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AquaBounty Technologies, Inc. Announces Results for the Year Ended December 31, 2019

MAYNARD, Mass., March 10, 2020 (GLOBE NEWSWIRE) -- AquaBounty Technologies, Inc. (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 year ended December 31, 2019.

Results Highlights:

Operational

  • Sylvia Wulf assumed the position of Chief Executive Officer, President, and Director;
  • The U.S. Food and Drug Administration (“FDA”) lifted its Import Alert, allowing the Company to import its AquAdvantage eggs from its hatchery in Canada to its farm in Indiana;
  • The Company’s Rollo Bay farm site received two regulatory approvals: FDA approved the farm’s hatchery building, and Environment and Climate Change Canada approved the farm’s production facility for the commercial grow-out of AquAdvantage Salmon;
  • The Company’s Indiana farm received two batches of AquAdvantage eggs and is now producing both conventional and AquAdvantage Salmon, bringing total biomass at the farm to 160 tons at year end;
  • Closed the Panama demonstration farm;
  • Received approval in China to conduct a field trial for AquAdvantage Salmon; and
  • Commenced marketing and communications activities, including qualitative and quantitative consumer research in preparation for commercialization.

Financial

  • Completed two public offerings of common shares, raising net funds of $12.4 million;
  • The Company’s Canadian subsidiary received two construction loan instalments totalling $900 thousand from the Department of Economic Development of the Province of Prince Edward Island and the Atlantic Canada Opportunities Agency; and
  • Net loss for the year increased to $13.2 million (2018: $10.4 million) with the ramp-up of production operations in Indiana and Rollo Bay, increased legal fees in support of the FDA legal challenge, and increased headcount.

Sylvia Wulf, Chief Executive Officer of AquaBounty, commented: “This was a transformative year for AquaBounty, as for the first time in the Company’s history we began to grow-out our AquAdvantage Salmon in the United States.  Production of both AquAdvantage and conventional salmon at our Indiana farm is progressing on track with conventional salmon harvest commencing in late Q2 this year and AquAdvantage Salmon harvest commencing in Q4.  We also took steps during 2019 to strengthen our balance sheet with two successful equity raises and to strengthen our management team with the additions of Dave Melbourne as Chief Commercial Officer and Angela Olsen as General Counsel.  We believe we are now well positioned to begin to execute our commercial strategy with the harvest and sale of our salmon from both our Indiana and Rollo Bay farms.”

Inquiries:

AquaBounty Technologies, Inc.
Dave Conley, Corporate Communications       +1 613 294 3078

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 potential harvest size, initiation of a field trial and any related commercial operations in China, and the potential for and timing of the harvest and sale of our fish from our production farms. 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

AquaBounty Technologies, Inc. 
Consolidated Balance Sheets 
 
  As of
  December 31,
  2019   2018
Assets
     
Current assets:      
Cash and cash equivalents $ 2,798,744     $ 3,002,557  
Other receivables 55,198     115,982  
Inventory 1,232,049     76,109  
Prepaid expenses and other current assets 391,162     315,969  
Total current assets 4,477,153     3,510,617  
       
Property, plant and equipment, net 25,065,836     23,716,768  
Right of use assets, net 399,477      
Definite-lived intangible assets, net 157,588     171,292  
Indefinite-lived intangible assets 101,661     191,800  
Other assets 32,024     80,583  
Total assets $ 30,233,739     $ 27,671,060  
       
Liabilities and stockholders’ equity      
Current liabilities:      
Accounts payable and accrued liabilities $ 1,462,809     $ 824,900  
Other current liabilities 62,286     20,423  
Current debt 163,155     71,613  
Total current liabilities 1,688,250     916,936  
       
Long-term lease obligations 352,808      
Long-term debt 4,432,052     3,519,821  
Total liabilities 6,473,110     4,436,757  
       
Commitments and contingencies      
       
Stockholders’ equity:      
Common stock, $0.001 par value, 50,000,000 shares authorized;      
21,635,365, (2018: 15,098,837) shares outstanding 21,635     15,099  
Additional paid-in capital 156,241,363     142,707,957  
Accumulated other comprehensive loss (360,160 )   (574,186 )
Accumulated deficit (132,142,209 )   (118,914,567 )
Total stockholders’ equity 23,760,629     23,234,303  
       
