AquaBounty Technologies Inc logo

AQB - AquaBounty Technologies Inc News Story

$5.32 0.1  2.7%

Last Trade - 07/05/21

Sector
Healthcare
Size
Small Cap
Market Cap £270.4m
Enterprise Value £125.9m
Revenue £140k
Position in Universe 3870th / 6858

AquaBounty Technologies Announces Results for the Quarter and Year Ended December 31, 2020

Tue 9th March, 2021 9:05pm
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MAYNARD, Mass., March 09, 2021 (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
fourth quarter and full year ended December 31, 2020.

Fourth Quarter 2020 and Subsequent Key Highlights
* Selected Innovasea, a global leader in advanced aquatic solutions for
aquaculture, as the Recirculating Aquaculture Systems (“RAS”) technology
solutions provider for its planned 10,000 metric ton farm (“Farm 3”).
* Fortified balance sheet with $192.3 million in gross proceeds from the
closing of underwritten public offerings of common stock in December 2020 and
February 2021, providing the financing to fund the expected cost of Farm 3.
* Appointed packaged food industry veteran Dr. Ricardo Alvarez to the
Company’s Board of Directors, bringing with him 25 years of operational and
board experience to advise on AquaBounty’s commercialization initiatives.
Management Commentary

“The fourth quarter of 2020 was focused on operational execution, as we
prepare for the harvest of our AquAdvantage salmon as market conditions
permit. We also took steps to strengthen our balance sheet ahead of the
construction of our planned 10,000 metric ton farm,” said Sylvia Wulf, Chief
Executive Officer of AquaBounty. “Our recent public offerings provide the
financing to fund the expected cost of Farm 3, which is critical to secure in
advance of breaking ground on construction. We are continuing to evaluate debt
financing options in support for Farm 3 as well, which could further extend
our operational runway as we move forward with construction and
commercialization.

“The impact of the COVID-19 pandemic on market demand required the Company
to address the inventory levels of the conventional salmon at our Indiana
farm, which began to exceed capacity in December. We needed to make room at
the farm for our growing biomass of AquAdvantage salmon. As a result, we
decided to harvest and begin donating our conventional salmon to local food
charities. This provides us with both the chance to give back to our local
community and the opportunity to refine our harvesting, processing and
transportation processes on a continuous weekly cycle in preparation for the
first commercial harvests of AquAdvantage salmon.

“Our 2021 outlook on the industry remains optimistic, as we expect to see
increasing overall demand among consumers, and a resurgent food service
industry as restaurants begin to reopen this year. We expect our 2021 sales of
AquAdvantage salmon to begin modestly and grow stronger as we enter the second
half of the year. In anticipation, we have already begun to send out initial
AquAdvantage product samples for customer feedback. We will closely monitor
the results of our survey on pricing, freshness, quality and sustainable,
antibiotic-free domestic production as we ramp our short-term sales
initiatives.

“During the fourth quarter, we were delighted to partner with Innovasea as
our RAS technology provider for Farm 3. Innovasea is a U.S.-based company
familiar with U.S. markets and regulations and they have been designing and
building energy efficient, sustainable recirculating aquaculture systems for
more than 25 years. We are rapidly moving forward with them on the
development, design and engineering for our first 10,000 metric ton farm.

“We have also continued our rigorous site selection process for Farm 3 and
expect to make a final decision in the coming weeks once we have concluded our
due diligence. We then expect to move forward with the purchase of the
property and the commencement of the permitting process.

“2020 was a decisive year for AquaBounty, and we believe we have positioned
the Company for an even more pivotal 2021. With our fortified balance sheet,
the impending first-ever commercial harvest of AquAdvantage salmon and the
planned construction of our next farm, we look forward to sharing our upcoming
milestone achievements with our valued shareholders,” concluded Wulf.

Fourth Quarter 2020 Financial Summary
* Revenue in the fourth quarter of 2020 was $50,197, as compared to $46,367 in
revenue in the same year-ago quarter. Revenue was impacted by the continued
effects of the COVID-19 pandemic on demand in the food service industry, which
has prompted AquaBounty to temporarily place a hold on commercial harvests of
AquAdvantage salmon until the expected conclusion of the conventional salmon
donation program in April.
* Operating expenses in the fourth quarter of 2020 were $6.1 million, as
compared to $3.5 million in the same year-ago quarter. The increase in
operating expenses was primarily due to an increase in production costs as the
biomass of fish in our farms grew from 161 metric tons to over 603 metric
tons. In addition, the Company recorded an inventory reserve of $1.5 million
related to the donation program for the conventional salmon.
* Net loss in the fourth quarter of 2020 was $6.1 million, as compared to $3.4
million in the same year-ago quarter.
* Cash, cash equivalents and restricted cash totaled $96.2 million as of
December 31, 2020, compared with $2.8 million at December 31, 2019. In
December, the Company fortified its balance sheet with $65.2 million in gross
proceeds from a public offering of common stock.
About AquaBounty

