AQUABOUNTY TECHNOLOGIES INC

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10‑K of AquaBounty Technologies, Inc. (“AquaBounty,” the “Company,” “we,” “us” or “our”), particularly the sections titled “Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” contains forward-looking statements. All statements other than present and historical facts and conditions contained in this Annual Report on Form 10‑K, including statements regarding our future results of operations and financial position, business strategy, plans, and our objectives for future operations, are forward-looking statements. When used in this Annual Report on Form 10‑K, 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 identify forward-looking statements. These forward-looking statements include statements that are not historical facts, including statements regarding management’s expectations for future financial and operational performance and operating expenditures, expected growth, and business outlook; the nature of and progress toward our commercialization plan; the future introduction of our products to consumers; the countries in which we may obtain regulatory approval and the progress toward such approvals; the volume of eggs or fish we may be able to produce; the timeline for our production of saleable fish; the expected advantages of land-based systems over sea-cage production; the validity and impact of legal actions; the completion of renovations at our farms; and the establishment of a larger-scale grow-out facility.

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. These risks and uncertainties include, but are not limited to:

our history of net losses and the likelihood of future net losses;

our ability to continue as a going concern;

our ability to raise additional funds, in sufficient amounts on a timely basis, on acceptable terms, or at all;

our ability to raise substantial additional capital on acceptable terms, or at all, which is required to implement our business strategy as planned, or at all;

our ability to attract and retain key personnel, including key management personnel;

our ability to retain and reengage key vendors and engage additional vendors, as needed;

our ability to obtain approvals and permits to construct and operate our farms without delay;

increases in interest rates;

delays and defects that may prevent the commencement of farm operations;

rising inflation rates;

our ability to finance our Ohio farm through the placement of municipal bonds, which may require restrictive debt covenants that could limit our control over the farm’s operation and restrict our ability to utilize any cash that the farm generates;

our ability to manage our growth, which could adversely affect our business;

risks related to potential strategic acquisitions, investments or mergers;

high customer concentration, which exposes us to various risks faced by our major customers;

ethical, legal, and social concerns about genetically engineered products;

our ability to gain consumer acceptance of our genetically engineered Atlantic salmon (“GE Atlantic salmon” or “AquAdvantage salmon”) product;

the quality and quantity of the salmon that we harvest;

a significant fish mortality event in our broodstock or our production facilities;

the loss of our GE Atlantic salmon broodstock;

disease outbreaks, which can increase the cost of production and/or reduce production harvests;

a shutdown, material damage to any of our farms, or lack of availability of power, fuel, oxygen, eggs, water, or other key components needed for our operations;

our ability to efficiently and cost-effectively produce and sell salmon at large commercial scale;

any contamination of our products, which could subject us to product liability claims and product recalls;

security breaches, cyber-attacks and other disruptions could compromise our information, expose us to fraud or liability, or interrupt our operations;

our dependence on third parties for the processing, distribution, and sale of our products;

any write-downs of the value of our inventory;

business, political, or economic disruptions or global health concerns;

adverse developments affecting the financial services industry;

industry volatility, including fluctuations in commodity prices of salmon;

restrictions on Atlantic salmon farming in certain states;

agreements that require us to pay a significant portion of our future revenue to third parties;

our ability to receive additional government research grants and loans;

international business risks, including exchange rate fluctuations;

our ability to use net operating losses and other tax attributes, which may be subject to certain limitations;

our ability to maintain regulatory approvals for our GE Atlantic salmon and our farm sites and obtain new approvals for farm sites and the sale of our products in other markets;

our ability to continue to comply with U.S Food and Drug Administration (“FDA”) regulations and foreign regulations;

significant regulations in the markets in which we intend to sell our products;

significant costs complying with environmental, health, and safety laws and regulations, and any failure to comply with these laws and regulations;

increasing regulation, changes in existing regulations, and review of existing regulatory decisions;

