50,922,432			44,549,733

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ABPRO HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

(in thousands except share and per share data)

(unaudited)

	Series A Redeemable,				Series B				Series C				Series D				Series E				Series F				Total Convertible																	Total
	Convertible Preferred Stock				Convertible Preferred Stock				Convertible Preferred Stock				Convertible Preferred Stock				Convertible Preferred Stock				Convertible Preferred Stock				Preferred Stock		Common Stock				Treasury Stock						Additional Paid-In		Accumulated			Abpro’s Stockholders’			Non- controlling		Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Amount		Shares		Amount		Shares			Amount			Capital		Deficit			Deficit			Interest		Deficit
Balances, as of December 31, 2024		-	$	-		-	$	-		-	$	-		-	$	-		-	$	-		-	$	-	$	-		51,815,765	$	5		(983,333	)	$	-		$	100,603	$	(116,103	)	$	(15,495	)	$	549	$	(14,946	)

Common stock issued for services		-		-		-		-		-		-		-		-		-		-		-		-		-		150,000		-		-			-			-		-			-			-		-

Warrants issued to related party		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-			-			714		-			714			-		714

Share-based compensation		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-			-			308		-			308			-		308

Net loss		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-			-			-		(3,887	)		(3,887	)		-		(3,887	)

Balances, as of March 31, 2025		-	$	-		-	$	-		-	$	-		-	$	-		-	$	-		-	$	-	$	-		51,965,765	$	5		(983,333	)	$	-		$	101,625	$	(119,990	)	$	(18,360	)	$	549	$	(17,811	)

	Series A Redeemable,				Series B				Series C				Series D				Series E				Series F				Total Convertible																	Total
	Convertible Preferred Stock				Convertible Preferred Stock				Convertible Preferred Stock				Convertible Preferred Stock				Convertible Preferred Stock				Convertible Preferred Stock				Preferred Stock		Common Stock				Treasury Stock						Additional Paid-In		Accumulated			Abpro’s Stockholders’			Non- controlling		Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Amount		Shares		Amount		Shares			Amount			Capital		Deficit			Deficit			Interest		Deficit
Balances, as of December 31, 2023		3,938,098	$	1,795		1,281,402	$	1,401		4,101,409	$	14,949		2,679,397	$	17,622		6,756,246	$	29,841		1,136,049	$	9,991	$	75,599		19,381,330	$	2		(210,166	)	$	(33	)	$	19,918	$	(108,871	)	$	(88,984	)	$	549	$	(88,435	)

Vesting of restricted stock units		-		-		-		-		-		-		-		-		-		-		-		-		-		19,173		-		-			-			-		-			-			-		-

Share-based compensation		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-			-			563		-			563			-		563

Net income		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-			-			-		636			636			-		636

Balances, as of March 31, 2024		3,938,098	$	1,795		1,281,402	$	1,401		4,101,409	$	14,949		2,679,397	$	17,622		6,756,246	$	29,841		1,136,049	$	9,991	$	75,599		19,400,503	$	2		(210,166	)	$	(33	)	$	20,481	$	(108,235	)	$	(87,785	)	$	549	$	(87,236	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ABPRO HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands except share and per share data)

(unaudited)

	For the Three Months Ended March 31,
	2025			2024
Cash Flows from Operating Activities:
Net income (loss)	$	(3,887	)	$	636
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization expense		8			50
Share-based compensation		512			563
Amortization of operating lease right-of-use assets		144			134
Noncash interest expense		714			-
Other income (see Note 2)		-			(3,556	)
Amortization of debt discount		76			-
Change in fair value of forward purchase agreement asset		23			-
Change in fair value of SEPA put rights asset		156			-
Change in fair value of embedded derivative liability		31			-
Changes in operating assets and liabilities:
Accounts receivable		(8	)		1
Prepaid expenses and other current assets		(177	)		(130	)
Accounts payable		768			(418	)
Accrued expenses		77			10
Operating lease liability		(156	)		(138	)
Net cash used in operating activities		(1,719	)		(2,848	)
Cash Flows from Financing Activities:
Proceeds from settlement of forward purchase agreement		132			-
Proceeds from promissory notes		-			2,583
Payment of offering costs		-			(220	)
Repayment of finance lease liabilities		-			(18	)
Net cash provided by financing activities		132			2,345
Net change in cash and restricted cash		(1,587	)		(503	)
Cash and restricted cash - beginning of period		2,992			861
Cash and restricted cash - end of period	$	1,405		$	358
Supplemental disclosure of cash flow information and non-cash transactions:
Interest paid	$	-		$	1
Fair value of common stock issued for services	$	161		$	-
As reported within the unaudited condensed consolidated balance sheets:
Cash	$	1,261		$	220
Restricted cash		144			138
Total cash and restricted cash as presented in the balance sheet	$	1,405		$	358

