AquaBounty Technologies, Inc. (NASDAQ: AQB) (“AquaBounty” or the “Company”), a land-based aquaculture company utilizing technology to enhance productivity and sustainability, announces the Company’s financial results for the third quarter and nine months ended September 30, 2020 along with a corporate update.

Key Highlights

  • Commenced harvesting of conventional Atlantic salmon in June at the Company’s Indiana farm, validating its land-based Recirculating Aquaculture System as an efficient and sustainable way to raise Atlantic salmon. 
  • Growth and feed conversion ratio targets for the Company’s AquAdvantage salmon (AAS) are tracking as expected, validating the economics and preparing the company for the imminent first-ever harvest of AAS.
  • Identified Mayfield in Graves County, Kentucky as the leading site location for its planned large-scale farm designed for the Company’s proprietary AquAdvantage salmon after an exhaustive nationwide search spanning approximately 230 sites. 
  • Raised gross proceeds of $31.6 million through an underwritten public offering of 12.65 million shares of common stock at a price of $2.50 per share.

Management Commentary“The third quarter of 2020 was marked by our continued progress towards the first-ever commercial scale harvest of AquAdvantage salmon,” said Sylvia Wulf, Chief Executive Officer of AquaBounty. “In the second quarter, we successfully started harvesting conventional salmon with the intention of refining the processes, operating procedures and partner relationships required for the first harvest of AAS. The foundational work with these first conventional harvests was crucial as it has allowed us to implement the necessary logistical and operational processes for a successful and de-risked first harvest of AAS, including refinements of quality and productivity operational parameters. Today, I am pleased to announce that AquAdvantage salmon are meeting our growth and feed conversion ratio expectations—a key component of their economic profile—and we have made tremendous strides towards building out an enhanced logistics network to expand our distribution capabilities nationwide.

“While we prepare for the first harvest of AAS and scale our conventional salmon harvesting efforts, we continue to closely monitor overall market demand for salmon given COVID-19’s impact on the food service industry. That said, we will remain flexible in efforts to maximize revenue and capitalize on the recovery of food service end-markets and in the meantime, continue to form relationships with additional customers who continue to be receptive to our sustainably grown salmon. To that end, we are now preparing to send out the initial AAS product samples for customer feedback which we expect to be positive given its benefits of competitive pricing, freshness, quality and domestic sourcing in America’s heartland.

“Given this positive momentum in our business, we are also aggressively moving forward with the planning for our first large-scale farm, which is anticipated to have the capacity to produce 10,000 metric tons of AquAdvantage salmon annually. We’ve selected Mayfield in Graves County, Kentucky as the leading location as it met all of the previously determined technical, environmental and economic requirements and we are now completing due diligence and beginning purchase negotiations.”

“Given our strong balance sheet, the impending first-ever commercial harvest of AAS and the planned construction of our next farm, AquaBounty is in a better position than ever to drive long-term value for our shareholders and become a major domestic supplier of fresh, sustainable salmon,” concluded Wulf.

Third Quarter Financial Summary

  • Revenue in the third quarter of 2020 was $68,000, as compared to no revenue in the same period of the prior year.
  • Operating expenses in the third quarter of 2020 were $3.7 million, as compared to $3.0 million in the same period of the prior year. The increase in operating expenses was due to increased production operations and legal fees.
  • Cash used for capital projects for the three months ended September 30, 2020 was $1.1 million compared with $0.9 million in the same period of the prior year. The increase was a result of on-going improvements to the Indiana farm.
  • Cash, cash equivalents and restricted cash were $39.5 million as of September 30, 2020, compared with $2.8 million at December 31, 2019. In August 2020, the Company fortified its balance sheet with gross proceeds of $31.6 million from a public offering of common stock.
  • Net loss in the third quarter of 2020 was $3.6 million, as compared to $3.0 million in the same period of the prior year.

About AquaBounty Technologies, Inc.AquaBounty Technologies, Inc. (Nasdaq: AQB) is a leader in the field of land-based aquaculture and the use of technology for improving its productivity and sustainability. The Company’s objective is to ensure the availability of high-quality seafood to meet global consumer demand, while addressing critical production constraints in the most popular farmed species.

The Company’s AquAdvantage fish program is based upon a single, specific molecular modification in fish that results in more rapid growth in early development. With aquaculture facilities located in Prince Edward Island, Canada, and Indiana, USA, AquaBounty is raising its disease-free, antibiotic-free salmon in land-based recirculating aquaculture systems, offering a reduced carbon footprint and no risk of pollution of marine ecosystems as compared to traditional sea-cage farming. For more information, please visit www.aquabounty.com.

