AquaBounty Technologies Announces First Quarter 2021 Financial Results

Rhea-AI Summary

AquaBounty Technologies (AQB) announced its financial results for Q1 2021, achieving a revenue of $74,000, up from $7,000 in Q1 2020, despite pandemic-related challenges. The company reported a net loss of $4.2 million, compared to $3.1 million the previous year. AquaBounty raised $127.1 million through a public offering in February to finance the construction of Farm 3, which will increase production capacity. With new sales director Dennis Bryant on board, the company is set to launch its genetically engineered salmon commercially in May 2021, following positive customer feedback and a resurgence in the food service industry.

Positive

• Revenue increased to $74,000 from $7,000 year-over-year.
• Raised $127.1 million in gross proceeds to finance Farm 3.
• Appointment of Dennis Bryant as Director of Sales to enhance customer partnerships.
• Commercial launch of GE salmon expected May 2021 after successful sampling.

Negative

• Net loss of $4.2 million, compared to $3.1 million the previous year.
• Operating expenses increased to $4.2 million from $3.1 million year-over-year.

MAYNARD, Mass., May 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, today announced the Company’s financial results for its fiscal first quarter ended March 31, 2021.

First Quarter 2021 Key Highlights

• Fortified balance sheet with $127.1 million in gross proceeds from the closing of an underwritten public offering of common stock in February, to provide further financing for Farm 3 and corporate working capital.
• Appointed veteran Atlantic salmon sales and marketing executive Dennis Bryant as the Company’s Director of Sales, who will oversee all aspects of building and servicing AquaBounty’s customer partnerships.
• Participated in key investor conferences to improve visibility within the investment community, including the Canaccord Genuity 2021 Virtual Sustainability Conference, the H.C. Wainwright Global Life Sciences Conference, and the upcoming Oppenheimer Emerging Growth Conference.
  

Management Commentary

“During the first quarter of 2021, we completed the setup of our commercial framework and we are now preparing for the first commercial scale harvest of our genetically engineered (“GE”) salmon, which we expect to begin this month,” said Sylvia Wulf, Chief Executive Officer of AquaBounty. “The appointment of Dennis Bryant as our Director of Sales is a critical step in our commitment to customer satisfaction, and we are confident that all key processes are in place for the launch of our fish during May.

“We are looking forward to a successful commercial launch of our GE salmon, which will mark a tremendous milestone that has been decades in the making. We have the experience, capital and technology necessary to succeed, and the warm reception from our potential customers has fortified our belief that AquaBounty represents the next-evolution of land-based salmon farming. We remain focused on continued execution in the weeks and months ahead as we strive to create sustainable, long-term value for our shareholders.

“After successful sampling efforts of our GE salmon with widely respected seafood distributors and other interested groups in the first quarter, we began the customer onboarding process, which focused on finalizing planning and allocations for our impending first harvest. Our GE salmon was well received in sampling, and our sales team is very optimistic regarding near-term demand expectations, considering the resurgence of the food service industry as COVID-19 concerns begin to dissipate and consumers return to restaurants.

“We raised $127.1 million in gross proceeds in a public offering of equity in February to further finance the construction of our next farm with a planned capacity of 10,000 metric tons, which will greatly increase the Company’s growing capacity. We are currently in due diligence on the final site location and expect to commence construction later this year and commercial production in 2023. Ahead of these rigorous efforts, we have made substantial progress on the farm design with our engineering and RAS technology partners, ensuring we have an efficient, replicable facility design that will serve us for years to come,” concluded Wulf.

First Quarter 2021 Financial Summary

• Revenue in the first quarter of 2021 was $74 thousand, as compared to $7 thousand in in the same period of the prior year. Revenue was impacted by the continued effects of the COVID-19 pandemic on demand in the food service industry, which has started to reemerge as vaccines become more widely available.
• Operating expenses in the first quarter of 2021 were $4.2 million, as compared to $3.1 million in the same period of the prior year. The increase in operating expenses was primarily due to production and headcount increases at the Company’s two farms.
• Net loss in the first quarter of 2021 was $4.2 million, as compared to $3.1 million in the same period of the prior year.
• Cash, cash equivalents and restricted cash were $211.4 million as of March 31, 2021, compared with $96.3 million as of December 31, 2020. The Company fortified its balance sheet with $127.1 million in gross proceeds from a public offering of common stock in February.

