AquaBounty Technologies, Inc. (NASDAQ: AQB) (“AquaBounty” or the “Company”), a land-based aquaculture company utilizing technology to enhance productivity and sustainability, today announced the Company’s financial results for the third quarter and nine-months ended September 30, 2022
MAYNARD, Mass., Nov. 08, 2022 (GLOBE NEWSWIRE) -- AquaBounty Technologies, Inc. (NASDAQ: AQB) (“AquaBounty” or the “Company”), a land-based aquaculture company utilizing technology to enhance productivity and sustainability, today announced the Company’s financial results for the third quarter and nine-months ended September 30, 2022.
Third Quarter and Year-to-Date 2022 Highlights and Recent Developments
“Throughout the third quarter, AquaBounty continued to see strong demand for our salmon from seafood distributor customers,” said Sylvia Wulf, Chief Executive Officer of AquaBounty. “We once again sold everything we could produce, which combined with improvements in our yields, drove a 44% year-over-year increase in third quarter revenues to $653 thousand. Additionally, our production operations are seeing the benefit of the salmon biology expertise that comes from the scientists and technicians throughout our organization. Their understanding of the interaction between salmon biology and the RAS environment in which our fish grow has enabled us to begin to increase our production efficiency and reduce mortality risk at our Indiana farm, which is realized through increased harvest yields. These learnings are reflected in our harvest success to-date and have been critical to identifying process and design improvements for our future farm in Pioneer, Ohio.
“Turning to our property in Pioneer, Ohio – we are pleased with construction progress to-date and we achieved another critical milestone during the quarter with the receipt of a new Withdrawal and Consumptive Use Permit from the Ohio Department of Natural Resources. This key water permit authorizes water withdrawal of up to 5.25 million gallons per day, providing the expanded water access needed to fully support the farm’s future operations. We mentioned previously that our cost estimates for the farm’s construction were increasing above our target, due to the historic inflation that is gripping the economy. We therefore set about to conduct a thorough and detailed evaluation of the project scope, relevant economic trends and market costs. Through this process, we have determined that the current design of the farm will require more than $320 million to construct. However, we have also determined that the current design of the farm can support a production level above 10,000 metric tons.
“With the progress made on the farm design and updated cost estimates, we are again moving forward with the planned bond financing, and we have resumed our efforts with Wells Fargo Corporate and Investment Banking. In order to mitigate the increase in the construction cost estimate and the impact of rising interest rates, we have received approval from the Board of the Toledo-Lucas County Port Authority to increase the amount of the bond offering up to $425 million. We are now moving forward with an updated timeline reflecting the larger bond offering, with the expectation of closing the bond financing in the first quarter of 2023.
“Looking ahead into 2023, we believe the need for land-based salmon that is farmed efficiently, sustainably and profitably will continue to rise as consumers opt for cleaner proteins that take the pressure off fully fished or overfished fisheries. With ongoing market validation, the scale-up of harvests and sales at our Indiana farm, and construction at the Ohio farm all well underway, we are very optimistic for our shared future and progress in the months ahead,” concluded Wulf.
At AquaBounty Technologies, Inc. (NASDAQ: AQB), we believe we are a leader in land-based aquaculture leveraging decades of technology expertise to deliver disruptive solutions that address food insecurity and climate change issues. We are committed to feeding the world efficiently, sustainably and profitably. AquaBounty provides fresh Atlantic salmon to nearby markets by raising its fish in carefully monitored land-based fish farms through a safe, secure and sustainable process. The Company’s land-based Recirculating Aquaculture System (“RAS”) farms, located in Indiana, United States and Prince Edward Island, Canada, are close to key consumption markets and are designed to prevent disease and to include multiple levels of fish containment to protect wild fish populations. AquaBounty is raising nutritious salmon that is free of antibiotics and contaminants and provides a solution resulting in a reduced carbon footprint and no risk of pollution to marine ecosystems as compared to traditional sea-cage farming. For more information on AquaBounty, please visit www.aquabounty.com or follow us on Facebook, Twitter, LinkedIn and Instagram.
Forward-Looking Statements
This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995, as amended, including regarding the anticipated size of AquaBounty’s proposed facility in Ohio; the timing and size of the contemplated bond financing; production capacity; timing of construction, permits, regulatory approvals; anticipated water withdrawal and consumption; sustainability claims; technological capabilities; cost of construction; amount to be invested in the project; future revenue streams; pricing and profitability. The forward-looking statements in this press release are neither promises nor guarantees, and you should not place undue reliance on these statements because they involve significant risks and uncertainties about AquaBounty. AquaBounty may use words such as “expect,” “anticipate,” “project,” “intend,” “slated to,” “plan,” “aim,” “believe,” “seek,” “estimate,” “can,” “focus,” “will,” “may,” the negative forms of these words 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 AquaBounty and its partners will consummate the proposed bond financing; the final terms of the financing, market and other conditions; the satisfaction of closing conditions; the impact of the bond offering on AquaBounty’s financial condition, credit rating and stock price; whether AquaBounty will need to and be able to raise additional equity capital; whether AquaBounty will be able to service the bond commitments, be able to secure required regulatory approvals and permits, be able to profitably construct and operate the Pioneer, Ohio farm; AquaBounty’s business and financial condition, and the impact of general economic, public health, industry or political conditions in the United States and internationally. Forward-looking statements speak only as of the date hereof, and, except as required by law, AquaBounty undertakes 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.
