AquaBounty Technologies Announces Financial Results for the Quarter and Six Months Ended June 30, 2021

Rhea-AI Summary

AquaBounty Technologies (AQB) recently announced significant progress in its operations and financial results for Q2 2021. The company successfully completed its first commercial harvests of genetically engineered (GE) Atlantic salmon from its Indiana and Rollo Bay farms. A new large-scale farm site has been selected in Pioneer, Ohio, with expected annual production of 10,000 metric tons. Revenue for the first half of 2021 reached $302,000, up from $10,000 in H1 2020, while operating expenses increased to $9.6 million. The net loss for the period was $9.4 million, with cash reserves at $204 million.

Positive

• First commercial harvests of GE salmon successfully completed.
• Revenue growth from $10K to $302K in H1 2021.
• Selection of Ohio for a new large-scale farm with a capacity of 10,000 metric tons.

Negative

• Net loss increased to $9.4 million from $6.6 million year-over-year.
• Operating expenses rose to $9.6 million, reflecting increased production costs.

Successful First Harvests of GE Salmon Completed and Site Selected for First Large-Scale Farm

MAYNARD, Mass., Aug. 04, 2021 (GLOBE NEWSWIRE) -- AquaBounty Technologies, Inc. (Nasdaq: AQB) (“AquaBounty” or the “Company”), a land-based aquaculture company utilizing technology to enhance productivity and sustainability, has provided financial results for the second quarter and six months ended June 30, 2021.

Second Quarter 2021 Highlights

• Successfully completed the first commercial scale harvests of it genetically engineered (“GE”) Atlantic salmon from both its Indiana and Rollo Bay farm sites in June.
• Selected Pioneer, Ohio as the location for its next large-scale farm with a planned annual production capacity of 10,000 metric tons. Construction is slated to begin within the next six months and the Company anticipates commercial grow-out to commence in 2023.
• Announced the regulatory approval of the Company’s GE Atlantic salmon by Brazil’s National Biosafety Technical Commission (CTNBio).
• Elected Gail Sharps Myers—EVP, Chief Legal Officer, Chief People Officer and Corporate Secretary for Denny’s Corporation—to AquaBounty’s Board of Directors at the Annual Shareholders’ Meeting.
• Appointed Melissa Daley as the Company’s Chief People Officer.
  

Management Commentary

“The second quarter of 2021 was marked by two significant operational milestones for the Company, including the first commercial harvests and sales of our GE salmon from both our Indiana and Rollo Bay farm sites, and the selection of Pioneer, Ohio as the site location for our large-scale farm,” said Sylvia Wulf, Chief Executive Officer of AquaBounty. “Our next farm will have approximately eight times the planned capacity of our Indiana location. We will continue to provide updates as we gain more specificity on the timelines for permitting and construction, with the commencement of grow-out targeted in 2023.

“In both Indiana and Rollo Bay, our first commercial harvests have been a resounding success, with orders in place for the entire output from our customers who are now introducing the salmon in their markets. We have experienced challenges with the availability of personnel and the age of the technology at our Indiana farm, however we are addressing these issues and incorporating insights gained into the design of our large-scale farm. We will continue to ramp up our harvest schedule over the remainder of this year to each farm’s full capacity to meet growing demand. With the food service industry quickly regaining momentum toward pre-pandemic activity and with restaurants reopening nationally, we remain very optimistic for the demand for our fish.

“We also continue to move forward in our international expansion. After extensive field trials in Brazil, our regulatory application for the sale and consumption of our GE salmon was approved by CTNBio, moving us closer to new market opportunities in South America. We are also actively progressing on potential opportunities in Israel and China.”

“Looking ahead, the next-evolution of land-based salmon farming for AquaBounty is upon us and we are ready to scale to meet the demand with our current and planned facilities. I look forward to sharing additional developments and progress in the months ahead with our shareholders and customers,” concluded Wulf.