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 help 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 genetically engineered salmon program is based upon a single, specific molecular modification in salmon that results in more rapid growth in early development. With aquaculture farms located in Prince Edward Island, Canada, and Indiana, United States, AquaBounty is raising salmon that is free of antibiotics and other contaminants, in land-based Recirculating Aquaculture Systems (“RAS”) which are designed to prevent disease and to include multiple levels of fish containment to protect wild fish populations. AquaBounty’s solution offers 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 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. Consolidated Balance Sheets (Unaudited)
	As of
	March 31,				December 31,
	2021				2020
Assets
Current assets:
Cash and cash equivalents	$	210,899,434			$	95,751,160
Inventory		2,106,473				1,525,377
Prepaid expenses and other current assets		470,961				405,370
Total current assets		213,476,868				97,681,907
Property, plant and equipment, net		27,904,874				26,930,338
Right of use assets, net		327,386				341,997
Intangible assets, net		242,120				245,546
Restricted cash		500,000				500,000
Other assets		84,685				76,715
Total assets	$	242,535,933			$	125,776,503
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities	$	1,555,066			$	1,760,103
Other current liabilities		62,765				62,483
Current debt		378,791				259,939
Total current liabilities		1,996,622				2,082,525
Long-term lease obligations		274,232				290,327
Long-term debt		8,622,436				8,528,490
Total liabilities		10,893,290				10,901,342
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value, 80,000,000 shares authorized;
70,983,145 (2020: 55,497,133) shares outstanding		70,983				55,497
Additional paid-in capital		384,459,964				263,629,116
Accumulated other comprehensive loss		(187,219	)			(267,258	)
Accumulated deficit		(152,701,085	)			(148,542,194	)
Total stockholders' equity		231,642,643				114,875,161
Total liabilities and stockholders' equity	$	242,535,933			$	125,776,503

AquaBounty Technologies, Inc. Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
	Three Months Ended March 31,
	2021				2020
Revenues
Product revenues	$	74,372			$	6,753
Costs and expenses
Product costs		1,554,655				841,434
Sales and marketing		318,635				50,788
Research and development		500,620				568,762
General and administrative		1,785,510				1,637,190
Total costs and expenses		4,159,420				3,098,174
Operating loss		(4,085,048	)			(3,091,421	)
Other income (expense)
Interest expense		(78,804	)			(17,045	)
Other income (expense), net		4,961				(1,152	)
Total other income (expense)		(73,843	)			(18,197	)
Net loss	$	(4,158,891	)		$	(3,109,618	)
Other comprehensive income (loss):
Foreign currency translation income (loss)		80,039				(381,985	)
Total other comprehensive income (loss)		80,039				(381,985	)
Comprehensive loss	$	(4,078,852	)		$	(3,491,603	)
Basic and diluted net loss per share	$	(0.06	)		$	(0.11	)
Weighted average number of common shares -
basic and diluted		64,550,920				27,116,754

AquaBounty Technologies, Inc. Consolidated Statements of Cash Flows (Unaudited)
	Three Months Ended March 31,
	2021				2020
Operating activities
Net loss	$	(4,158,891	)		$	(3,109,618	)
Adjustment to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization		422,185				347,859
Share-based compensation		129,715				205,353
Other non-cash charge		4,203				—
Changes in operating assets and liabilities:
Inventory		(577,154	)			(610,200	)
Prepaid expenses and other assets		(63,966	)			(107,922	)
Accounts payable and accrued liabilities		(274,486	)			339,818
Net cash used in operating activities		(4,518,394	)			(2,934,710	)
Investing activities
Purchase of property, plant and equipment		(1,208,183	)			(691,351	)
Proceeds from sale of asset held for sale		—				98,000
Proceeds from legal settlement, net		—				1,014,008
Other investing activities		(11,010	)			(1,307	)
Net cash (used in) provided by investing activities		(1,219,193	)			419,350
Financing activities
Proceeds from issuance of debt		187,120				—
Repayment of term debt		(38,885	)			(39,391	)
Proceeds from the issuance of common stock, net		119,120,437				14,521,704
Proceeds from the exercise of stock options and warrants, net		1,596,182				—
Net cash provided by financing activities		120,864,854				14,482,313
Effect of exchange rate changes on cash, cash equivalents and restricted cash		21,007				(15,951	)
Net change in cash, cash equivalents and restricted cash		115,148,274				11,951,002
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	$	211,399,434			$	14,749,746
Reconciliation of cash, cash equivalents and restricted cash reported
in the consolidated balance sheet:
Cash and cash equivalents	$	210,899,434			$	14,749,746
Restricted cash		500,000				—
Total cash, cash equivalents and restricted cash	$	211,399,434			$	14,749,746
Supplemental disclosure of cash flow information and
non-cash transactions:
Interest paid in cash	$	73,685			$	17,045
Property and equipment included in accounts payable and accrued liabilities	$	82,068			$	257,884

FAQ

What was AquaBounty's revenue for Q1 2021?

AquaBounty reported a revenue of $74,000 for Q1 2021.

What are the financial results of AquaBounty for Q1 2021?

AquaBounty reported a net loss of $4.2 million and operating expenses of $4.2 million for Q1 2021.

When is AquaBounty launching its genetically engineered salmon?

AquaBounty plans to commercially launch its GE salmon in May 2021.

How much capital did AquaBounty raise in February 2021?

AquaBounty raised $127.1 million in gross proceeds from a public offering in February 2021.

What impact did the COVID-19 pandemic have on AquaBounty's Q1 results?

The COVID-19 pandemic impacted demand, affecting revenue but the food service industry is beginning to recover.