AquaBounty Technologies Announces Results for the Quarter and Year Ended December 31, 2020
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.
“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.
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.
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.
Greg Falesnik or Luke Zimmerman
MZ Group - MZ North America
AquaBounty Technologies, Inc.
Consolidated Balance Sheets
|Cash and cash equivalents||$||95,751,160||$||2,798,744|
|Prepaid expenses and other current assets||358,692||391,162|
|Total current assets||97,681,907||4,477,153|
|Property, plant and equipment, net||26,930,338||25,065,836|
|Right of use assets, net||341,997||399,477|
|Definite lived intangible assets, net||143,885||157,588|
|Indefinite lived intangible assets||101,661||101,661|
|Liabilities and stockholders' equity|
|Accounts payable and accrued liabilities||$||1,760,103||$||1,462,809|
|Other current liabilities||62,483||62,286|
|Total current liabilities||2,082,525||1,688,250|
|Long-term lease obligations||290,327||352,808|
|Common stock, $0.001 par value, 80,000,000 shares authorized;|
|55,497,133 (2019: 21,635,365) shares outstanding||55,497||21,635|
|Additional paid-in capital||263,629,116||156,241,363|
|Accumulated other comprehensive loss||(267,258||)||(360,160||)|
|Total stockholders' equity||114,875,161||23,760,629|
|Total liabilities and stockholders' equity||$||125,776,503||$||30,233,739|
AquaBounty Technologies, Inc.
Consolidated Statements of Operations and Comprehensive Loss
|Years ended December 31,|
|Costs and expenses|
|Sales and marketing||533,428||709,023||297,687|
|Research and development||2,364,610||2,359,441||3,458,564|
|General and administrative||6,797,443||6,723,060||4,067,710|
|Total costs and expenses||16,375,493||13,365,382||10,450,314|
|Other income (expense)|
|Other income (expense), net||212||13,990||5,994|
|Total other income (expense)||(152,155||)||(48,998||)||(16,263||)|
|Other comprehensive income (loss):|
|Foreign currency translation gain (loss)||92,902||214,026||(360,302||)|
|Total other comprehensive income (loss)||92,902||214,026||(360,302||)|
|Earnings per share|
|Net loss attributable to common shareholders||$||(16,399,985||)||$||(13,227,642||)||$||(12,204,932||)|
|Basic and diluted net loss per share attributable to common shareholders||$||(0.45||)||$||(0.66||)||$||(0.94||)|
|Weighted average number of common shares - basic and diluted||36,347,398||20,078,017||13,028,760|
AquaBounty Technologies, Inc.
Consolidated Statements of Cash Flows
|Years ended December 31,|
|Adjustment to reconcile net loss to net cash used in|
|Depreciation and amortization||1,494,596||1,285,902||843,387|
|Gain on sale of equipment||(1,816||)||(12,133||)||(13,233||)|
|Loss on asset held for sale||—||149,800||—|
|Other non-cash charges||46,155||—||(1,364||)|
|Changes in operating assets and liabilities:||—|
|Prepaid expenses and other assets||(83,850||)||59,942||289,868|
|Accounts payable and accrued liabilities||492,419||609,311||(966,928||)|
|Net cash used in operating activities||(14,288,821||)||(11,248,747||)||(9,816,765||)|
|Purchase of property, plant and equipment||(3,975,135||)||(2,316,809||)||(4,009,736||)|
|Deposits on equipment purchases||(349,847||)||(160,675||)||(95,001||)|
|Proceeds from sale of equipment||99,816||15,848||23,233|
|Proceeds from legal settlement, net||1,014,008||—||—|
|Other investing activities||(27,253||)||—||—|
|Net cash used in investing activities||(3,238,411||)||(2,461,636||)||(4,081,504||)|
|Proceeds from issuance of debt||4,221,130||900,767||771,858|
|Payment of debt issuance costs||(91,620||)||—||—|
|Repayment of term debt||(70,826||)||(85,802||)||(55,615||)|
|Proceeds from the issuance of common stock, net||104,625,615||12,395,348||10,616,046|
|Proceeds from exercise of stock options and warrants, net||2,318,709||272,417||5,116,533|
|Net cash provided by financing activities||111,003,008||13,482,730||16,448,822|
|Effect of exchange rate changes on cash, cash equivalents and restricted cash||(23,360||)||23,840||(54,279||)|
|Net change in cash, cash equivalents and restricted cash||93,452,416||(203,813||)||2,496,274|
|Cash, cash equivalents and restricted cash at beginning of period||2,798,744||3,002,557||506,283|
|Cash, cash equivalents and restricted cash at end of period||$||96,251,160||$||2,798,744||$||3,002,557|
|Supplemental disclosure of cash flow information and|
|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|