AquaBounty Technologies, Inc. (NASDAQ: AQB) (“AquaBounty” or the “Company”), a land-based aquaculture company utilizing technology to enhance productivity and sustainability, has provided a corporate update and financial results for the first quarter ended March 31, 2020.

Recent Company Highlights:

  • Harvest schedules remain on-track, with first harvest of conventional Atlantic salmon scheduled to begin in June 2020, and the first harvest of the Company’s proprietary AquAdvantage salmon (AAS) scheduled to begin in the fourth quarter of 2020.  Currently, AquaBounty has over 300 metric tons of fish in the water between its two farms located in Indiana and Rollo Bay.
  • Implemented increased biosecurity and employee safety measures in response to the COVID-19 pandemic.
  • Appointed Theodore Fisher and Alana Czypinski to the board of directors.
  • Fortified balance sheet from an over-subscribed February 2020 public offering, securing $15.5 million in gross proceeds.
  • Planning for the next large-scale farm is in full development pending the final selection of the engineering and Recirculating Aquaculture System (RAS) technology firms.
  • Retained MZ Group to lead strategic investor relations and shareholder communication program across all key markets.
  • Discussions with potential customers and distributors remain on track with timing of harvests.

Management Commentary

Sylvia Wulf, Chief Executive Officer of AquaBounty, stated: “The COVID-19 pandemic is a significant challenge for the global economy, and I am immensely proud of our employees for their outstanding performance and unwavering care for our fish.  A challenge like this pandemic highlights the need for technology and supply chain alternatives like ours, which address a safe, sustainable, and secure food supply.  Our operational experience and expertise have helped us navigate through this unique environment and effectively execute against our strategy.”

“AquaBounty is rapidly approaching its commercialization phase, and we are pleased to announce that our first harvest of conventional Atlantic salmon remains on track to begin in June 2020, which will provide our first revenues on a commercial scale.  This also allows us to continue demonstrating our expertise in aquaculture and ensure our supply chain is in place prior to our first harvest of AquAdvantage salmon, beginning in the fourth quarter of 2020.  Looking forward, we plan to increase production volumes in subsequent months.  With a world-class team in place and a fortified balance sheet from our over-subscribed $15.5 million public offering, we are better positioned than ever to execute our strategic plan,” continued Wulf.

Wulf added: “As we prepare for the future, we continue to work through the process of formalizing offtake agreements with processors and customers.  We’re also taking steps to plan the next large-scale production farm, including identifying an ideal site location to maximize logistics and best serve our customers, selecting a design and construction firm, and choosing a RAS-technology provider.”

“We are confident in our ability to execute upon the biggest milestones in the Company’s history, while concurrently moving forward with our longer-term operating plans to increase scale, drive technology enhancements, and expand geographically—all while driving meaningful shareholder value and providing solutions to feed the world’s growing population,” concluded Wulf.

First Quarter 2020 Financial Summary

  • Cash and cash equivalents were $14.7 million as of March 31, 2020, compared with $2.8 million as of December 31, 2019.  The increase in cash and cash equivalents was primarily due to the completion of a public offering in February 2020, whereby the Company raised gross proceeds of $15.5 million.
  • Cash used in operations in the first quarter of 2020 was $2.9 million, compared with cash used in operations of $2.1 million in the same period of the prior year.
  • Net loss in the first quarter of 2020 was to $3.1 million, or $0.11 per share, compared to a net loss of $2.8 million, or $0.18 per share, in the same period of the prior year.
  • General and administrative expenses in the first quarter of 2020 were $1.6 million, compared to $1.3 million in the same period of the prior year.  This increase is primarily due to strengthening the management team.
  • Research and development expenses in the first quarter of 2020 were $569 thousand, compared to $663 thousand in the same period of the prior year.  The decrease was primarily due to lower field trial costs.

About AquaBounty Technologies, Inc.

AquaBounty Technologies, Inc. (NASDAQ: AQB) is a commercial aquaculture company focused on improving efficiency, sustainability, and profitability, leveraging decades of biotechnology expertise to ensure the availability of high-quality seafood to meet global consumer demand.  By 2016, both the U.S. Food and Drug Administration and Health Canada approved the Company’s AquAdvantage salmon as the first and only bioengineered animal protein for human consumption.