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ABPRO HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

(unaudited)

1.	Organization and Description of the Business

Organization

Abpro Holdings, Inc. and its subsidiaries, (the “Company”) is a biotechnology company headquartered in Woburn, 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”), Atlantic Costal Acquisition Corp. II (“ACAB”) consummated a merger (the “Merger”) pursuant to the terms of the Merger Agreement, dated as of December 11, 2023 (the “Merger Agreement”) by and among Abpro Corporation (“Legacy Abpro”), ACAB, and Abpro Merger Sub Corp., a Delaware corporation (“Merger Sub”) and wholly owned subsidiary of ACAB prior to the Closing Date. Pursuant to the Merger Agreement, on the Closing Date, (i) ACAB changed its name to “Abpro Holdings, Inc.” (“New Abpro”), and (ii) Merger Sub merged with and into Legacy Abpro, with Legacy Abpro as the surviving company in the Merger (such transactions, the “Merger,” and, collectively with the other transactions described in the Merger Agreement, the “Reverse Recapitalization”). Shares of the New Abpro common stock commenced trading on the Nasdaq Capital Market on November 14, 2024.

After giving effect to the Merger, Legacy Abpro became a wholly owned subsidiary of the Company. The Merger was accounted for as a reverse recapitalization in accordance with U.S. GAAP, and under this method of accounting, ACAB was treated as the acquired company for financial reporting purposes and Legacy Abpro was treated as the acquirer. Operations prior to the Merger are those of Legacy Abpro. Unless otherwise noted, the Company has retroactively adjusted all common and preferred share and related price information to give effect to the Exchange Ratio as set forth in the Merger Agreement. The “Company” refers to Abpro Holdings, Inc. and its subsidiaries, including Abpro Corporation, prior to and subsequent to the Merger. Legacy Abpro is the accounting acquirer in the Merger and, as such, the condensed consolidated financial statements for the three months ended March 31, 2024 present operations of Legacy Abpro prior to the Merger Date.

Refer to Note 3 — Merger for further details of the Merger.

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 the condensed consolidated financial statements are issued. Through March 31, 2025, the Company has funded its operations mainly through equity and debt financings, including the proceeds from the Merger and the PIPE Financing (as further described in Note 3), and to a lesser extent, payments received in connection with collaboration and license agreements.

As of March 31, 2025 and December 31, 2024, the Company had an accumulated deficit of $119,990 and $116,103, respectively. The Company’s net (loss) income was $(3,887) and $636 for the three months ended March 31, 2025 and 2024, respectively. Substantially all of the Company’s net losses resulted from costs incurred in connection with the Company’s research and development programs and from general and administrative costs associated with the Company’s operations. The Company expects to incur substantial operating losses and negative cash flows from operations for the foreseeable future as the Company advances its product candidates.

On April 2, 2025, the Company received written notice (the “Notice”) from the Listing Qualifications Department staff (the “Staff”) of the Nasdaq Stock Market (“Nasdaq”) notifying the Company that, based on the closing bid price of the Company’s common stock for the last 30 consecutive business days, the Company no longer complies with the minimum bid price requirement for continued listing on The Nasdaq Stock Market LLC. Nasdaq Listing Rule 5450(a)(1) requires listed securities to maintain a minimum bid price of $1.00 per share (the “Minimum Bid Price Requirement”), and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the Minimum Bid Price Requirement exists if the deficiency continues for a period of 30 consecutive business days. Pursuant to the Nasdaq Listing Rules, the Company has been provided an initial compliance period of 180 calendar days to regain compliance with the Minimum Bid Price Requirement. To regain compliance, the closing bid price of the Company’s common stock must be at least $1.00 per share for a minimum of 10 consecutive business days prior to September 29, 2025.