Forward-Looking StatementsThis press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995, as amended, that involve significant risks and uncertainties about AquaBounty. AquaBounty may use words such as “expect,” “anticipate,” “project,” “intend,” “plan,” “aim,” “believe,” “seek,” “estimate,” “can,” “focus,” “will,” and “may” and similar expressions to identify such forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are risks relating to, among other things, whether or not AquaBounty will be able to raise capital, market and other conditions, AquaBounty’s business and financial condition, and the impact of general economic, public health, industry or political conditions in the United States or internationally. For additional disclosure regarding these and other risks faced by AquaBounty, see disclosures contained in AquaBounty’s public filings with the SEC, including the “Risk Factors” in the company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. You should consider these factors in evaluating the forward-looking statements included in this press release and not place undue reliance on such statements. The forward-looking statements are made as of the date hereof, and AquaBounty undertakes no obligation to update such statements as a result of new information, except as required by law.

Company Contact:AquaBounty TechnologiesDave ConleyCorporate Communications(613) 294-3078

Investor Relations:Greg Falesnik or Luke ZimmermanMZ Group - MZ North America(949) 259-4987AQB@mzgroup.us

AquaBounty Technologies, Inc.Consolidated Balance Sheets(Unaudited)

  As of
  September 30,   December 31,
  2020   2019
Assets      
Current assets:      
Cash and cash equivalents $ 38,989,366     $ 2,798,744  
Other receivables 62,034     55,198  
Inventory 2,869,470     1,232,049  
Prepaid expenses and other current assets 820,193     391,162  
Total current assets 42,741,063     4,477,153  
       
Property, plant and equipment, net 25,699,143     25,065,836  
Right of use assets, net 356,788     399,477  
Definite-lived intangible assets, net 147,311     157,588  
Indefinite-lived intangible assets 101,661     101,661  
Restricted cash 500,000      
Other assets 50,213     32,024  
Total assets $ 69,596,179     $ 30,233,739  
       
Liabilities and stockholders’ equity      
Current liabilities:      
Accounts payable and accrued liabilities $ 2,116,877     $ 1,462,809  
Current lease liabilities and other 62,627     62,286  
Current debt 152,501     163,155  
Total current liabilities 2,332,005     1,688,250  
       
Long-term lease obligations 306,174     352,808  
Long-term debt, net 8,425,552     4,432,052  
Total liabilities 11,063,731     6,473,110  
       
Commitments and contingencies      
       
Stockholders’ equity:      
Common stock, $0.001 par value, 50,000,000 shares authorized; 44,916,926 (2019: 21,635,365) shares outstanding 44,917     21,635  
Additional paid-in capital 201,402,983     156,241,363  
Accumulated other comprehensive loss (490,153 )   (360,160 )
Accumulated deficit (142,425,299 )   (132,142,209 )
Total stockholders’ equity 58,532,448     23,760,629  
       
Total liabilities and stockholders’ equity $ 69,596,179     $ 30,233,739  
               

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

  Three Months Ended September 30,   Nine Months Ended September 30,
  2020   2019   2020   2019
               
Revenues              
Product revenues $ 67,763     $     $ 77,466     $ 140,371  
               
Costs and expenses              
Production costs 1,355,939     846,306     3,238,689     2,649,674  
Sales and marketing 143,646     206,256     331,868     381,637  
Research and development 458,462     446,582     1,662,879     1,923,512  
General and administrative 1,722,874     1,500,448     5,053,608     4,960,553  
Total costs and expenses 3,680,921     2,999,592     10,287,044     9,915,376  
               
Operating loss (3,613,158 )   (2,999,592 )   (10,209,578 )   (9,775,005 )
               
Other income (expense)              
Interest expense (38,335 )   (17,933 )   (73,527 )   (45,483 )
Other income (expense), net 1,705     (697 )   15     11,603  
Total other income (expense) (36,630 )   (18,630 )   (73,512 )   (33,880 )
               
Net loss $ (3,649,788 )   $ (3,018,222 )   $ (10,283,090 )   $ (9,808,885 )
               
Other comprehensive income (loss):              
Foreign currency translation gain (loss) 86,491     (38,892 )   (129,993 )   133,448  
Total other comprehensive income (loss) 86,491     (38,892 )   (129,993 )   133,448  
               
Comprehensive loss $ (3,563,297 )   $ (3,057,114 )   $ (10,413,083 )   $ (9,675,437 )
               
               
Basic and diluted net loss per share $ (0.09 )   $ (0.14 )   $ (0.31 )   $ (0.50 )
Weighted average number of Common Shares -              
basic and diluted 38,911,054     21,604,072     32,756,074     19,556,607