Abpro Holdings restates prior statements over understated license liabilities

The restatement

Abpro Holdings, Inc., which trades on Nasdaq under the symbol ABP, said in its annual report for the fiscal year ended December 31, 2024, filed April 15, 2025, that it has restated earlier financial statements. While preparing its 2024 statements the company identified prior period accounting errors from the understatement of liabilities under one of its license agreements. It concluded that its previously issued statements for the periods ended September 30, 2024, December 31, 2023 and December 31, 2022 were materially misstated and "should no longer be relied upon." The company first described the issue in a Current Report on Form 8-K filed on April 15, 2025.

For each of those periods, the estimated impact is an increase in accrued expenses, total liabilities and accumulated deficit of $3.3 million. Abpro has not amended, and does not plan to amend, its earlier filed reports. It restates the figures for 2022 and 2023, and for the nine months ended September 30, 2024, inside the new annual report.

Controls

The company attributes the problem to an inadequate control: the accounting team was not aware that the company was subject to liabilities under one of its license agreements. As a result it determined that its disclosure controls and procedures were not effective as of December 31, 2024 and December 31, 2023 and that it had identified material weaknesses in internal control over financial reporting.

Going concern

The same report says management has concluded that uncertainties around its ability to raise additional capital raise substantial doubt about its ability to continue as a going concern. It says the company does not have sufficient cash to fund operations and drug development and to meet its obligations within one year of the date the financial statements were issued, and that it has no financing commitments to meet its cash requirements. It warns that stockholders may lose some or all of their investment if it cannot continue. At December 31, 2024 the accumulated deficit was $116.1 million. The net loss was $7.2 million for 2024 and $11.7 million for 2023. The aggregate market value of stock held by non-affiliates was approximately $8.2 million as of June 28, 2024, and the risk factors list a failure to meet Nasdaq's continued listing requirements as a risk.

How it got here

Abpro became public on November 13, 2024, when Atlantic Coastal Acquisition Corp. II completed its merger with Abpro Corporation and changed its name to Abpro Holdings, Inc. On October 30, 2024 it signed a Standby Equity Purchase Agreement with YA II PN, Ltd., under which YA agreed to advance up to $5 million against promissory notes. On November 14, 2024 it issued YA a $3,000,000 convertible note with an 8% original issue discount, for net proceeds of $2,755,000. The note matures on November 13, 2025 and carries no interest unless there is an uncured event of default, when the rate is 18%. YA may convert at the lower of $11.50 and 94% of the lowest daily volume weighted average price in the previous five trading days, so a falling share price means more shares.

The science

Abpro describes itself as a company developing antibody therapeutics for cancer and eye disease. Its filing says its product candidates are in early stages of development and have never been tested in a human subject. ABP-102 is designed to engage T cells by targeting HER2 and CD3 and is partnered with Celltrion Inc. The company received an initial milestone payment of $2.0 million, and is eligible for net sales milestones of up to $1.75 billion and development milestones of up to $4.0 million. ABP-201 targets VEGF and ANG-2 for wet age-related macular degeneration. The company expects to start clinical trials of ABP-102 in the first half of 2026 and of ABP-201 in the second half of 2026.

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