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 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
|
|
|
|
|
|
|
|
|
|
|
|
|
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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