10-Q 1 aqb-20230930x10q.htm 10-Q aqb-20230930x10q
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________

Form 10-Q

x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________________ to _____________________

Commission File Number: 001-36426

____________

AquaBounty Technologies, Inc.

(Exact name of the registrant as specified in its charter)

Delaware

04-3156167

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

2 Mill & Main Place, Suite 395

Maynard, Massachusetts 01754

(978) 648-6000

(Address and telephone number of the registrant’s principal executive offices)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x    No  o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit such files).

Yes  x    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

o

Accelerated filer

o

Non-accelerated filer

x

Smaller reporting company

x

Emerging growth company

o

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.  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ¨    No x 

At November 6, 2023, the registrant had 3,846,772 shares of common stock, par value $0.001 per share (“Common Shares”) outstanding.

 

 

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than present and historical facts and conditions contained in the Quarterly Report on Form 10-Q, are forward looking statements, including statements regarding the implementation and likelihood of achieving our business plan; statements regarding future capital requirements, revenue, expenses and operating results, as well as the impact of inflation; our plans for development of new farms and renovations to existing farms (including costs, timing, locations, third-party involvement and output therefrom); our cash position and ability to raise additional capital to finance our activities and the terms of such financing; and statements regarding compliance with the listing rules of Nasdaq. We sometimes use the words “anticipate,” “believe,” “can,” “could,” “estimate,” “expect,” “intend,” “is designed to,” “may,” “might,” “plan,” “potential,” “predict,” “objective,” “should,” or the negative of these and similar expressions to identify forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates, and projections. While we believe these expectations, assumptions, estimates, and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks, uncertainties, and other factors, many of which are outside of our control, which could cause our actual results, performance, or achievements to differ materially from any results, performance, or achievements expressed or implied by 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: our ability to continue as a going concern; the potential for delays and increased costs related to construction of our new farms and renovations to existing farms; a failure to raise additional capital to finance our activities on acceptable terms; an inability to produce and sell our products in sufficient volume and at acceptable cost and prices; any inability to protect our intellectual property and other proprietary rights and technologies; the effects of changes in applicable laws, regulations and policies; our ability to secure any necessary regulatory approvals and permits; the degree of market acceptance of our products; our failure to retain and recruit key personnel; the price and volatility of our common stock; our ability to maintain compliance with the listing requirements of, and remain listed on, the Nasdaq Capital Market; and other risks identified in our public filings with the Securities and Exchange Commission (“SEC”), including the section titled “Risk Factors” in this Quarterly Report on Form 10-Q, our most recently filed Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K, as updated by our subsequent filings with the SEC. New risks emerge from time to time, and it is not possible for us to predict all such risks. Given these risks and uncertainties, may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you are cautioned not to place undue reliance on such forward-looking statements.

These forward-looking statements are made only as of the date of this Quarterly Report on Form 10-Q. We do not undertake and specifically decline any obligation to update any such statements or to publicly announce the results of any revisions to any such statements to reflect future events or developments unless required by federal securities law.

Reverse Stock Split

On October 12, 2023, the stockholders of the Company approved a reverse stock split of the Company’s common stock and the Board of Directors approved a split ratio of 1-for-20. The reverse stock split was implemented on October 16, 2023. In conjunction with the reverse stock split, the number of shares of common stock authorized for issuance was reduced from 150 million to 75 million. All share and per share information, as well as other related information on equity instruments in this Quarterly Report on Form 10-Q have been adjusted to reflect this change. As a result of the reverse stock split, $67,511 was reclassified from common stock to additional paid-in capital.

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

 

AquaBounty Technologies, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

September 30,

December 31,

2023

2022

Assets

Current assets:

Cash and cash equivalents

$

16,767,070

$

101,638,557

Inventory

1,942,420

2,276,592

Prepaid expenses and other current assets

3,718,087

2,133,583

Total current assets

22,427,577

106,048,732

Property, plant and equipment, net

168,657,134

106,286,186

Right of use assets, net

204,396

222,856

Intangible assets, net

207,861

218,139

Restricted cash

1,000,000

1,000,000

Other assets

49,367

64,859

Total assets

$

192,546,335

$

213,840,772

Liabilities and stockholders' equity

Current liabilities:

Accounts payable and accrued liabilities

$

9,895,839

$

12,000,592

Accrued employee compensation

727,743

1,021,740

Current debt

756,559

2,387,231

Other current liabilities

4,540

20,830

Total current liabilities

11,384,681

15,430,393

Long-term lease obligations

199,856

203,227

Long-term debt, net

7,772,695

6,286,109

Total liabilities

19,357,232

21,919,729

Commitments and contingencies

 

 

Stockholders' equity:

Common stock, $0.001 par value, 75,000,000 and 150,000,000 shares authorized at

September 30, 2023 and December 31, 2022, respectively; 3,846,772 and 3,834,383

shares outstanding at September 30, 2023 and December 31, 2022, respectively

3,847

3,834

Additional paid-in capital

385,879,364

385,455,961

Accumulated other comprehensive loss

(539,204)

(516,775)

Accumulated deficit

(212,154,904)

(193,021,977)

Total stockholders' equity

173,189,103

191,921,043

Total liabilities and stockholders' equity

$

192,546,335

$

213,840,772

See accompanying notes to these condensed interim consolidated financial statements.