Further, on April 10, 2025, the Company received two letters from the Staff of Nasdaq. One letter (the “MVPHS Notice”) indicated that based upon Nasdaq’s review of the Company’s Market Value of Publicly Held Shares (“MVPHS”) for the last 30 consecutive business days prior to the date of the MVPHS Notice, the Company no longer meets the requirements of Nasdaq Listing Rule 5450(b)(2)(C), which requires listed securities to maintain a minimum MVPHS of $15 million (the “MVPHS Requirement”). The Company intends to monitor the market value of the Company’s listed securities and may, if appropriate, consider available options to regain compliance with the MVPHS Requirement.

Under Nasdaq Listing Rule 5810(c)(3)(D), the Company has a period of 180 calendar days (or until October 7, 2025) to regain compliance with the MVPHS Requirement. If at any time during this compliance period the Company’s MVPHS closes at $15 million or more for a minimum of 10 consecutive business days, Nasdaq will provide the Company with written confirmation of compliance and this matter will be closed. In the event the Company does not regain compliance with the rule prior to the expiration of the compliance period, it will receive written notification that its securities are subject to delisting. At that time, the Company may appeal the delisting determination to a Nasdaq hearing’s panel.

The Company also received a letter from the Staff of Nasdaq (the “MVLS Deficiency Notice”) notifying the Company that from February 20, 2025, to April 9, 2025, the Company’s Market Value of Listed Securities (“MVLS”) was below the minimum of $50 million required for continued listing on The Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(b)(2)(A) (the “MVLS Requirement”). An indicator will be displayed with quotation information related to the Company’s securities on NASDAQ.com and NASDAQTrader.com and may be displayed by other third-party providers of market data information, however, the MVLS Deficiency Notice does not impact the listing of the Company’s securities on The Nasdaq Global Market at this time.

As of March 31, 2025, the Company had cash of $1,261. Due to its current liabilities, the cash available to the Company will not be sufficient to allow the Company to operate for at least 12 months from the date these financial statements are available for issuance. The future viability of the Company is largely dependent on its ability to raise additional capital to finance its operations. The Company expects to seek additional funding through equity and debt financings, collaboration agreements and research grants. Although the Company has been successful in raising capital in the past, there is no assurance that it will be successful in obtaining such additional financing on terms acceptable to the Company, if at all. If the Company is unable to obtain funding, the Company could be forced to delay, reduce or eliminate its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects.

Accordingly, based on the considerations discussed above, management has concluded there is substantial doubt as to the Company’s ability to continue as a going concern within one year after the date the condensed consolidated financial statements are issued. The Company plans to continue to fundraise, as well as seek alternate revenues from collaboration and license agreements. If adequate funds are not available, the Company may be required to initiate steps to slow cash burn, extending the cash runway until financing can be secured. The 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 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 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.

Use of Estimates

The preparation of 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 consolidated financial statements include stock-based compensation expense, fair value of derivative instruments, fair value of warrants, pre-clinical and clinical accrued expenses, 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.

In March 2022, the Company received an invoice from Mabwell (Shanghai) Bioscience Co., Ltd. (“Mabwell”) for approximately $3,500 in connection with the manufacturing of certain clinical material for the Company. The Company recorded the estimated amount in accounts payable based on the information available at the time, and subsequently engaged in discussion with Mabwell about the invoiced amount and its validity. The Company continued to dispute the amount and its contractual basis because the parties had neither finalized nor executed a clinical trial manufacturing agreement. In July 2024, the Company received communication from Mabwell that they will not be pursuing the collection of the originally invoiced amount. Accordingly, during the three months ended March 31, 2024, the Company reversed the liability and recognized $3,500 of other income.