Total liabilities and stockholders’ equity $ 30,233,739     $ 27,671,060  



AquaBounty Technologies, Inc.
Consolidated Statements of Operations and Comprehensive Loss
 
  Years ended December 31,
    2019   2018   2017
Revenues
         
Product Revenues $ 186,738     $ 84,518     $ 53,278  
           
Costs and expenses          
Production costs 3,573,858     2,626,353     1,193,566  
Sales and marketing 709,023     297,687     799,009  
Research and development 2,359,441     3,458,564     3,371,767  
General and administrative 6,723,060     4,067,710     3,921,035  
Total costs and expenses 13,365,382     10,450,314     9,285,377  
           
Operating loss (13,178,644 )   (10,365,796 )   (9,232,099 )
           
Other income (expense)          
Interest expense (62,988 )   (22,257 )   (21,537 )
Other income (expense), net 13,990     5,994     (5,011 )
Total other income (expense) (48,998 )   (16,263 )   (26,548 )
           
Net loss $ (13,227,642 )   $ (10,382,059 )   $ (9,258,647 )
           
Other comprehensive income (loss):          
Foreign currency translation gain (loss) 214,026     (360,302 )   72,388  
Total other comprehensive income (loss) 214,026     (360,302 )   72,388  
           
Comprehensive loss $ (13,013,616 )   $ (10,742,361 )   $ (9,186,259 )
           
Earnings per share          
Net loss $ (13,227,642 )   $ (10,382,059 )   $ (9,258,647 )
Deemed dividend $     $ (1,822,873 )   $  
Net loss attributable to common shareholders $ (13,227,642 )   $ (12,204,932 )   $ (9,258,647 )
           
Basic and diluted net loss per share attributable to common shareholders $ (0.66 )   $ (0.94 )   $ (1.06 )
Weighted average number of common shares -basic and diluted 20,078,017     13,028,760     8,772,494  



AquaBounty Technologies, Inc.
Consolidated Statements of Cash Flows
 
  Years ended December 31,
    2019   2018   2017
 
         
Operating activities          
Net loss $ (13,227,642 )   $ (10,382,059 )   $ (9,258,647 )
Adjustment to reconcile net loss to net cash used in          
operating activities:          
Depreciation and amortization 1,285,902     843,387     184,946  
Share-based compensation 872,177     263,396     122,134  
Gain on disposal of equipment (12,133 )   (13,233 )   (941 )
Loss on asset held for sale 149,800          
Impairment loss 103,116          
Other non-cash charges     (1,364 )    
Changes in operating assets and liabilities:          
Other receivables 65,002     56,212     (11,440 )
Inventory (1,154,222 )   93,956     (169,991 )
Prepaid expenses and other assets 59,942     289,868     (592,602 )
Accounts payable, accrued liabilities and other liabilities 609,311     (966,928 )   625,763  
Net cash used in operating activities (11,248,747 )   (9,816,765 )   (9,100,778 )
           
Investing activities          
Purchase of property, plant and equipment (2,316,809 )   (4,009,736 )   (18,893,264 )
Deposits on equipment purchases (160,675 )   (95,001 )   (153,663 )
Proceeds from sale of equipment 15,848     23,233     941  
Net cash used in investing activities (2,461,636 )   (4,081,504 )   (19,045,986 )
           
Financing activities          
Proceeds from issuance of debt 900,767     771,858     256,807  
Repayment of term debt (85,802 )   (55,615 )   (35,812 )
Proceeds from the issuance of common stock and warrants, net 12,395,348     10,616,046     24,989,257  
Proceeds from exercise of stock options and warrants, net 272,417     5,116,533     27,502  
Net cash provided by financing activities 13,482,730     16,448,822     25,237,754  
           
Effect of exchange rate changes on cash and cash equivalents 23,840     (54,279 )   80,018  
Net change in cash and cash equivalents (203,813 )   2,496,274     (2,828,992 )
Cash and cash equivalents at beginning of period 3,002,557     506,283     3,335,275  
Cash and cash equivalents at the end of period $ 2,798,744     $ 3,002,557     $ 506,283  
           
Supplemental disclosure of cash flow information and non-cash transactions:          
Interest paid in cash $ 62,988     $ 22,257     $ 21,537  
Property and equipment included in accounts payable and accrued liabilities $ 210,270     $ 193,378     $ 1,036,240  
Acquisition of equipment under debt arrangement $     $ 74,068