Document


 
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)
May 5, 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 May 5, 2020, AquaBounty Technologies, Inc. issued a press release regarding its financial and operational results for the quarter ended March 31, 2020. 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)
May 5, 2020
 
/s/ David A. Frank
 
 
David A. Frank
 
 
Chief Financial Officer


Exhibit

AquaBounty Technologies Provides Corporate Update and First Quarter 2020 Financial Results
Company Remains On-Track for First Conventional Salmon Harvest to Begin in June; First AquAdvantage Salmon Harvest to Begin in the Fourth Quarter of 2020
MAYNARD, Mass., May 5, 2020 – AquaBounty Technologies, Inc. (NASDAQ: AQB) (“AquaBounty” or the “Company”), a land-based aquaculture company utilizing technology to enhance productivity and sustainability, has provided a corporate update and financial results for the first quarter ended March 31, 2020.
Recent Company Highlights:
Harvest schedules remain on-track, with first harvest of conventional Atlantic salmon scheduled to begin in June 2020, and the first harvest of the Company’s proprietary AquAdvantage salmon (AAS) scheduled to begin in the fourth quarter of 2020. Currently, AquaBounty has over 300 metric tons of fish in the water between its two farms located in Indiana and Rollo Bay.
Implemented increased biosecurity and employee safety measures in response to the COVID-19 pandemic.
Appointed Theodore Fisher and Alana Czypinski to the board of directors.
Fortified balance sheet from an over-subscribed February 2020 public offering, securing $15.5 million in gross proceeds.
Planning for the next large-scale farm is in full development pending the final selection of the engineering and Recirculating Aquaculture System (RAS) technology firms.
Retained MZ Group to lead strategic investor relations and shareholder communication program across all key markets.
Discussions with potential customers and distributors remain on track with timing of harvests.
Management Commentary
Sylvia Wulf, Chief Executive Officer of AquaBounty, stated: “The COVID-19 pandemic is a significant challenge for the global economy, and I am immensely proud of our employees for their outstanding performance and unwavering care for our fish. A challenge like this pandemic highlights the need for technology and supply chain alternatives like ours, which address a safe, sustainable, and secure food supply. Our operational experience and expertise have helped us navigate through this unique environment and effectively execute against our strategy.”
“AquaBounty is rapidly approaching its commercialization phase, and we are pleased to announce that our first harvest of conventional Atlantic salmon remains on track to begin in June 2020, which will provide our first revenues on a commercial scale. This also allows us to continue demonstrating our expertise in aquaculture and ensure our supply chain is in place prior to our first harvest of AquAdvantage salmon, beginning in the fourth quarter of 2020. Looking forward, we plan to increase production volumes in subsequent months. With a world-class team in place and a fortified balance sheet from our over-subscribed $15.5 million public offering, we are better positioned than ever to execute our strategic plan,” continued Wulf.
Wulf added: “As we prepare for the future, we continue to work through the process of formalizing offtake agreements with processors and customers. We’re also taking steps to plan the next large-scale production farm, including identifying an ideal site location to maximize logistics and best serve our customers, selecting a design and construction firm, and choosing a RAS-technology provider.”



“We are confident in our ability to execute upon the biggest milestones in the Company’s history, while concurrently moving forward with our longer-term operating plans to increase scale, drive technology enhancements, and expand geographically—all while driving meaningful shareholder value and providing solutions to feed the world’s growing population,” concluded Wulf.
First Quarter 2020 Financial Summary
Cash and cash equivalents were $14.7 million as of March 31, 2020, compared with $2.8 million as of December 31, 2019. The increase in cash and cash equivalents was primarily due to the completion of a public offering in February 2020, whereby the Company raised gross proceeds of $15.5 million.
Cash used in operations in the first quarter of 2020 was $2.9 million, compared with cash used in operations of $2.1 million in the same period of the prior year.
Net loss in the first quarter of 2020 was to $3.1 million, or $0.11 per share, compared to a net loss of $2.8 million, or $0.18 per share, in the same period of the prior year.
General and administrative expenses in the first quarter of 2020 were $1.6 million, compared to $1.3 million in the same period of the prior year. This increase is primarily due to strengthening the management team.
Research and development expenses in the first quarter of 2020 were $569 thousand, compared to $663 thousand in the same period of the prior year. The decrease was primarily due to lower field trial costs.
About AquaBounty Technologies, Inc.
AquaBounty Technologies, Inc. (NASDAQ: AQB) is a commercial aquaculture company focused on improving efficiency, sustainability, and profitability, leveraging decades of biotechnology expertise to ensure the availability of high-quality seafood to meet global consumer demand. By 2016, both the U.S. Food and Drug Administration and Health Canada approved the Company’s AquAdvantage salmon as the first and only bioengineered animal protein for human consumption.
The Company’s AquAdvantage fish program is based upon a single, specific molecular modification that results in more rapid growth in early development, resulting in a 70 percent increase in annual production output for AquAdvantage versus conventional Atlantic salmon. With aquaculture facilities located in Indiana and on Prince Edward Island, AquaBounty is raising its disease-free, antibiotic-free salmon in land-based Recirculating Aquaculture Systems, resulting in a reduced carbon footprint and no risk of pollution to 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 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 the harvesting and sale of our fish from our production farms, future revenues, the development of new farms and the selection of related service providers, the development of a shareholder communication program, and arrangements with potential customers, distributors, and processors; the effectiveness of our COVID-19 response and the potential impact of the pandemic; the sufficiency of prior capital raises; our scale and volume of production; and the potential for fish diseases, use of antibiotics, pollution of the marine environment, annual production increases, demonstration of aquaculture expertise, reduction in carbon footprint, development of new technologies, and our geographic expansion. 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.
Company Contact:
AquaBounty Technologies
Dave Conley
Corporate Communications
(613) 294-3078
Investor Relations:
Greg Falesnik
Managing Director
MZ Group - MZ North America
(949) 385-6449
AQB@mzgroup.us