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 March 31, 2025 and its results of operations for the three months ended March 31, 2025 and 2024, and cash flows for the three months ended March 31, 2025 and 2024. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the year ended December 31, 2025 or any other period. The December 31, 2024 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, 2024 and the related notes included in the Company’s Annual Report on Form 10-K, filed with the SEC on April 15, 2025 (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, 2024 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 enterprises report information about operating segments in their annual consolidated financial statements and requires that those enterprises 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. The CODM assesses performance and allocates resources based on the Company’s consolidated statements of operations, and key components and processes of the Company’s operations are managed centrally. Segment asset information is not used by the CODM to allocate resources. The Chief Executive Officer uses operating losses and cash flows from operating activities to evaluate performance of the operating segment assets in deciding how to allocate the cash resources. Significant expenses presented to the CODM include research and development expenses, general and administrative expenses, and interest expenses, which are each separately presented on the Company’s condensed consolidated statements of operations.

Non-controlling Interest

The Company holds an 82% ownership interest in its consolidated subsidiary, AbMed. Non-controlling interest represents the portion of net book value in AbMed that is not owned by the Company and is reported as a component in stockholders’ equity on the condensed consolidated balance sheets. The Company bears all the operating costs of AbMed. Upon an event of default by the Company or upon a liquidation of AbMed, the non-controlling interest holder has the right to put its interest in AbMed to the Company. The amount to be paid under the redemption option is equal to $2.00 per share for each preferred share of AbMed stock held by the non-controlling interest holder plus all accrued and unpaid dividends thereon. The Company has not allocated any losses to the noncontrolling interests given that the preferred shares held by the non-controlling interest holder have no contractual obligations to share in the losses of AbMed. There were no operating activities in AbMed through March 31, 2025.

Net Income (Loss) Per Share

The Company follows the two-class method to compute basic and diluted net loss per share attributable to common stockholders when shares meet the definition of participating securities. Series A, Series B, Series C, Series D, Series E and Series F preferred stock (see Note 13), which were outstanding prior to the Closing Date, met the definition of participating securities. The two-class method determines net income (loss) per common share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to share in the earnings as if all income for the period had been distributed. During periods of loss, there is no allocation required under the two-class method due to there being no distributed earnings for the period coupled with the fact that the Company’s Series A, Series B, Series C, Series D, Series E and Series F preferred stock do not contain a contractual right to absorb losses. Thus, all undistributed losses were allocated entirely to the Company’s outstanding common stock for the three months ended March 31, 2025.

Basic net income (loss) per share attributable to common stockholders is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration of potentially dilutive common stock. Diluted net income (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 inclusion of such shares would be anti-dilutive. As it relates to the participating securities, diluted earnings per share are calculated under both the treasury stock and two-class method, and the calculation that results in the most dilutive earnings per share amount for the common stock is reported.

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share and share data) for the three months ended March 31, 2025 and 2024:

	Three Months Ended March 31,
Numerator:	2025			2024
Income (Loss) allocated to common shares - Basic	$	(3,887	)	$	312
Effect of dilutive securities:
Income allocated to preferred stock		-			324	⁽¹⁾
Income (Loss) allocated to common shares - Diluted	$	(3,887	)	$	636

Denominator:
Weighted average common shares outstanding - Basic		50,922,432			19,181,066
Effect of dilutive securities:
Options and RSUs		-			5,481,051
Convertible preferred stock		-			19,887,616
Dilutive potential common shares		-			25,368,667
Weighted average common shares outstanding - Diluted		50,922,432			44,549,733

Net income (loss) per share:
Basic	$	(0.08	)	$	0.02
Diluted	$	(0.08	)	$	0.01

⁽¹⁾	Allocated based on the common stock issuable upon conversion of the outstanding preferred stock of 19,887,616 as compared to the sum of common stock outstanding of 19,181,066 and the common stock issuable upon conversion of 19,887,616.

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:

	March 31,
	2025		2024
Warrants		29,700,000		124,763
Stock options		6,952,734		-
Convertible Notes		15,789,474		-
Unvested restricted stock units		5,539		-
Total		52,447,747		124,763

Recently Adopted Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” that addresses requests for improved income tax disclosures from investors that use the financial statements to make capital allocation decisions. Public entities must adopt the new guidance for fiscal years beginning after December 15, 2024. The amendments in this ASU must be applied on a retrospective basis to all prior periods presented in the financial statements and early adoption is permitted. The Company adopted this standard on January 1, 2025 and determined that the adoption does not have a material impact on these unaudited condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

On November 4, 2024, the FASB issued A