This press release does not constitute an offer to sell or a solicitation of an offer to buy the bonds described herein, nor shall there be any sale of these bonds in any state or jurisdiction in which such offer, solicitation or sale would be unlawful.
Company Contact:
AquaBounty Technologies
Dave Conley
Corporate Communications
(613) 294-3078
Investor Relations:
Lucas A. Zimmerman
MZ Group - MZ North America
(949) 259-4987
AQB@mzgroup.us
AquaBounty Technologies, Inc.
Condensed Consolidated Balance Sheets
(Unaudited) September 30, December 31, 2022
2021
Assets Current assets: Cash and cash equivalents$127,008,620 $88,454,988 Marketable securities — 101,773,781 Inventory 2,104,251 1,259,910 Prepaid expenses and other current assets 4,041,029 1,536,484 Total current assets 133,153,900 193,025,163 Property, plant and equipment, net 88,002,701 33,815,119 Right of use assets, net 238,699 284,320 Intangible assets, net 221,565 231,842 Restricted cash 1,000,000 1,000,000 Other assets 68,343 79,548 Total assets$222,685,208 $228,435,992 Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued liabilities$15,544,254 $4,317,615 Accrued employee compensation 764,748 874,589 Current debt 709,597 627,365 Other current liabilities 36,706 66,269 Total current liabilities 17,055,305 5,885,838 Long-term lease obligations 204,396 224,058 Long-term debt, net 7,617,173 8,523,333 Total liabilities 24,876,874 14,633,229 Commitments and contingencies Stockholders' equity: Common stock, $0.001 par value, 150,000,000 and 80,000,000 shares authorized at September 30, 2022 and December 31, 2021, respectively; 71,110,713 and 71,025,738 shares outstanding at September 30, 2022 and December 31, 2021, respectively 71,111 71,026 Additional paid-in capital 385,279,809 384,852,107 Accumulated other comprehensive loss (589,909) (255,588)Accumulated deficit (186,952,677) (170,864,782)Total stockholders' equity 197,808,334 213,802,763 Total liabilities and stockholders' equity$222,685,208 $228,435,992
AquaBounty Technologies, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited) Three Months Ended
September 30, Nine Months Ended
September 30, 2022 2021 2022 2021 Revenues Product revenues$653,432 $455,397 $2,686,019 $757,162 Costs and expenses Product costs 3,518,296 4,311,003 10,044,092 7,713,254 Sales and marketing 186,393 201,838 783,882 1,069,354 Research and development 220,598 580,346 596,079 1,512,339 General and administrative 2,264,755 2,177,153 7,472,921 6,541,621 Total costs and expenses 6,190,042 7,270,340 18,896,974 16,836,568 Operating loss (5,536,610) (6,814,943) (16,210,955) (16,079,406) Other income (expense) Interest expense (72,313) (79,489) (222,295) (238,503)Other income, net 168,796 29,593 345,355 63,442 Total other income (expense) 96,483 (49,896) 123,060 (175,061) Net loss$(5,440,127) $(6,864,839) $(16,087,895) $(16,254,467) Other comprehensive (loss) income: Foreign currency translation (loss) gain (303,725) (136,670) (374,422) 9,293 Unrealized gain on marketable securities 32,370 6,132 40,101 15,102 Total other comprehensive (loss) income (271,355) (130,538) (334,321) 24,395 Comprehensive loss$(5,711,482) $(6,995,377) $(16,422,216) $(16,230,072) Basic and diluted net loss per share$(0.08) $(0.10) $(0.23) $(0.24)Weighted average number of Common Shares - basic and diluted 71,070,196 71,025,738 71,047,999 68,889,650
AquaBounty Technologies, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited) Nine Months Ended September 30, 2022 2021 Operating activities Net loss$(16,087,895) $(16,254,467)Adjustment to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,501,381 1,308,062 Share-based compensation 426,249 305,653 Other non-cash charge 18,997 12,993 Changes in operating assets and liabilities: Inventory (857,331) 303,767 Prepaid expenses and other assets (2,475,197) (794,573)Accounts payable and accrued liabilities (369,254) 13,040 Accrued employee compensation (109,841) (5,767)Net cash used in operating activities (17,952,891) (15,111,292) Investing activities Purchases of and deposits on property, plant and equipment (44,882,996) (4,160,370)Maturities of marketable securities 149,435,173 23,810,038 Purchases of marketable securities (47,621,291) (103,457,168)Other investing activities 12,500 (11,010)Net cash provided by (used in) investing activities 56,943,386 (83,818,510) Financing activities Proceeds from issuance of debt 42,338 606,453 Repayment of term debt (478,870) (119,527)Proceeds from the issuance of common stock, net — 119,120,437 Proceeds from the exercise of stock options and warrants 1,538 1,723,846 Net cash (used in) provided by financing activities (434,994) 121,331,209 Effect of exchange rate changes on cash, cash equivalents and restricted cash (1,869) 27,086 Net change in cash, cash equivalents and restricted cash 38,553,632 22,428,493 Cash, cash equivalents and restricted cash at beginning of period 89,454,988 96,251,160 Cash, cash equivalents and restricted cash at end of period$128,008,620 $118,679,653 Reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheet: Cash and cash equivalents$127,008,620 $118,179,653 Restricted cash 1,000,000 500,000 Total cash, cash equivalents and restricted cash$128,008,620 $118,679,653 Supplemental disclosure of cash flow information and non-cash transactions: Interest paid in cash$209,666 $224,595 Property and equipment included in accounts payable and accrued liabilities$14,496,747 $206,423