Financial Summary through June 30, 2021

• Revenue for the first six months of 2021 was $302 thousand, compared to $10 thousand in the same period of the prior year. Harvests began during June and are ramping steadily.
• Operating expenses for the first six months of 2021 were $9.6 million, compared to $6.6 million in the same period of the prior year. The increase reflects the growth in biomass, headcount and production expenses at the farms, as well as increases in corporate and marketing expenses.
• Net loss for the first six months of 2021 was $9.4 million, compared to $6.6 million in the same period of the prior year.
• Cash, cash equivalents and marketable securities were $204.0 million as of June 30, 2021, compared with $95.8 million as of December 31, 2020.

About AquaBounty
AquaBounty Technologies, Inc. (NASDAQ: AQB) is a leader in aquaculture leveraging decades of technology expertise to deliver game changing solutions that solve global problems, while improving efficiency, sustainability and profitability. AquaBounty provides fresh Atlantic salmon to nearby markets by raising its fish in carefully monitored land-based fish farms through a safe, secure and sustainable process. The Company’s land-based Recirculating Aquaculture System (“RAS”) farms, located in Indiana, United States and Prince Edward Island, Canada, are close to key consumption markets and are designed to prevent disease and to include multiple levels of fish containment to protect wild fish populations. AquaBounty is raising nutritious salmon that is free of antibiotics and other contaminants and provides a solution resulting in a reduced carbon footprint and no risk of pollution to marine ecosystems as compared to traditional sea-cage farming. For more information on AquaBounty, please visit www.aquabounty.com or follow us on Facebook, Twitter, LinkedIn and Instagram.

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 release are forward-looking statements, including, but not limited to, statements regarding the location and anticipated capacity of our planned farm in Ohio, the timing of the commencement of construction and the beginning of commercial production, the expected demand for our products, our harvesting schedule, purchase orders, commitments and prospective agreements with customers; international expansion and the anticipated growth in market size and geographies. Forward-looking statements may be identified with words such as “will,” “may,” “can,” “expect,” “plan,” “slate,” “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 or Luke Zimmerman
MZ Group - MZ North America
(949) 259-4987
AQB@mzgroup.us

AquaBounty Technologies, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

	As of
	June 30,				December 31,
	2021				2020
Assets
Current assets:
Cash and cash equivalents	$	132,345,351			$	95,751,160
Marketable securities		71,693,675				—
Inventory		2,655,098				1,525,377
Prepaid expenses and other current assets		1,285,168				405,370
Total current assets		207,979,292				97,681,907
Property, plant and equipment, net		29,159,517				26,930,338
Right of use assets, net		313,318				341,997
Intangible assets, net		238,694				245,546
Restricted cash		500,000				500,000
Other assets		81,629				76,715
Total assets	$	238,272,450			$	125,776,503
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities	$	1,980,365			$	1,760,103
Other current liabilities		63,902				62,483
Current debt, net		501,553				259,939
Total current liabilities		2,545,820				2,082,525
Long-term lease obligations		257,826				290,327
Long-term debt, net		8,766,986				8,528,490
Total liabilities		11,570,632				10,901,342
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value, 80,000,000 shares authorized;
71,025,738 and 55,497,133 shares outstanding as of June 30, 2021 and December 31,2020, respectively		71,026				55,497
Additional paid-in capital		384,674,939				263,629,116
Accumulated other comprehensive loss		(112,325	)			(267,258	)
Accumulated deficit		(157,931,822	)			(148,542,194	)
Total stockholders' equity		226,701,818				114,875,161
Total liabilities and stockholders' equity	$	238,272,450			$	125,776,503

AquaBounty Technologies, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)