lawsuits by non-governmental organizations and others who are opposed to the development or commercialization of genetically engineered products;

risks related to the use of the term “genetically engineered,” which will need to be included as part of the acceptable market name for our GE Atlantic salmon, and bioengineering disclosures provided in accordance with U.S. Department of Agriculture (“USDA”) regulations;

competitors and potential competitors may develop products and technologies that make ours obsolete or garner greater market share than ours;

any theft, misappropriation, or reverse engineering of our products could result in competing technologies or products;

our ability to protect our proprietary technologies and intellectual property rights;

our ability to enforce our intellectual property rights;

volatility in the price of our shares of common stock;

our ability to maintain our listing on the Nasdaq Stock Market LLC (“Nasdaq”);

our success in growing, or our perceived ability to grow, our GE Atlantic salmon successfully and profitably at commercial scale;

an active trading market for our common stock may not be sustained;

our status as a “smaller reporting company” and a “non-accelerated filer” may cause our shares of common stock to be less attractive to investors;

any issuance of preferred stock with terms that could dilute the voting power or reduce the value of our common stock;

provisions in our corporate documents and Delaware law could have the effect of delaying, deferring, or preventing a change in control of us;

our expectation of not paying cash dividends in the foreseeable future; and

other risks and uncertainties referenced under “Risk Factors” below and in any documents incorporated by reference herein.

We caution you that the foregoing list may not contain all of the risks to which the forward-looking statements made in this Annual Report on Form 10‑K are subject. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements, particularly in the section titled “Risk Factors,” that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments that we may make.

Given these risks and uncertainties, 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 Annual Report on Form 10‑K. 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. New risks emerge from time to time, and it is not possible for us to predict all such risks.

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SUMMARY OF THE MATERIAL RISKS ASSOCIATED WITH OUR BUSINESS

Our business is subject to numerous risks and uncertainties that you should be aware of in evaluating our business, including those described in the “Risk Factors” section in Part I, Item 1A. of this Annual Report on Form 10-K. These risks and uncertainties include, but are not limited to, the following:

We have a history of net losses and will likely incur future losses and may not achieve or maintain profitability.

There is substantial doubt about our ability to continue as a going concern.

Our current business plans include the need for substantial additional capital, and without it, we may not be able to implement our strategy as planned or at all.

There can be no assurance that additional funds will be available on a timely basis, on acceptable terms, or at all, or that such funds, if raised, would be sufficient to enable us to continue to implement our business strategy.

If we lose key personnel, including key management personnel, or are unable to attract and retain additional personnel, it could delay our commercialization plans or harm our research and development efforts, and we may be unable to sell or develop our own products.

If we lose key vendors, including those necessary to complete the construction of our Ohio farm, or are unable to engage additional vendors, it could delay our construction or commercialization plans.

We require approvals and permits to construct and operate our farms, and any delay or denial of those approvals or permits could potentially delay or halt certain operations and commercial efforts.

Increases in interest rates have increased our expected borrowing costs and may also affect our ability to obtain working capital through borrowings, such as bank credit lines and public or private sales of debt securities.

Delays and defects may prevent the commencement of farm operations.

Rising inflation rates could negatively impact our revenues and profitability.

The financing of our Ohio farm through the placement of municipal bonds may require restrictive debt covenants that could limit our control over the farm’s operation and restrict our ability to utilize a portion of any cash that the farm generates.

We may encounter difficulties managing our growth, which could adversely affect our business.

We may pursue strategic acquisitions, investments or mergers that could have an adverse impact on our business if they are unsuccessful.

High customer concentration exposes us to various risks faced by our major customers and may subject us to significant fluctuations or declines in revenues.

Ethical, legal, and social concerns about genetically engineered products could limit or prevent the use of our products and limit our revenues.

We may have limited success in gaining consumer acceptance of our products.

Our business is affected by the quality and quantity of the salmon that we harvest.

We may experience a significant fish mortality event in our broodstock or our production facilities that could impact the price of our common stock.

