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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
March 10, 2020
AquaBounty Technologies, Inc.
(Exact name of registrant as specified in its charter)
Delaware
001-36426
04-3156167
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
2 Mill & Main Place, Suite 395, Maynard, Massachusetts
01754
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code
978-648-6000
 
(Former name or former address, if changed since last report.)
Title of each class
Trading Symbol(s)
Name of exchange on which registered
Common Stock, par value $0.001 per share
AQB
The NASDAQ Stock Market LLC
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company     x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ¨




Item 2.02  Results of Operations and Financial Condition.
On March 10, 2020, AquaBounty Technologies, Inc. issued a press release regarding its financial and operational results for the year ended December 31, 2019. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
The information included in this Current Report on Form 8‑K pursuant to Item 2.02, including Exhibit 99.1 attached hereto, is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such filing.
Item 9.01  Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No.
 
Description
 
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
AquaBounty Technologies, Inc.
 
 
(Registrant)
March 10, 2020
 
/s/ David A. Frank
 
 
David A. Frank
 
 
Chief Financial Officer


Exhibit

AquaBounty Technologies, Inc. Announces Results
for the Year Ended December 31, 2019
MAYNARD, Massachusetts, March 10, 2020 - AquaBounty Technologies, Inc. (NASDAQ: 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

 
—