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AquaBounty Technologies, Inc. Results for the year ended December 31, 2018

MAYNARD, Mass., March 07, 2019 (GLOBE NEWSWIRE) -- AquaBounty Technologies, Inc. (AQB) (“AquaBounty” or the “Company”), a biotechnology company focused on enhancing productivity in the aquaculture market and a majority-owned subsidiary of Intrexon Corporation (XON), announces the Company’s financial results for the year ended December 31, 2018.

Results Highlights:

Operational

  • Received approval from the U.S. Food and Drug Administration (“FDA”) to raise AquAdvantage Salmon at the Company’s Indiana farm;
  • completed a second harvest of AquAdvantage Salmon at our Panama farm and sold five tons as fillets in Canada;
  • commenced production operations at the Indiana farm with traditional Atlantic salmon eggs while waiting for approval from the FDA to import AquAdvantage Salmon eggs; and
  • hired Sylvia Wulf as the Company’s new Chief Executive Officer, President, and Director effective January 1, 2019.

Financial

  • Completed a public offering of common shares and warrants, raising net funds of $10.6 million;
  • completed an offering of common shares through the conversion of outstanding warrants, raising net funds of $4.3 million;
  • the Company’s Canadian subsidiary received a construction loan in the amount of CA$2.0 million (US$1.6 million) from the Department of Economic Development of the Province of Prince Edward Island; and
  • net loss for the year increased to $10.4 million (2017: $9.3 million) with the commencement of production operations in Indiana.

Sylvia Wulf, Chief Executive Officer of AquaBounty, stated: “This was a successful year in terms of our operational achievements as we continue to take steps forward that will ultimately lead to harvesting our fish on a regular schedule from our two production farms and expanding our global footprint.”

U.S. Production
Having completed the first phase of upgrades to the Indiana farm, it was stocked with conventional Atlantic salmon eggs from the Company’s hatchery in Canada.  The fish are growing well and are expected to be ready for harvest in the summer of 2020.  Regardless of regulatory approval, commercialization of AquAdvantage Salmon in the U.S. is presently blocked by an Import Alert requiring the issuance of labelling guidance by the FDA.  The FDA recently confirmed in a statement to Congress that final labelling guidance for AquAdvantage Salmon is in process.  While the Company understands, based on this statement, that guidance could be issued within the next few weeks, regulatory decisions are never certain.  As a result of the FDA’s statements to Congress, the Company is taking steps to prepare for the import of AquAdvantage Salmon eggs.

Canada Production
The Company expects to have AquAdvantage Salmon growing in its new Rollo Bay farm facility on Prince Edward Island this quarter with harvest projected to be in the summer of 2020, which will demonstrate the superior growth rate, feed efficiency, and economic benefits of our fish.

International Development
AquaBounty is also establishing operations outside North America with projects currently in process in Brazil, Argentina, Israel, and China.  We believe that our experience with growing salmon in recirculating aquaculture systems, combined with our genetically superior fish, provides an unparalleled opportunity to bring our nutritious, safe, and more sustainably produced salmon to consumers.

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 the potential for and timing of: (1) issuance of labelling guidance and lifting of the Import Alert, (2) FDA approval to import AquAdvantage Salmon eggs into the United States, (3) raising AquAdvantage Salmon at our farm in Indiana, (4) stocking our Rollo Bay facility, (5) harvesting our fish from our production farms, and (6) sale of our fish to consumers; the potential for construction at our facilities on Prince Edward Island; projections for harvest; demonstration of the benefits of AquAdvantage Salmon; and expansion of the Company’s global footprint. 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,
  2018   2017
Assets      
Current assets:      
Cash and cash equivalents $ 2,990,196     $ 492,861  
Certificate of deposit 12,361     13,422  
Other receivables 115,982     183,926  
Inventory 76,109     172,363  
Prepaid expenses and other current assets 315,969     527,322  
Total current assets 3,510,617     1,389,894  
       
Property, plant and equipment, net 23,716,768     21,802,976  
Definite-lived intangible assets, net 171,292     184,995  
Indefinite-lived intangible assets 191,800     191,800  
Other assets 80,583     162,093  
Total assets $ 27,671,060     $ 23,731,758  
       
Liabilities and stockholders’ equity      
Current liabilities:      
Accounts payable and accrued liabilities $ 845,323     $ 2,666,855  
Current debt 71,613     49,794  
Total current liabilities 916,936     2,716,649  
       
Long-term debt 3,519,821     3,034,420  
Total liabilities 4,436,757     5,751,069  
       