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 Statements

This 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, including but not
limited to statements with respect to the completion, timing, size, and use of
proceeds of the underwritten offering of common stock. 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 additional 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, Quarterly Reports on Form 10-Q,
and prospectus supplement for this offering. 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 Technologies
Dave Conley
Corporate Communications
(613) 294-3078

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

AquaBounty Technologies, Inc.

Consolidated Balance Sheets

                                                                                                                  
                                                                                                                  
                                                                As of                                             
                                                                December 31,                                      
                                                                2020                       2019                   
 Assets                                                                                                           
 Current assets:                                                                                                  
 Cash and cash equivalents                                      $    95,751,160            $    2,798,744         
 Other receivables                                                   46,678                     55,198            
 Inventory                                                           1,525,377                  1,232,049         
 Prepaid expenses and other current assets                           358,692                    391,162           
 Total current assets                                                97,681,907                 4,477,153         
                                                                                                                  
 Property, plant and equipment, net                                  26,930,338                 25,065,836        
 Right of use assets, net                                            341,997                    399,477           
 Definite lived intangible assets, net                               143,885                    157,588           
 Indefinite lived intangible assets                                  101,661                    101,661           
 Restricted cash                                                     500,000                    —                 
 Other assets                                                        76,715                     32,024            
 Total assets                                                   $    125,776,503           $    30,233,739        
                                                                                                                  
 Liabilities and stockholders' equity                                                                             
 Current liabilities:                                                                                             
 Accounts payable and accrued liabilities                       $    1,760,103             $    1,462,809         
 Other current liabilities                                           62,483                     62,286            
 Current debt                                                        259,939                    163,155           
 Total current liabilities                                           2,082,525                  1,688,250         
                                                                                                                  
 Long-term lease obligations                                         290,327                    352,808           
 Long-term debt                                                      8,528,490                  4,432,052         
 Total liabilities                                                   10,901,342                 6,473,110         
                                                                                                                  
                                                                                                                  
                                                                                                                  
 Stockholders' equity:                                                                                            
 Common stock, $0.001 par value, 80,000,000 shares authorized;                                                    
 55,497,133 (2019: 21,635,365) shares outstanding                    55,497                     21,635            
 Additional paid-in capital                                          263,629,116                156,241,363       
 Accumulated other comprehensive loss                                (267,258      )            (360,160      )   
 Accumulated deficit                                                 (148,542,194  )            (132,142,209  )   
 Total stockholders' equity                                          114,875,161                23,760,629        
                                                                                                                  
 Total liabilities and stockholders' equity                     $    125,776,503           $    30,233,739        



AquaBounty Technologies, Inc.

Consolidated Statements of Operations and Comprehensive Loss

                                                                                                                                                          
                                                                                                                                                          
                                                                           Years ended December 31,                                                       
                                                                           2020                        2019                        2018                   
 Revenues                                                                                                                                                 
 Product revenues                                                          $    127,663                $    186,738                $    84,518            
                                                                                                                                                          
 Costs and expenses                                                                                                                                       
 Production costs                                                               6,680,012                   3,573,858                   2,626,353         
 Sales and marketing                                                            533,428                     709,023                     297,687           
 Research and development                                                       2,364,610                   2,359,441                   3,458,564         
 General and administrative                                                     6,797,443                   6,723,060                   4,067,710         
 Total costs and expenses                                                       16,375,493                  13,365,382                  10,450,314        
                                                                                                                                                          
 Operating loss                                                                 (16,247,830  )              (13,178,644  )              (10,365,796  )    
                                                                                                                                                          
 Other income (expense)                                                                                                                                   
 Interest expense                                                               (152,367     )              (62,988      )              (22,257      )    
 Other income (expense), net                                                    212                         13,990                      5,994             
 Total other income (expense)                                                   (152,155     )              (48,998      )              (16,263      )    
                                                                                                                                                          
 Net loss                                                                  $    (16,399,985  )         $    (13,227,642  )         $    (10,382,059  )    
                                                                                                                                                          
 Other comprehensive income (loss):                                                                                                                       
 Foreign currency translation gain (loss)                                       92,902                      214,026                     (360,302     )    
 Total other comprehensive income (loss)                                        92,902                      214,026                     (360,302     )    
                                                                                                                                                          