 

AquaBounty Technologies, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2023

2022

2023

2022

Revenues

Product revenues

$

733,133

$

653,432

$

1,919,409

$

2,686,019

Costs and expenses

Product costs

4,096,040

3,518,296

11,446,158

10,044,092

Sales and marketing

191,862

186,393

584,401

783,882

Research and development

184,221

220,598

485,532

596,079

General and administrative

2,334,861

2,264,755

8,402,876

7,472,921

Total costs and expenses

6,806,984

6,190,042

20,918,967

18,896,974

Operating loss

(6,073,851)

(5,536,610)

(18,999,558)

(16,210,955)

Other expense

Interest expense

(63,746)

(72,313)

(195,809)

(222,295)

Other (expense) income, net

(516)

168,796

62,440

345,355

Total other (expense) income

(64,262)

96,483

(133,369)

123,060

Net loss

$

(6,138,113)

$

(5,440,127)

$

(19,132,927)

$

(16,087,895)

Other comprehensive loss:

Foreign currency translation loss

(138,202)

(303,725)

(22,429)

(374,422)

Unrealized gain on marketable securities

32,370

40,101

Total other comprehensive loss

(138,202)

(271,355)

(22,429)

(334,321)

Comprehensive loss

$

(6,276,315)

$

(5,711,482)

$

(19,155,356)

$

(16,422,216)

Basic and diluted net loss per share

$

(1.60)

$

(1.42)

$

(4.98)

$

(4.20)

Weighted average number of Common Shares -

basic and diluted

3,846,622

3,833,430

3,843,349

3,832,328

See accompanying notes to these condensed interim consolidated financial statements.

 

AquaBounty Technologies, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

Common stock issued and outstanding

Par value

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated deficit

Total

Balance at December 31, 2021

3,830,128

$

3,830

$

384,919,303

$

(255,588)

$

(170,864,782)

$

213,802,763

Net loss

(5,111,726)

(5,111,726)

Other comprehensive loss

(31,160)

(31,160)

Share based compensation

4,203

4

211,324

211,328

Balance at March 31, 2022

3,834,331

$

3,834

$

385,130,627

$

(286,748)

$

(175,976,508)

$

208,871,205

Net loss

(5,536,042)

(5,536,042)

Other comprehensive loss

(31,806)

(31,806)

Exercise of options for common stock

52

-

1,538

1,538

Share based compensation

107,280

107,280

Balance at June 30, 2022

3,834,383

$

3,834

$

385,239,445

$

(318,554)

$

(181,512,550)

$

203,412,175

Net loss

(5,440,127)

(5,440,127)

Other comprehensive loss

(271,355)

(271,355)

Share based compensation

107,641

107,641

Balance at September 30, 2022

3,834,383

$

3,834

$

385,347,086

$

(589,909)

$

(186,952,677)

$

197,808,334

Common stock issued and outstanding

Par value

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated deficit

Total

Balance at December 31, 2022

3,834,383

$

3,834

$

385,455,961

$

(516,775)

$

(193,021,977)

$

191,921,043

Net loss

(6,486,068)

(6,486,068)

Other comprehensive income

4,427

4,427

Share based compensation

11,423

12

196,629

196,641

Balance at March 31, 2023

3,845,806

$

3,846

$

385,652,590

$

(512,348)

$

(199,508,045)

$

185,636,043

Net loss

(6,508,746)

(6,508,746)

Other comprehensive income

111,346

111,346

Share based compensation

336

106,184

106,184

Balance at June 30, 2023

3,846,142

$

3,846

$

385,758,774

$

(401,002)

$

(206,016,791)

$

179,344,827

Net loss

(6,138,113)

(6,138,113)

Other comprehensive loss

(138,202)

(138,202)

Share based compensation

630

1

120,590

120,591

Balance at September 30, 2023

3,846,772

$

3,847

$

385,879,364

$

(539,204)

$

(212,154,904)

$

173,189,103

See accompanying notes to these condensed interim consolidated financial statements.


AquaBounty Technologies, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Nine Months Ended

September 30,

2023

2022

Operating activities

Net loss

$

(19,132,927)

$

(16,087,895)