Commitments and contingencies      
       
Stockholders’ equity:      
Common stock, $0.001 par value, 50,000,000 shares authorized; 15,098,837, (2017: 8,895,094) shares outstanding 15,099     8,895  
Additional paid-in capital 142,707,957     126,718,186  
Accumulated other comprehensive loss (574,186 )   (213,884 )
Accumulated deficit (118,914,567 )   (108,532,508 )
Total stockholders’ equity 23,234,303     17,980,689  
       
Total liabilities and stockholders’ equity $ 27,671,060     $ 23,731,758  
               

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

  Years ended December 31,
  2018   2017   2016
Revenues          
Product Revenues $ 84,518     $ 53,278     $  
           
Costs and expenses          
Product costs 78,155     50,777      
Sales and marketing 297,687     799,009     860,365  
Research and development 3,458,564     3,371,767     3,429,400  
General and administrative 6,615,908     5,063,824     3,775,289  
Total costs and expenses 10,450,314     9,285,377     8,065,054  
           
Operating loss (10,365,796 )   (9,232,099 )   (8,065,054 )
           
Other income (expense)          
Gain on disposal of equipment 13,233     941     2,861  
Interest expense (22,257 )   (21,537 )   (402,554 )
Other income (expense), net (7,239 )   (5,952 )   (5,914 )
Total other income (expense) (16,263 )   (26,548 )   (405,607 )
           
Net loss $ (10,382,059 )   $ (9,258,647 )   $ (8,470,661 )
           
Other comprehensive income (loss):          
Foreign currency translation gain (loss) (360,302 )   72,388     (59,840 )
Total other comprehensive income (loss) (360,302 )   72,388     (59,840 )
           
Comprehensive loss $ (10,742,361 )   $ (9,186,259 )   $ (8,530,501 )
           
Earnings per share          
Net loss (10,382,059 )   (9,258,647 )   (8,470,661 )
Deemed dividend (1,822,873 )        
Net loss attributable to common shareholders (12,204,932 )   (9,258,647 )   (8,470,661 )
           
Basic and diluted net loss per share attributable to common shareholders
$ (0.94 )   $ (1.06 )   $ (1.60 )
Weighted average number of common shares -basic and diluted 13,028,760     8,772,494     5,303,114  
                 

AquaBounty Technologies, Inc.
Consolidated Statements of Cash Flow

  Years ended December 31,
  2018   2017   2016
           
Operating activities          
Net loss $ (10,382,059 )   $ (9,258,647 )   $ (8,470,661 )
Adjustment to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization 843,387     184,946     153,996  
Share-based compensation 263,396     122,134     218,294  
Gain on disposal of equipment (13,233 )   (941 )   (2,861 )
Non-cash interest and other expenses (1,364 )       395,833  
Changes in operating assets and liabilities:          
Other receivables 56,212     (11,440 )   (121,640 )
Inventory 93,956     (169,991 )    
Prepaid expenses and other assets 289,868     (592,602 )   38,054  
Accounts payable and accrued liabilities (966,928 )   625,763     340,092  
Net cash used in operating activities (9,816,765 )   (9,100,778 )   (7,448,893 )
           
Investing activities          
Purchase of property, plant and equipment (4,009,736 )   (18,893,264 )   (934,495 )
Deposits on equipment purchases (95,001 )   (153,663 )   (156,982 )
Proceeds from sale of equipment 23,233     941     23,844  
Payment of patent costs         (5,664 )
Net cash used in investing activities (4,081,504 )   (19,045,986 )   (1,073,297 )
           
Financing activities          
Proceeds from issuance of debt 771,858     256,807     547,142  
Repayment of term debt (55,615 )   (35,812 )   (6,268 )
Proceeds from the issuance of convertible debt         10,000,000  
Proceeds from the issuance of common stock and warrants, net 10,616,046     24,989,257      
Proceeds from exercise of stock options and warrants, net 5,116,533     27,502      
Net cash provided by financing activities 16,448,822     25,237,754     10,540,874  
           
Effect of exchange rate changes on cash and cash equivalents (53,218 )   77,262     (7,496 )
Net change in cash and cash equivalents 2,497,335     (2,831,748 )   2,011,188  
Cash and cash equivalents at beginning of period 492,861     3,324,609     1,313,421  
Cash and cash equivalents at the end of period $ 2,990,196     $ 492,861     $ 3,324,609  
           
Supplemental disclosure of cash flow information and non-cash transactions:          
Interest paid in cash $ 22,257     $ 21,537     $ 6,721  
Conversion of convertible debt and accrued interest to common stock $     $     $ 10,395,833  
Property and equipment included in accounts payable and accrued liabilities
$ 193,378     $ 1,036,240     $ 50,132  
Acquisition of equipment under debt arrangement $ 74,068     $