The Company’s AquAdvantage fish program is based upon a single, specific molecular modification that results in more rapid growth in early development, resulting in a 70 percent increase in annual production output for AquAdvantage versus conventional Atlantic salmon.  With aquaculture facilities located in Indiana and on Prince Edward Island, AquaBounty is raising its disease-free, antibiotic-free salmon in land-based Recirculating Aquaculture Systems, resulting in a reduced carbon footprint and no risk of pollution to marine ecosystems as compared to traditional sea-cage farming.  For more information, please visit www.aquabounty.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. All statements other than statements of historical fact contained in this press release are forward-looking statements, including statements regarding the potential for and timing of the harvesting and sale of our fish from our production farms, future revenues, the development of new farms and the selection of related service providers, the development of a shareholder communication program, and arrangements with potential customers, distributors, and processors; the effectiveness of our COVID-19 response and the potential impact of the pandemic; the sufficiency of prior capital raises; our scale and volume of production; and the potential for fish diseases, use of antibiotics, pollution of the marine environment, annual production increases, demonstration of aquaculture expertise, reduction in carbon footprint, development of new technologies, and our geographic expansion. Forward-looking statements may be identified with words such as “will,” “may,” “expect,” “plan,” “anticipate,” “upcoming,” “believe,” “estimate,” or similar terminology, and the negative of these terms. Forward-looking statements are not promises or guarantees of future performance and are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. Forward-looking statements speak only as of the date hereof, and, except as required by law, we undertake no obligation to update or revise these forward-looking statements. For additional information regarding these and other risks faced by us, please refer to our public filings with the Securities and Exchange Commission (“SEC”), available on the Investors section of our website at www.aquabounty.com and on the SEC’s website at www.sec.gov.

Company Contact:

AquaBounty TechnologiesDave ConleyCorporate Communications(613) 294-3078

Investor Relations:

Greg FalesnikManaging DirectorMZ Group - MZ North America(949) 385-6449AQB@mzgroup.us

AquaBounty Technologies, Inc.Consolidated Balance Sheets(Unaudited)

  As of
  March 31,   December 31,
  2020   2019
Assets          
Current assets:          
Cash and cash equivalents $ 14,749,746     $  2,798,744  
Other receivables 82,873     55,198  
Inventory 1,833,957     1,232,049  
Prepaid expenses and other current assets 364,700     391,162  
Total current assets 17,031,276     4,477,153  
           
Property, plant and equipment, net 23,708,229     25,065,836  
Right of use assets, net 385,519     399,477  
Definite-lived intangible assets, net 154,162     157,588  
Indefinite-lived intangible assets 101,661     101,661  
Other assets 33,331     32,024  
Total assets $  41,414,178     $  30,233,739  
           
Liabilities and stockholders’ equity          
Current liabilities:          
Accounts payable and accrued liabilities $  1,834,685     $  1,462,809  
Other current liabilities 62,939     62,286  
Current debt 150,730     163,155  
Total current liabilities 2,048,354     1,688,250  
           
Long-term lease obligations 336,997     352,808  
Long-term debt 4,032,744     4,432,052  
Total liabilities 6,418,095     6,473,110  
           
Commitments and contingencies          
           
Stockholders’ equity:          
Common stock, $0.001 par value, 50,000,000 shares authorized; 32,085,684 (2019: 21,635,365) shares outstanding 32,086     21,635  
Additional paid-in capital 170,957,969     156,241,363  
Accumulated other comprehensive loss (742,145 )   (360,160 )
Accumulated deficit (135,251,827 )   (132,142,209 )
Total stockholders’ equity 34,996,083     23,760,629  
           
Total liabilities and stockholders’ equity $  41,414,178     $  30,233,739  
               

AquaBounty Technologies, Inc.Consolidated Statements of Operations and Comprehensive Loss(Unaudited)

  Three Months Ended March 31,
  2020     2019
           
Revenues          
Product revenues $ 6,753     $ 97,885  
           
Costs and expenses          
Production costs 841,434     862,255  
Sales and marketing 50,788     71,991  
Research and development 568,762     663,481  
General and administrative 1,637,190     1,255,851  
Total costs and expenses 3,098,174     2,853,578  
           
Operating loss (3,091,421 )   (2,755,693 )
           
Other income (expense)          
Interest expense (17,045 )   (13,338 )
Other income (expense), net (1,152 )   5,100  
Total other income (expense) (18,197 )   (8,238 )
           
Net loss $ (3,109,618 )   $ (2,763,931 )
           
Other comprehensive income (loss):          
Foreign currency translation gain (loss) (381,985 )   87,551  
Total other comprehensive income (loss) (381,985 )   87,551  
           
Comprehensive loss $ (3,491,603 )   $ (2,676,380 )
           
           
Basic and diluted net loss per share $ (0.11 )   $ (0.18 )
Weighted average number of common shares -          
basic and diluted 27,116,754     15,687,681  
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