 Comprehensive loss                                                        $    (16,307,083  )         $    (13,013,616  )         $    (10,742,361  )    
                                                                                                                                                          
 Earnings per share                                                                                                                                       
 Net loss                                                                  $    (16,399,985  )         $    (13,227,642  )         $    (10,382,059  )    
 Deemed dividend                                                           $    —                      $    —                      $    (1,822,873   )    
 Net loss attributable to common shareholders                              $    (16,399,985  )         $    (13,227,642  )         $    (12,204,932  )    
                                                                                                                                                          
                                                                                                                                                          
 Basic and diluted net loss per share attributable to common shareholders  $    (0.45        )         $    (0.66        )         $    (0.94        )    
 Weighted average number of common shares - basic and diluted                   36,347,398                  20,078,017                  13,028,760        
                                                                                                                                                          



AquaBounty Technologies, Inc.

Consolidated Statements of Cash Flows

                                                                                                                                                               
                                                                                                                                                               
                                                                                Years ended December 31,                                                       
                                                                                2020                        2019                        2018                   
 Operating activities                                                                                                                                          
 Net loss                                                                       $    (16,399,985  )         $    (13,227,642  )         $    (10,382,059  )    
 Adjustment to reconcile net loss to net cash used in                                                                                                          
 operating activities:                                                                                                                                         
 Depreciation and amortization                                                       1,494,596                   1,285,902                   843,387           
 Share-based compensation                                                            436,691                     872,177                     263,396           
 Gain on sale of equipment                                                           (1,816       )              (12,133      )              (13,233      )    
 Loss on asset held for sale                                                         —                           149,800                     —                 
 Impairment loss                                                                     —                           103,116                     —                 
 Other non-cash charges                                                              46,155                      —                           (1,364       )    
 Changes in operating assets and liabilities:                                        —                                                                         
 Other receivables                                                                   9,229                       65,002                      56,212            
 Inventory                                                                           (282,260     )              (1,154,222   )              93,956            
 Prepaid expenses and other assets                                                   (83,850      )              59,942                      289,868           
 Accounts payable and accrued liabilities                                            492,419                     609,311                     (966,928     )    
 Net cash used in operating activities                                               (14,288,821  )              (11,248,747  )              (9,816,765   )    
                                                                                                                                                               
 Investing activities                                                                                                                                          
 Purchase of property, plant and equipment                                           (3,975,135   )              (2,316,809   )              (4,009,736   )    
 Deposits on equipment purchases                                                     (349,847     )              (160,675     )              (95,001      )    
 Proceeds from sale of equipment                                                     99,816                      15,848                      23,233            
 Proceeds from legal settlement, net                                                 1,014,008                   —                           —                 
 Other investing activities                                                          (27,253      )              —                           —                 
 Net cash used in investing activities                                               (3,238,411   )              (2,461,636   )              (4,081,504   )    
                                                                                                                                                               
 Financing activities                                                                                                                                          
 Proceeds from issuance of debt                                                      4,221,130                   900,767                     771,858           
 Payment of debt issuance costs                                                      (91,620      )              —                           —                 
 Repayment of term debt                                                              (70,826      )              (85,802      )              (55,615      )    
 Proceeds from the issuance of common stock, net                                     104,625,615                 12,395,348                  10,616,046        
 Proceeds from exercise of stock options and warrants, net                           2,318,709                   272,417                     5,116,533         
 Net cash provided by financing activities                                           111,003,008                 13,482,730                  16,448,822        
                                                                                                                                                               
 Effect of exchange rate changes on cash, cash equivalents and restricted cash       (23,360      )              23,840                      (54,279      )    
 Net change in cash, cash equivalents and restricted cash                            93,452,416                  (203,813     )              2,496,274         
 Cash, cash equivalents and restricted cash at beginning of period                   2,798,744                   3,002,557                   506,283           
 Cash, cash equivalents and restricted cash at end of period                    $    96,251,160             $    2,798,744              $    3,002,557         
                                                                                                                                                               
 Supplemental disclosure of cash flow information and                                                                                                          
 non-cash transactions:                                                                                                                                        
 Interest paid in cash                                                          $    114,893                $    62,988                 $    22,257            
 Property and equipment included in accounts payable and accrued liabilities    $    23,600                 $    210,270                $    193,378           
 Acquisition of equipment under debt arrangement                                $    —                      $    —                      $    74,068            



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GlobeNewswire, Inc. 2021
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