	Three Months Ended June 30,								Six Months Ended June 30,
	2021				2020				2021				2020
Revenues
Product revenues	$	227,393			$	2,950			$	301,765			$	9,703
Costs and expenses
Product costs		1,847,596				1,041,316				3,402,251				1,882,750
Sales and marketing		548,881				137,434				867,516				188,222
Research and development		431,373				635,655				931,993				1,204,417
General and administrative		2,578,958				1,693,544				4,364,468				3,330,734
Total costs and expenses		5,406,808				3,507,949				9,566,228				6,606,123
Operating loss		(5,179,415	)			(3,504,999	)			(9,264,463	)			(6,596,420	)
Other income (expense)
Interest expense		(80,210	)			(18,147	)			(159,014	)			(35,192	)
Other income (expense), net		28,888				(538	)			33,849				(1,690	)
Total other income (expense)		(51,322	)			(18,685	)			(125,165	)			(36,882	)
Net loss	$	(5,230,737	)		$	(3,523,684	)		$	(9,389,628	)		$	(6,633,302	)
Other comprehensive income (loss):
Foreign currency		65,924				165,501				145,963				(216,484	)
Unrealized gains		8,970				—				8,970				—
Total other comprehensive income (loss)		74,894				165,501				154,933				(216,484	)
Comprehensive loss	$	(5,155,843	)		$	(3,358,183	)		$	(9,234,695	)		$	(6,849,786	)
Basic and diluted net loss per share	$	(0.07	)		$	(0.11	)		$	(0.14	)		$	(0.22	)
Weighted average number of common shares -
basic and diluted		71,021,141				32,097,992				67,803,904				29,607,373

AquaBounty Technologies, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)

	Six Months Ended June 30,
	2021				2020
Operating activities
Net loss	$	(9,389,628	)		$	(6,633,302	)
Adjustment to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization		857,842				701,593
Share-based compensation		217,069				309,244
Other non-cash charge		8,565				40,600
Changes in operating assets and liabilities:
Inventory		(1,122,422	)			(1,261,930	)
Prepaid expenses and other assets		(876,139	)			(409,635	)
Accounts payable and accrued liabilities		(153,120	)			280,142
Net cash used in operating activities		(10,457,833	)			(6,973,288	)
Investing activities
Purchase of property, plant and equipment		(2,437,911	)			(1,588,497	)
Proceeds from sale of asset held for sale		—				98,000
Purchases of marketable securities		(71,702,645	)			—
Proceeds from legal settlement, net		—				1,014,008
Other investing activities		(11,010	)			(12,460	)
Net cash used in investing activities		(74,151,566	)			(488,949	)
Financing activities
Proceeds from issuance of debt		406,378				221,130
Repayment of term debt		(79,600	)			(41,262	)
Proceeds from the issuance of common stock, net		119,120,437				14,521,704
Proceeds from the exercise of stock options and warrants		1,723,846				—
Net cash provided by financing activities		121,171,061				14,701,572
Effect of exchange rate changes on cash, cash equivalents and restricted cash		32,529				(16,685	)
Net change in cash, cash equivalents and restricted cash		36,594,191				7,222,650
Cash, cash equivalents and restricted cash at beginning of period		96,251,160				2,798,744
Cash, cash equivalents and restricted cash at end of period	$	132,845,351			$	10,021,394
Reconciliation of cash, cash equivalents and restricted cash reported
in the consolidated balance sheet:
Cash and cash equivalents	$	132,345,351			$	10,021,394
Restricted cash		500,000				—
Total cash, cash equivalents and restricted cash	$	132,845,351			$	10,021,394
Supplemental disclosure of cash flow information and
non-cash transactions:
Interest paid in cash	$	149,533			$	17,058
Property and equipment included in accounts payable and accrued liabilities	$	388,495			$	238,235

FAQ

What were AquaBounty's revenue figures for Q2 2021?

AquaBounty reported revenue of $302,000 for the first half of 2021, compared to $10,000 for the same period in 2020.

What is the significance of AquaBounty's first harvest?

The successful completion of the first commercial harvests marks a pivotal operational milestone for AquaBounty, contributing to revenue growth and validating their production methods.

What are AquaBounty's plans for expansion?

AquaBounty selected Pioneer, Ohio as the site for its next large-scale farm, with a planned production capacity of 10,000 metric tons, targeting a commercial grow-out in 2023.

What were the operating expenses for AquaBounty in H1 2021?

The operating expenses for AquaBounty in the first half of 2021 totaled $9.6 million, up from $6.6 million in the same period last year.

How did AquaBounty's net loss change in H1 2021?

AquaBounty's net loss increased to $9.4 million in the first half of 2021, compared to $6.6 million in the same period in 2020.