The loss of our GE Atlantic salmon broodstock could result in the loss of our commercial technology.

Atlantic salmon farming is subject to disease outbreaks, which can increase the cost of production and/or reduce production harvests.

A shutdown, material damage to any of our farms, or lack of availability of power, fuel, oxygen, eggs, water, or other key components needed for our operations, could result in our prematurely harvesting fish, a loss of a material percentage of our fish in production, and a delay in our commercialization plans.

The successful development of our business depends on our ability to efficiently and cost-effectively produce and sell salmon at large commercial scale.

If our products become contaminated, we may be subject to product liability claims and product recalls.

Security breaches, cyber-attacks and other disruptions could compromise our information, expose us to fraud or liability, or interrupt our operations, which would cause our business and reputation to suffer.

We remain dependent on third parties for the processing, distribution, and sale of our products.

We may be required to write-down the value of our inventory if its net realizable value is less than its accumulated cost at the end of a reporting period.

Business, political, or economic disruptions or global health concerns could seriously harm our current or planned business and increase our costs and expenses.

Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our business, financial condition or results of operations.

Industry volatility can affect our earnings, especially due to fluctuations in commodity prices of salmon.

Atlantic salmon farming is restricted in certain states.

We have entered into agreements that require us to pay a significant portion of our future revenue to third parties.

We have received government research grants and loans in the past, but such grants and loans may not be available in the future.

Our financial condition or results of operations may be adversely affected by international business risks, including exchange rate fluctuations.

Our ability to use net operating losses and other tax attributes to offset future taxable income may be subject to certain limitations.

Our ability to generate revenue to support our operations depends on maintaining regulatory approvals, and we or regulatory agencies approving our products may be sued by non-governmental organizations and others.

We are and will be required to continue to comply with certain laws and regulations, including FDA, USDA, environmental, health, and safety and foreign laws and regulations, and regulatory decisions.

We are subject to risks relating to our intellectual property rights.

The price of our shares of common stock is likely to be volatile, and an active trading market for our common stock may not be sustained.

We may not be able to maintain our listing on Nasdaq which could limit investors’ ability or willingness to make transactions in our securities and subject us to additional trading restrictions.

We are a “smaller reporting company” and a “non-accelerated filer” and we cannot be certain if applicable scaled disclosure requirements will make our shares of common stock less attractive to investors.

We may issue preferred stock with terms that could dilute the voting power or reduce the value of our common stock.

Provisions in our corporate documents and Delaware law could have the effect of delaying, deferring, or preventing a change in control of us, even if that change may be considered beneficial by some of our stockholders.

We do not anticipate paying cash dividends in the foreseeable future.

The summary risk factors described above should be read together with the text of the full risk factors below, in the section entitled “Risk Factors”and in the other information set forth in this Annual Report on Form 10-K, including our financial statements and the related notes, as well as in other documents that we file with the U.S. Securities and Exchange Commission, or the SEC.

Where You Can Find More Information

We file with the Securities and Exchange Commission (the “SEC”) periodic reports and other information, including our Annual Report on Form 10‑K, Quarterly Reports on Form 10‑Q, Current Reports on Form 8‑K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The SEC maintains an internet site at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file, as we do, electronically with the SEC.

All of these documents are available free of charge on our website, www.aquabounty.com, and will be provided free of charge to stockholders requesting a copy by writing to: Corporate Secretary, AquaBounty Technologies, Inc., 233 Ayer Road, Suite 4, Harvard, Massachusetts 01451, Telephone: (978) 648-6000. We use our website as a channel for routine distribution of important information, including news releases, analyst presentations, and financial information. In addition, our website allows investors and other interested persons to sign up to automatically receive e-mail alerts when we post news releases and financial information on our website. The information contained on, or accessible from, our website or in any other report or document we file with or furnish to the SEC is intended to be inactive textual references only, and is not incorporated by reference into this Annual Report on Form 10‑K.

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Part I