AquaBounty Technologies, Inc.
Consolidated Balance Sheets
(Unaudited)
 
As of
 
March 31,
 
December 31,
 
2020
 
2019
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
14,749,746

 
$
2,798,744

Other receivables
82,873

 
55,198

Inventory
1,833,957

 
1,232,049

Prepaid expenses and other current assets
364,700

 
391,162

Total current assets
17,031,276

 
4,477,153

 
 
 
 
Property, plant and equipment, net
23,708,229

 
25,065,836

Right of use assets, net
385,519

 
399,477

Definite-lived intangible assets, net
154,162

 
157,588

Indefinite-lived intangible assets
101,661

 
101,661

Other assets
33,331

 
32,024

Total assets
$
41,414,178

 
$
30,233,739

 
 
 
 
Liabilities and stockholders’ equity
 
 
 
Current liabilities:
 
 
 
Accounts payable and accrued liabilities
$
1,834,685

 
$
1,462,809

Other current liabilities
62,939

 
62,286

Current debt
150,730

 
163,155

Total current liabilities
2,048,354

 
1,688,250

 
 
 
 
Long-term lease obligations
336,997

 
352,808

Long-term debt
4,032,744

 
4,432,052

Total liabilities
6,418,095

 
6,473,110

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Stockholders’ equity:
 
 
 
Common stock, $0.001 par value, 50,000,000 shares authorized;
 
 
 
32,085,684 (2019: 21,635,365) shares outstanding
32,086

 
21,635

Additional paid-in capital
170,957,969

 
156,241,363

Accumulated other comprehensive loss
(742,145
)
 
(360,160
)
Accumulated deficit
(135,251,827
)
 
(132,142,209
)
Total stockholders’ equity
34,996,083

 
23,760,629

 
 
 
 
Total liabilities and stockholders’ equity
$
41,414,178

 
$
30,233,739




AquaBounty Technologies, Inc.
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
 
Three Months Ended
March 31,
 
2020
 
2019
 
 
 
 
Revenues
 
 
 
Product revenues
$
6,753

 
$
97,885

 
 
 
 
Costs and expenses
 
 
 
Production costs
841,434

 
862,255

Sales and marketing
50,788

 
71,991

Research and development
568,762

 
663,481

General and administrative
1,637,190

 
1,255,851

Total costs and expenses
3,098,174

 
2,853,578

 
 
 
 
Operating loss
(3,091,421
)
 
(2,755,693
)
 
 
 
 
Other income (expense)
 
 
 
Interest expense
(17,045
)
 
(13,338
)
Other income (expense), net
(1,152
)
 
5,100

Total other income (expense)
(18,197
)
 
(8,238
)
 
 
 
 
Net loss
$
(3,109,618
)
 
$
(2,763,931
)
 
 
 
 
Other comprehensive income (loss):
 
 
 
Foreign currency translation gain (loss)
(381,985
)
 
87,551

Total other comprehensive income (loss)
(381,985
)
 
87,551

 
 
 
 
Comprehensive loss
$
(3,491,603
)
 
$
(2,676,380
)
 
 
 
 
 
 
 
 
Basic and diluted net loss per share
$
(0.11
)
 
$
(0.18
)
Weighted average number of common shares -
 
 
 
basic and diluted
27,116,754

 
15,687,681